Prime Minister Mark Carney tours a farm near Red Deer, Alta., on Wednesday.Jeff McIntosh/The Canadian Press
Canada has been caving to U.S. President Donald Trump.
That’s not what Ottawa is saying, of course. Canadians are being told that our negotiators are playing hardball – that everything’s on the table. But then we see the results: capitulation on the digital services tax (though it was a silly regulation in the first place, to be sure), the dropping of a collection of retaliatory tariffs, the scrapping of the so-called “Netflix tax,” and free money for the U.S. from tolls from the Gordie Howe bridge. The hardball Canada has been bringing to negotiations is more of a fluffy pom-pom, tickling trade adviser Peter Navarro’s nose.
Canada’s concession on the Gordie Howe bridge was the most egregious of all of Ottawa’s appeasement efforts so far, both because of what Canada gave up, and because of the story Prime Minister Mark Carney tried to sell Canadians. The original deal signed between Canada and Michigan saw Canada shoulder the full cost of building the bridge, which amounted to $6.4-billion, and in exchange Canada would collect all the revenue from tolls until the debt was repaid (estimated to take 50 years). Under the new deal, however, Canada will split revenues with Washington for the first 15 years.
Mr. Carney didn’t admit to the revenue-sharing deal when asked about the new arrangement earlier this month. “We are sharing after Canada is paid back,” he told CTV News while shaking hands at the Calgary Stampede. “We get the revenues. Then the servicing of the costs of the bridge and paying the debt of the bridge, and then what’s left over, there’s a split of that for 15 years.”
Some might call that a lie. Mr. Carney later called it an “imperfect” explanation.
After the text of the deal was made public, the Prime Minister said that his earlier remarks were in reference to the original Michigan deal (though there was nothing about a 15-year split in the original agreement) and then played down the amount the U.S. will now collect through tolls as “less than five per cent in present value of the overall cost of developing the bridge.”
It’s a curious thing that Mr. Carney would lie (or, if you prefer, communicate imperfectly) about the deal when the details were bound to become public eventually. Maybe he was caught off-guard by the question, though this Prime Minister has proven himself quite thoughtful – strategic, even – when it comes to his communications about this and other matters. Perhaps his instinct to protect his image took over in that moment; Mr. Carney became Prime Minister on the strength of a promise to rescue and protect Canada’s economy. Handing over prize money to our economic antagonist does not exactly align with that mandate.
In a fireside chat video published back in April, Mr. Carney promised Canadians that as Prime Minister, he would “never sugarcoat our challenges.” But he has been caught with his hand in a bag of Redpath an awful lot lately. Just this past week, he declared that Canada “is in a stronger position today than when the trade war began.” That might be true if one looks past Canada’s slow growth, stagnant investment, spiking unemployment rates and so on, but otherwise, it is a fantasy. Indeed, his statement serves Mr. Carney’s political interests as Canada’s redeemer, but not much else.
Carney rules out using energy as leverage in U.S. trade talks
At the same time, his remarks offer some insight as to why Ottawa is not taking a harder stance against Mr. Trump; why Mr. Carney has ruled out using energy as leverage; why he’s not slapping massive tariffs on critical minerals or potash; and why he didn’t keep the Gordie Howe bridge closed until Mr. Trump told the Moroun family to stuff it. It may be because, in the short term, those actions would hurt Canada’s economy far worse than they would the U.S.’s, which would critically undermine Mr. Carney’s image as Canada’s economic white knight. Concessions to the U.S. clearly aren’t working, but they may be having something of a mitigating effect on Canada’s economy.
On the other hand, if we shut off energy exports or tax the hell out of potash, Ottawa won’t be able to sell Canadians on the fiction that our economy is thriving. The pain would be too obvious. Mr. Carney can afford to be seen with his elbows down occasionally, but not as the shepherd of an economy in freefall.
But where possible, Ottawa will strive to project both a strong front, and a stable (if sluggish) economy – even if that means “imperfectly” recounting the terms of a new bridge deal. Lies and loose elbows aren’t going to tank Mr. Carney’s reputation. So we should expect the concessions to continue.