An American flag and a campaign flag for U.S. President Donald Trump flutter from a private residence between the Canada and U.S. border in Mooers Forks, New York on Feb. 4.Brian Snyder/Reuters
Finance Minister Dominic LeBlanc is asking his cabinet colleagues for proposals to deal with U.S. protectionism as part of a 2025 federal budget, even though a possible federal election campaign could prevent him from tabling the document.
In an undated letter marked confidential and obtained by The Globe and Mail, Mr. LeBlanc asked ministers to submit no more than three priority funding recommendations by Feb. 2. The letter says the requests must fall under three priority areas: making life more affordable for Canadians, responding to the current Canada-U.S. context and “unlocking our greater competitiveness, productivity, growth and economic security.”
The deadline, now passed, indicates the letter was circulated last month before the high stakes brinksmanship of recent days, in which U.S. President Donald Trump’s plan to impose 25-per-cent tariffs on Canadian imports and 10 per cent levies on oil as of Tuesday loomed over Canada.
The tariff plan was suspended for 30 days on Monday afternoon after two phone calls between Mr. Trump and Prime Minister Justin Trudeau. Following the calls, Mr. Trudeau said Canada agreed to several measures aimed at tackling drugs and drug-related crime. (According to U.S. government figures, border guards intercepted 19.5 kilograms of fentanyl along the Canadian border last year, which is 0.2 per cent of the nearly 11 tonnes intercepted in the U.S.)
Mr. LeBlanc’s letter indicates the government is preparing options for “temporary support” in the event that trade disruptions materialize.
“I am writing to provide an update on Budget 2025 and ask for your proposals to respond to U.S. protectionism,” the letter states. “As discussed at our Cabinet retreat, we are at a crucial moment for our government and for our country. Together with provinces, territories, and business leaders, Team Canada must stand ready to respond to the threat of unprecedented tariffs from the new U.S. administration and mitigate their impacts on the Canadian economy.”
Mr. LeBlanc, a former public safety minister, became Finance Minister in December after former finance minister and deputy prime minister Chrystia Freeland abruptly resigned from cabinet the morning she was scheduled to release the government’s fall economic update.
The government tabled the update without her, but there was no government news conference or related speech in the House of Commons that day.
In her resignation letter to Mr. Trudeau, which she made public, Ms. Freeland said that she and the Prime Minister had been at odds about the best path forward for Canada.
Ms. Freeland’s letter mentioned Mr. Trump’s threat of imposing 25-per-cent tariffs on Canada.
“We need to take that threat extremely seriously. That means keeping our powder dry today, so we have the reserves we may need for a coming tariff war. That means eschewing costly political gimmicks, which we can ill afford and which make Canadians doubt that we recognize the gravity of the moment,” she wrote in the Dec. 16 letter.
Ms. Freeland remained as a Liberal MP and is currently a candidate in the leadership race to replace Mr. Trudeau, who prorogued Parliament until March 24 to allow the Liberal Party to select his replacement.
The results of the leadership race will be announced on March 9.
It is possible the House will not sit again as planned. The new Liberal leader could opt to trigger a federal election before the House is scheduled to resume sitting. The three main opposition parties have vowed to defeat the government at the earliest opportunity should sittings resume.
In Mr. LeBlanc’s letter, he urged his colleagues to keep federal spending pressures in mind.
“In the current fiscal climate, it is more important than ever to focus on no-cost approaches that can make an impact such as cutting red tape, removing barriers to internal trade and investment, and streamlining government processes. These measures have no fiscal impact and will help our economy grow, and will not count towards the three-proposal limit.”