Bailout plan in response to Trump tariffs on the agenda for premiers’ meeting with Trudeau

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Manitoba Premier Wab Kinew says Trump tariff bailout plans for Canadians are part of the discussion that premiers are conducting with Ottawa Wednesday, but he adds that a long-term economic strategy for the country is also necessary given trading relations with the United States appear permanently changed.

Mr. Kinew, speaking to journalists ahead of a meeting Wednesday between Prime Minister Justin Trudeau and premiers, said one of the ideas under consideration is aid for Canadians whose jobs are disrupted or lost if U.S. president-elect Donald Trump imposes steep tariffs on Canada, as he has threatened.

He mentioned a proposal to reintroduce the income supports offered during COVID.

“One of the things we’ve been doing is thinking back to some of the COVID-era supports,” the Manitoba premier said. “But again, it’s going to depend what the American administration brings forward. So I don’t think we should get too far down the hypothetical path until we see what’s going on there, specifically, in terms of public discussion.”

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Ontario Premier Doug Ford, in opening remarks at Wednesday’s meeting, said he was especially interested in discussions about retaliatory tariffs against the United States.

“I am a strong believer in retaliatory tariffs. You can’t let someone hit you over the head with a sledgehammer without hitting them back as hard, in my opinion,” Mr. Ford told premiers, territorial leaders, Prime Minister Justin Trudeau and others in the room for the meeting.

Mr. Trump will be sworn in on Jan. 20 and has threatened 25-per-cent tariffs on all Canadian goods until the country stops illegal migration and drug smuggling at its border with the U.S. He’s also repeatedly referred to Canada as the “51st state,” called Mr. Trudeau its “governor,” and said he would use “economic force” to try to annex Canada, while claiming a trade imbalance with Canada is a subsidy and vowing to renegotiate the Canada-U.S.-Mexico trade deal.

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Media were allowed in for the remarks by Mr. Ford and remarks from Mr. Trudeau.

Mr. Ford, who is the current chair of the Council of the Federation group of premiers and territorial leaders, also said he wants to talk about other options for responding to Mr. Trump’s promise, beyond tariffs.

On Tuesday, Mr. Ford estimated the U.S. president-elect’s tariff plan could cost as many as 500,000 jobs in his province alone.

Canada’s responses could include imposing its own retaliatory tariffs on U.S. products. The federal government is also not ruling out restricting the flow of energy to the south – despite objections from Western premiers and a warning from Alberta’s Danielle Smith that this would cause a national unity crisis.

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In the face of economic aggression from the United States, Mr. Kinew said Canada needs to craft a new blueprint for growth and jobs.

“I don’t think anyone should expect that we’re ever going to return to the status quo of like a NAFTA-era type trade relationship with the United States.”

Saskatchewan Premier Scott Moe, however, said a priority right now is to de-escalate tensions between the United States and Canada.

Mr. Moe said as Canadians discuss retaliation, they need to ensure they don’t trigger a worsening of threats.

“I think we need to be very, very careful that we don’t escalate the whole tariff conversation. We need to de-escalate that conversation on behalf of all North Americans, not just Canadians.”

The Ontario premier also said he was interested in how quickly and effectively economic assistance could be provided to workers affected by the U.S. tariffs.

Mr. Ford said Canada needs to address the United States, without showing its cards.

“We need to enter these negotiations from a position of strength with as much leverage as possible,” he said.

Newfoundland and Labrador Premier Andrew Furey, using a chess analogy, told journalists ahead of the meeting that Canada should hold off on using energy as a tool in the tariff dispute with the United States.

“I see energy as Canada’s queen in this game of chess. We don’t need to expose our queen too early. The opposition needs to know our queen exists, but they don’t need to know what we’re going to do with the queen.”

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A major business group also urged Canada to take “immediate action” to protect Canada’s manufacturing sector from the imminent threat of U.S. tariffs.

Canadian Manufacturers & Exporters recommended a series of emergency support measures to shore up businesses in the face of U.S. tariffs.

These include a “short-term federal cost-coverage mechanism” funded by revenues from counter-tariffs and export taxes, new investment tax credits to encourage companies to proceed with planned investments, corporate tax deferrals, and employment insurance measures to help companies avoid layoffs.

“We recognize that retaliatory tariffs will be necessary to exert pressure on the incoming U.S. administration. However, a full-scale trade war is not an option – Canadian manufacturers, workers, and consumers cannot afford broad-based retaliation that further destabilizes the economy. Retaliatory measures must be strategic, targeted, and enacted in close consultation with industry to minimize collateral damage,” CME president Dennis Darby wrote in the letter.

“The imposition of U.S. tariffs will trigger a significant economic shock. Revenues lost while tariffs are applied are not recovered, so the duration of the disruption is critical. Canada must act decisively to stabilize businesses, protect jobs, and preserve our manufacturing footprint,” he added.

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Mr. Kinew said Canada’s plan “with the United States should not be a return to the status quo.” He said premiers and Ottawa “should be trying to give ourselves space to build our economy to where it needs to be headed into the future.”

He said protectionism in the United States is not going away and neither are similar impulses elsewhere in the world.

“This is a long-term change in economies around the world where people are trying to onshore and friend-shore and bring the capacity to build and make stuff back home, and so what’s our plan as Canadians to do that, to stand up for our jobs, to make your cost of living more affordable? We need a clear strategy.”

In his comments, Mr. Trudeau laid out the agenda for the day, noting that Alberta Premier Danielle Smith and B.C. Premier David Eby were participating remotely.

He noted that Finance Minister Dominic LeBlanc and Foreign Affairs Minister Mélanie Joly and Kirsten Hillman, Canada’s ambassador to the United States, would be in the room for the talks.

With a report by Mark Rendell.