Don Campbell, who is an Advisor at DLAPiper, a global law firm, and a former Deputy Minister of Trade, and Kevin Lynch, who is Vice Chair, BMO Financial Group, and a former Clerk of the Privy Council, have written a must read prescription for Canada’s government in the Globe and Mail.
They focus on dealing with the uncertainties that surround the ongoing NAFTA negotiations and they understand, I think, that even if President Trump leaves the scene America First will remain in vogue.
They offer a five point policy, and I agree with each and every one, which aims to “meaningfully rebalance the uncertainty overhang in business and investors’ minds about making long term commitments in Canada.” I would call it a productivity agenda for the Government of Canada:
- “First,” they say, Canada must “launch a competitiveness strategy that encourages long-term investment in the Canadian economy by, for example, matching the U.S. tax-reform measure of immediate full expensing of long-lived business capital investments, reducing regulatory inefficiencies and red tape, doubling down on recent talent and technology initiatives, eliminating parochial interprovincial barriers to trade, and demonstrating that we can and will build pipelines and other export infrastructure. Reaffirming Canada’s competitiveness to investors will go a meaningful way to offsetting the uncertainty created by U.S. trade tactics;”
- “Second,” Messers Campbell (no relation) and Lynch say, Canada must “build new alliances with like-minded countries such as France, Germany, Japan, Britain and Australia to react to U.S. tariff threats as a block, and to resist as a group U.S. pressures to negotiate bilateral trade agreements where might trumps right. The Group of Seven meeting demonstrated that allies have more to fear from U.S. trade policy than do rivals such as China and Russia, and collective size and market power matter;”
- “Third,” and this is a drum I have been beating for months now, “diversify Canadian trade on an urgent basis, both investing heavily in trade development and promotion capacity for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Comprehensive Economic and Trade Agreement (CETA), and beginning trade talks with new markets such as China. Having all our trade eggs in one basket is not prudent risk management and not good trade policy;”
- “Fourth,” they add, “continue to respond to U.S. tariffs with corresponding measures, as the government has appropriately done to date, and redirect any revenue from these tariffs to Canadian firms that are most affected by U.S. actions. Since the United States is imposing its tariffs under the totally inappropriate national security clause (Section 232), it provides greater leeway for precision responses by other countries as Canada had done in the past with softwood lumber;” and
- “Fifth,” and finally, “expand the government’s outreach activities to global businesses to counter this uncertainty with a communications approach that emphasizes the longer term and our natural-resource potential and commitment to the environment, our social cohesion and values, our immigration approach to attracting global talent, our strong fiscal fundamentals and growth potential, and our support of a multilateral trading system and global institutions. Long-term investors want to invest in stable, competitive, sustainable growth markets.“
With regard to the second bullet, I read, between the lines, that Messers Campbell and Lynch want Canada to reassert itself in the West and that might mean rebuilding Canada’s top-heavy, rusty Armed Forces. Overall this prescription is not, fundamentally, inconsistent with the Liberal Party‘s progressive, green, feminist, etc agenda; it aims, in fact, to complement it but I suspect that the Laurentian Elites will be horrified at its clearly pro-business and pro-energy focus, and some Conservatives will be, for ideological reasons, worried about expanding trade with China. If their programme annoys both ideological camps then I suspect it is just about right on target.