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Alicia Planincic: There would be no winners in a Canada-China trade war

Commentary

Canadian Prime Minister Justin Trudeau and Chinese President Xi Jinping listen to opening remarks at the G20 Summit in Osaka, Japan, June 28, 2019. Adrian Wyld/The Canadian Press.

In each EconMinute, Business Council of Alberta economist Alicia Planincic seeks to better understand the economic issues that matter to Canadians: from business competitiveness to housing affordability to living standards and our country’s lack of productivity growth. She strives to answer burning questions, tackle misconceptions, and uncover what’s really going on in the Canadian economy.

Free trade leads to a lot of good things: from lower prices and more selection for consumers to higher incomes for Canadians. In fact, it’s estimated that incomes are 15 percent to 40 percent higher as a result.

But recent policy developments seem to suggest free trade is out of style.

In case you missed it, the Canadian government recently announced new tariffs on imports of certain Chinese-made products, including a 100 percent tariff on electric vehicles as well as a 25 percent tariff on steel and aluminum.

The rationale that it’s viewed as necessary to protect a small but growing EV industry in North America. But there’s also added pressure from the U.S. and EU, that have already imposed similar tariffs domestically, on the grounds that unfair practices are propping up production in China.

Almost immediately, China clapped back with an investigation into canola imports from Canada. So far, no barriers have been put up. But it has nonetheless put Canadian farmers on high alert with the prospect of a classic tit-for-tat trade war.

This would be costly.

The exact cost to Canadian producers will depend on the size of the tariff (or other trade barriers of choice) and how much it deters consumers. For example, would some Chinese customers continue to buy from Canadian farmers despite higher prices?

Nonetheless, the sheer size of the industry suggests the hit to Canada’s economy would be meaningful. Canola is one of Canada’s biggest exports to China, amounting to approximately $4 billion dollars annually or around 13 percent of exports to the country. In fact, in terms of the value exported between the two countries, the canola industry is more important to Canada than EV sales are to China. The Chinese did not select this commodity at random.

But there could be other cost implications as well. One is the regional impact. As some have pointed out, while the benefits to the EV sector will be concentrated in Ontario, the costs of a potential barrier on canola would be concentrated in the Prairies.

Another is the cost to consumers. Tariffs on China help Canadian producers but hurt Canadian consumers. Some of the most affordable EVs in the world are produced in China. Without them, consumers would be left with fewer options and higher prices for EVs. This is especially important given that all new cars sold in Canada are expected to be zero-emission by 2035.

Whether a decision to restrict trade is the right move likely comes down to politics over economics. Nonetheless, rising tensions and the recent chain of events show decisions to restrict trade—however well-reasoned—rarely come without consequences. These decisions should not be taken lightly.

A version of this post was originally published by the Business Council of Alberta at businesscouncilab.com

Alicia Planincic

Alicia Planincic is the Director of Policy & Economics at the Business Council of Alberta. She regularly provides insight and analysis on the Canadian economy, public finances, labour markets, equity and social mobility, and public policy.

Linda Frum: Stephen Harper was a great friend to Jews. We could use more leaders like him in these troubling days

Commentary

Prime Minister Stephen Harper makes a speech in front of the Canadian Jewish Congress in Toronto, May 31, 2009. Jim Ross/The Canadian Press.

B’Nai Brith, a human rights organization dedicated to advocacy for the Jewish people, recently hosted a tribute in Montreal for former prime minister Stephen Harper to recognize his stalwart leadership and work in combatting antisemitism, both during his time in office and afterwards. Linda Frum, a Conservative member of the Senate from 2009 until 2021, delivered the following remarks during the event. 

Good evening and thank you for inviting me here tonight to be part of this important fundraiser for B’nai Brith’s legal defence fund, and for allowing me the great honour of paying tribute to tonight’s honouree, Canada’s 22nd (and greatest living) prime minister: Stephen J. Harper.

Prime Minister Harper, over your term in office, there were so many triumphs and successes. Yet there was one day which for me will be remembered as a day of tears: and that was the day, shortly after the election in October of 2015 when you telephoned me, as a member of your caucus, to say a personal goodbye. You were leaving politics after 19 years in elected office, and nine years as our prime minister.

That phone call took place almost exactly nine years ago. Nine years is a short time in the life of a nation, even a nation as young as Canada. It’s a very short time in the existence of a people as ancient as the Jewish people. Yet in those nine years, how much has changed.

Every day, in the Canada that we know now, comes some new act of intimidation or violence designed to send a message to Canada’s Jews that we are no longer welcome or safe here. Bomb threats against synagogues and community centres. Bullets fired at schools. Vandalism of storefronts. Mobs blockading coffee shops. Beatings of children on playing fields. [Antisemitic] encampments permitted to exist on campus. Deputy mayors of great cities speaking alongside the flags of prohibited terrorist organizations.

The further and wider antisemitism spreads in Canada, the more nervously our leaders retreat before it. Sometimes it seems we are losing even the language to describe what is happening. Jews are uniquely targeted—but we can never be specifically mentioned. There is always an asterisk after each outrage, an “and” or a “but.”

Our leaders cannot condemn antisemitism and only antisemitism. It has to be antisemitism plus something else. When a rock breaks a window, they ponder long and hard whether the rock is unacceptably antisemitic or acceptably anti-Zionist. Afraid to speak clearly, authorities are unable to act effectively.

And so we see:

  • Senior leaders of the Iranian regime settle in Canada with their pillaged wealth;
  • ISIS terrorists granted Canadian citizenship;
  • A person with a lengthy published record of Jew-hatred is appointed to enforce our human rights code while another prolific Jew-hater is given lavish government sums to teach anti-racism to journalists.

Yes, mistakes will happen in any large organization, we all understand that. But the same mistake? Again and again and again? With seemingly no accountability, no consequences, and no plan to prevent yet another repeat?

During your tenure, Prime Minister Harper, Canada’s Jews knew there was a courageous and moral leader at the helm. We knew we had a friend. What we failed to appreciate, however, was how quickly—and how dangerously—things would change after your time in office.

I applaud the organizers of tonight’s fundraiser for their efforts in ensuring our community has the legal resources it needs to protect those targeted by discrimination, harassment, and violence. We still feel trust in the Canadian justice system to uphold the safety and dignity of our community.

But justice is not self-executing.

When an individual police officer decides it’s more prudent to stay out of the way of the mobs chanting threats against Jews; when a university president allows antisemites to seize public property and use it as their own; when our country’s representatives at the United Nations cannot distinguish between those who launch a war of terrorist atrocity and those who are defending against terrorist atrocity—the courts cannot intervene to correct them all. That’s not their job.

Canada needs more leaders who are unafraid to defend our country’s most fundamental values and our highest aspirations. Leaders who speak the same truth to all audiences.

Who can speak out against wrongs against any and all Canadians? And without a private reservation that Jews belong to some different and inferior category whose victimization can be explained by the actions of the victims themselves?

Thankfully such leaders do exist. Perhaps there are not as many as we would like, but there are fearless and outspoken individuals in our society who take their mission to guard our community very seriously. These men and women deserve our praise and recognition. Indeed, I see many of you in this room tonight. And to you I say: bravo and thank you.

But as grateful as we are to such stalwart leaders, there is one Canadian leader who stands out above all the rest. The most eloquent, robust and indefatigable of them all. And it is him whom we salute tonight.

In 2014, I was a member of the delegation that accompanied Stephen and Laureen Harper to Israel to receive the accolades that were their due.

The impetus for the visit was the ribbon cutting for the grand opening of the JNF project built in tribute to Prime Minister Harper. I am referring, as you may know, to the Stephen J. Harper Visitor’s Centre at the Hula Valley Bird Sanctuary.

As you may also know, the Hula Valley is located between the Golan Heights, the Naftali Mountains, and the Bekaa Valley, places very much in the news today. The Hula Nature Reserve is a wetland ecosystem that has been extensively restored and preserved by the JNF. It is a vital stopover point for millions of migrating birds during their seasonal journeys between Europe and Africa.

The sanctuary symbolizes the Middle East that could be: a peaceful crossroads of faiths, cultures, and peoples. It also, sadly, reminds us of the Middle East that is.

When you enter the Stephen J. Harper Visitor’s Centre in the Hula Valley Sanctuary, you are only 20 kilometres away from the Lebanon border. You are 40 kilometres away from Majdal Shams, where 12 Israeli Druze children were recently blown to bits by Hezbollah. You are 17 kilometres away from Kiryat Shmona, one of the many northern Israeli towns evacuated after October 7, which remains a ghost town up to this moment. Its inhabitants are among the 100,000 internally displaced people of Israel’s north.

During that visit to Israel in 2014, Prime Minister Harper addressed the Knesset. I quote from his memorable speech: “Canada supports Israel because it is right to do so. This is a very Canadian trait, to do something for no reason other than it is right, even when no immediate reward for, or threat to, ourselves is evident.”

Prime Minister Harper, there is your political philosophy in your own words. Do what is right, without regard to rewards or threats.

This philosophy is why you are so admired and respected. It is why you are missed by Canadians from coast to coast to coast. It is why Canadian Jewry venerates you. It is why we gather in your name tonight. It is why I cried when you left. And it is why you will always be recognized and cherished by us all as a noble, honourable, and eternal friend.

Linda Frum

Linda Frum served as a Conservative member of the Senate from 2009 to 2021.

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