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‘Hopes and fears’: The Hub reacts to President Trump’s inauguration and what it means for Canada

Commentary

Donald Trump at a campaign rally at Cherry Capital Airport, Oct. 25, 2024, in Traverse City, Mich. Alex Brandon/AP Photo.

Donald Trump is now officially the 47th president of the United States of America, firmly securing his place in the history books as a two-term American leader.

While it was a day full of speeches that reached into the heavens, others wondered here on Earth what it means if Trump’s threats of imposing 25 percent tariffs on our country turn out to be more bluster than reality.

The Hub has gathered the reactions from some of our expert insiders and insightful contributors to get a better understanding of what the inauguration means for America, Canada, and the world.

Holding our collective Canadian breaths 

By Gary Keller, vice president at StrategyCorp and former chief of staff to John Baird, former foreign affairs minister

Upon arriving in Washington and speaking with a number of Canadians yesterday, there was a lot of trepidation around what might come in Donald Trump’s inaugural address today in the form of tariffs or other taxes.

Frankly, gallows humour was the order of the evening. However, with news reports surfacing this morning that Canada has for the time being avoided immediate tariffs, the mood amongst attendees at the Canadian embassy today has lightened considerably.

A new president, no matter what party or stripe, will always bring challenges and opportunities for us as a northern neighbour. With this president, the threat of economic coercion especially still looms large. But it simply means that Canada will have to be nimble to not just respond​ to Trump, but to be proactive in setting out a strategic approach to protect and advance our economic security.

The challenge of course is with a lame-duck government in Ottawa, what passes for a strategy today may look very different tomorrow, with the strong likelihood of a new government after our next federal election.

The additional reality is with a power and communications vacuum in Ottawa, premiers have had to step into the lurch. It will be interesting to see if premiers, having felt that their influence and activity have helped advance an agenda, are emboldened to do even more on the international stage.

In any case, the reality is that for any prime minister, the old Harold Macmillan adage of “events, dear boy, events” intervening or interfering with a well-laid-out domestic agenda is simply a fact. It’s something that Pierre Poilievre will have to be well-prepared for, should he win the next election.

Not to be overestimated 

David Polansky, a Toronto-based writer and research fellow with the Institute for Peace & Diplomacy

The Trump era (going back to 2016) has been largely characterized by alternating immoderate hopes and fears. Yet both his political supporters and opponents have consistently overestimated the impact of his policies. Meanwhile, many have underestimated him politically. For all of Trump’s ideological appeal, he has largely lacked the attention span to be a true ideologue. Even now his most-discussed proposals (trade war with Canada! Annexing Greenland and/or Panama! etc.) are more an expression of the whims of his distinctive personality rather than a strategic vision—economic or otherwise.

If Trump’s second term is to prove more consequential than his first—a big if—it will rely on several factors, of which two remain outstanding.

First, the need to harness human capital in a way that aligns the executive bureaucracy to his goals. This proved a major obstacle in his first term, and it is doubtful whether high-profile additions like Elon Musk—who is also busy running multiple corporations and beating Diablo—will be able to commit to the difficult business of reducing the size of the federal government.

Second, will be managing the tensions between the tech-optimist and nationalist wings of his major supporters. How that plays out will determine what kind of priority actually gets assigned to cutting immigration.

Meanwhile, a true cohesive Trump foreign policy remains elusive. Perhaps in 2028?

Canada bet on a world that no longer exists. It’s time to adapt

By Spencer Fernando, writer and political commentator

For many decades, our sense of security as Canadians has been built on two big bets:

  • That the United States would always remain a stalwart military and economic partner.
  • That the rules-based international order—rather than ruthless aggression—would remain in place.

We lost both bets.

Whatever our relationship with the United States is going forward—and let’s hope it remains positive given the shared values and history of our two nations—we can no longer assume the leadership of the United States will always see us as a friend.

And with the rules-based international order breaking down at a rapid pace, we can no longer assume that treaties and other pieces of paper will protect us.

We must adapt, and we must adapt quickly. To survive and thrive in this new world will require Canadians to embrace the need for hard power. We need a powerful military, something that will cost us tens of billions more per year. And we need to build more pipelines and diversify our trade relationships to escape our over-reliance on the United States.

A great future is still within our grasp, but we will have to become much more resilient to get there.

Put pen to (trade deal) paper 

Christian Leuprecht, a professor at the Royal Military College and Queen’s University and a senior fellow at the Macdonald Laurier Institute

Canada’s relationship with the United States differs insofar as it is not transactional but marked by a co-dependency of shared continental interests, identity, institutions, and ideas.

Faced with existential threats, time and again Canadian federal governments from different political stripes have successfully renegotiated the binational cross-border relationship with both Republican and Democrat U.S. presidential administrations in the United States.

After the 9/11 attacks in 2001, we negotiated the Smart Border Declaration, which eventually culminated in the Beyond the Border Action Plan in 2011. Meanwhile, in 2018, a renegotiated North American Free Trade Agreement (NAFTA) resulted in an improved Canada United States Mexico (CUSMA) Agreement, demonstrating that constructive negotiations led by a federal Liberal government are possible, even with a President Trump.

In each case, a functional federal government was the sine qua non. But instead of constructively setting up our country for success, in its twilight, the Trudeau administration walked away. Without a mandate to negotiate, the default for federal dysfunction is a tariff war that, in tried, tested, and true fashion, would allow for the Dauphin to play the Père’s anti-American card in the hopes of shoring up the Liberals’ battered electoral fortunes.

That house of cards will come crashing down if the Trump administration escalates its trade war by making good on Gretchen Witmer’s lifetime mission of shutting down Line 5, which supplies about half the oil refined in Ontario and Quebec. Gas stations in the Liberals’ Laurentian heartland running low on fuel would make people come to their senses. The alternative future is a federal government with a strong mandate—to take up Trump’s offer for Canada to negotiate a mutually beneficial economic union with the United States.

Time to transform

Ann Fitz-Gerald, director of the Balsillie School of International Affairs and professor of political science at Wilfrid Laurier University

Canada must redefine its approach to relations with the U.S., prioritizing its own interests and values, while navigating a neighbour focused solely on itself. This requires moving beyond Canada’s historically reactive and bandage-based political culture. Instead, Canada needs to articulate clear, achievable priorities, underpinned by effective strategies—a practice too often missing from its political playbook.

Canada must acknowledge that it was caught napping and foster a nationwide sense of urgency for action. Politicians and citizens alike need to confront the stark realities of our national economic vulnerabilities. Uniting around a bold, 20-year vision is essential—one that outlines the future Canadians want for the country and the tough measures required to secure it.

A central pillar of this vision is the strategic positioning of Canada’s Arctic waters, a critical corridor connecting east and west. With warming temperatures making this region increasingly accessible, robust ocean governance and advanced monitoring technologies will be essential to defending Canada’s sovereignty, supporting NATO allies, and strengthening North American defence. Additionally, as the U.S. pursues energy self-sufficiency, Canada must leverage its reserves of rare and critical minerals—resources less easily accessed domestically in the U.S.—to carve out a competitive edge in the evolving global economy.

Get serious

By Adam Chapnick, professor and deputy director of education at the Canadian Forces College

Donald Trump takes office just the way he likes it, with the world on edge and awaiting his next move.

In this time of uncertainty, Canada finds itself in a less-than-ideal position, with a lame-duck prime minister who has thus far failed to convince at least one premier that a Team Canada approach to the White House’s taunts and threats is the only way to defend the national interest.

That failure reflects a Canadian political culture that remains distressingly unserious. Now is not the time to play politics with our collective future, nor is it the time to freelance; there is too much at stake.

History and geography have produced a Canada-U.S. relationship of vastly unequal co-dependence. Each state relies on the other to maximize its security and prosperity, even if Ottawa relies on Washington infinitely more.

Regrettably, it appears that the citizens of both countries might have to suffer dearly to prove it so.

If deregulation happens, Canada should take notes

By Vincent Geloso, assistant professor of economics at George Mason University and senior economist at the Montreal Economic Institute. 

Economists dislike tariffs. But there are policies they dislike even more. This is why I often ask fellow economists, “For a 20 percent tariff, what policy would you demand as compensation?” This identifies policies that outweigh the huge downsides of tariffs. Most often, the answer involves reducing regulatory burdens—on businesses, housing, research and development, or occupations.

There is strong evidence suggesting that growing regulatory requirements, rather than government spending or taxes, are the main culprit behind growth slowdowns in advanced economies. For instance, a widely cited study in the Journal of Economic Growth argues that if federal regulations had stayed at 1949 levels, the average American would now be more than twice as wealthy.

In his first term, President Trump was a deregulator. This term, he’s pledged to do it again, but harder and faster. Given his refusal to reform fiscally unsustainable programs (Medicare, Medicaid, and Social Security), and his promise to boost defence spending and not increase the deficit, the only solution is to now boost economic growth. Faster growth through deregulation—what some call the “4 percent solution”—could raise living standards and alleviate unsustainable welfare pressures. If he succeeds, we should take notes and copy.

Put our military money where our mouth is

Xavier Delgado, Senior Program Associate, Canada Institute at the Wilson Centre

Throughout his first presidency, Trump lambasted NATO partners for failing to meet the 2 percent of GDP guideline agreed upon at the Wales Summit in 2014 and openly toyed with the idea of pulling the United States out of the transatlantic alliance. At the time, Canada could hide behind the fact that most NATO countries also spent less than what they had pledged and argue that its nonmonetary contributions to global security merited at least some credit.

But the world has changed over the past four years. Russia’s invasion of Ukraine has given European leaders cover to significantly increase defence spending. Most NATO partners now either met the 2 percent guideline or have a plan to do so before the end of the decade. Meanwhile, the median defence expenditure as a share of GDP across the organization is 2.11 percent.

At less than 1.5 percent with little evidence that it will reach even its goal of 1.76 percent by 2029-30, Canada sticks out like a sore thumb. Beyond the obligation to protect Canadians in an increasingly dangerous world, Ottawa now has the added incentive of a White House that is already skeptical of the United States’ broader relationship with Canada.

For the security of its citizens and the stability of Canada-U.S. relations under the new Trump administration, it’s time for Canada to make a proper attempt at meeting its defence commitments.

The Hub Staff

The Hub’s mission is to create and curate news, analysis, and insights about a dynamic and better future for Canada in a single online information source.

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