This turbulent trade environment is a new reality, not a temporary storm

While many continue to nurture hope that the U.S. will eventually give us a good deal, for now, this is unrealistic. Rumours of something to come for steel and aluminum, which would have been good news, would still be far from enough and wouldn’t rebuild our competitiveness. Toronto Region Board of Trade has advocated for a variety of measures to liberate investment in growth, like significant tax and regulatory reform, assistance for businesses to retool, and support to diversify their trade and exports. Beyond that, productivity-enhancing energy, transit, and goods movement infrastructure. We also need strategic and coherent growth plans for impacted sectors. Not to tide them over until a deal is reached, but to root them here in Canada for the long term. This will all be very costly. So, as we await the federal budget and provincial fall economic statements, Canadians should expect that a big turnaround strategy will require bigger deficits in the short term. Frankly, if we don’t have a big deficit, we’re not doing it right. As the head of a business organization, that may sound unorthodox, but such are the times we are living. Importantly, all government spending is not equal. Long overdue investments in the kinds of productive capacity I mentioned are smart spending to create the economic growth flywheel spinning in a way we haven’t seen for decades. Canadians need to understand that, as the world’s ninth-largest economy, we have the fiscal capacity to do this. These upfront costs plant the seeds for the long-term economic growth we will harvest in jobs, growth, and tax revenues for years to come—a key lesson of the government’s response to the financial crisis in 2008. But there’s also a lesson from the social security reforms of the mid-90s: Hard choices to slow growth in government services are needed to create budgetary room. In 2025, we need both strategies at the same time. If we want the private sector to invest here at home, governments need to deliver the enabling conditions. President Trump is already moving at warp speed to reshore as much manufacturing and technology investment as possible. Our automakers, steelmakers, furniture makers, farmers, and their supply chains are already feeling the consequences. That’s why cautious incrementalism, the hallmark of Canadian policymaking, won’t cut it. It’s time to accept that this isn’t a temporary storm to weather. For Canada, this is our time to rebuild our country on our own terms.