The Risks of Populist Outrage in Trade Disputes
At the risk of being a party-pooper, it must be said that the spectacle of Canadian hockey fans (including Prime Minister Justin Trudeau) booing the U.S. national anthem in Montréal is disappointing. It’s my feeling that these actions are beneath our national character and, more importantly, counterproductive to the trade dispute we find ourselves in. We will need allies among the various U.S. states—will booing or Ontario Premier Doug Ford’s threats to shut off power to various states help us keep them onside?
A true patriot doesn’t fan populist outrage. The patriot works for the good of the country, remembering that schoolyard antics are no replacement for sober diplomacy.
Five Key Economic Challenges and Opportunities for Growth
We need to be honest about a few things. As investors (and citizens), the real opportunities are hidden in the problems themselves. Here are five major issues that we can address to strengthen Canada’s economy and preserve our diplomatic footing. (I used multiple DeepReasoning AIs to approximate the gross domestic product (GDP) gains illustrated here (Perplexity DeepReasoning and OpenAI o1)).
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North Atlantic Trade Organization (NATO) Underspending
- Let’s face it: Canada’s been shirking our 2% commitment for decades, under both Conservative and Liberal governments.
- Opportunity: Raising our defence spend from ~1.3% toward 2% wisely—focusing on drones, surveillance, cybersecurity—can yield a 3–0.5%GDP boost over time. Why? Because such spending, when done domestically, fosters innovation and advanced manufacturing jobs.
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Fentanyl Crisis & Lack of Racketeer Influenced and Corrupt Organizations Act (RICO) Laws
- Canada, sadly, is a production hub for fentanyl—witness the largest fentanyl super-lab in Canada, discovered in Falkland, BC. Over 29,000 Canadians have lost their lives to opioid toxicity (most involving fentanyl) from 2016 to early 2022.
- Our lack of a RICO-equivalent (as seen in the E-Pirate fiasco) makes prosecuting transnational crime networks harder.
- Opportunity: Introducing robust RICO-style legislation and cracking down on money laundering could recapture an estimated 0–1.3%in GDP through reduced healthcare/policing burdens and restored investor confidence in our financial system.
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Supply Management (Dairy & Co.)
- Applying tariffs near 200% for dairy benefits approximately 10% of our farmers, yet keeps consumer costs high and scuttles free trade deals (UK–Canada, expansions of CPTPP, and constant friction with USMCA partners).
- Opportunity: Easing or reforming supply management opens doors to new trade agreements and could add 2–0.4%to GDP via expanded markets for processed foods, restaurants, and reciprocal tariff reductions.
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Infrastructure Gridlock (Bill C-69 & Quebec’s Pipeline Stance)
- The so-called “no more pipelines bill” plus Quebec’s refusal to allow an east-west pipeline blocks our ability to export LNG to allies in Japan and Europe—missing out on massive export revenues and global energy influence.
- Opportunity: If we resolve these legislative logjams, build out LNG terminals, a pipeline to the east, and possibly expand nuclear (e.g., SMRs) we could see 5–1.0%added to GDP in the mid-term from construction jobs alone, plus long-term revenue from energy exports.
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Interprovincial Trade Barriers
- National Bank Economics suggests these barriers equate to roughly a 21% tariff inside our own country.
- Opportunity: Eliminating these archaic barriers could boost GDP by 0–1.5%—and that’s not just theory. It’s the difference between functioning like one single market versus 10 insular provincial ones.
A Path to Stronger Economic Growth
Put these reforms together, and we’re looking at a possible 3% or more boost in total GDP over the next few years—real, bankable gains that investors should keep in mind. This is not about appeasement but about strategic self-interest: we fix our weaknesses, we build a stronger economy, and we avoid needless escalation with our single most important trading partner.
The Ukraine Example: Why Diplomacy Matters
Some might roll their eyes at comparing hockey insults or pipeline spats to the calamity in Ukraine, but the parallel is this: when potentially workable agreements are ignored or sabotaged, conflict deepens—and the resulting casualties are horrific. Less than two months after Russia’s invasion, both sides were close to a truce in Istanbul. Then, western leaders seemingly discouraged Ukraine from negotiating—and the war raged on. Today, estimates are that over 700,000 Russians and up to 500,000 Ukrainians have been killed or wounded.
Of course, a trade war is not an armed conflict. But the moral is the same: you can’t just swagger into a dispute, demonize the other side, and hope outrage alone wins the day. Diplomacy might not be sensational, but it can prevent the kind of far-reaching damage from which it’s hard to recover.
Strengthening Canada-U.S. Relations for Long-Term Prosperity
Like siblings sharing a bedroom, Canada and the U.S. share a landmass—and our destinies, whether we like it or not, are intertwined. Booing anthems and threatening power cuts may feel momentarily satisfying, but it’s a reckless path that puts us closer to an unwinnable trade war. Instead, if we direct our energy toward solving our real issues—NATO underfunding, fentanyl enforcement, supply management reforms, infrastructure expansion, and removing interprovincial barriers—we can strengthen our own economy by multiple percentage points of GDP and reforge genuine alliances with our biggest partner.
As investors, that’s where we should focus: on turning these systemic challenges into lasting opportunities. After all, geopolitics doesn’t care about moral victories or bellicose posturing. It cares about who ends up stronger in the end. Let’s make sure that’s us.
Glen
