Pushing Canada into addressing strategic issues that require extraordinary action

Opinion

Hey there, time traveller!
This article was published 06/02/2025 (218 days ago), so information in it may no longer be current.

The U.S. tariff scare is giving Canadians a taste of the uncertainty and chaos Americans are experiencing in the early days of the second Trump administration.

The overwhelming consensus in Canada is there is nothing good about 25 per cent levies on Canadian exports to the U.S. And the crisis is causing Canadian governments and business to seriously consider addressing issues that have long been seen as drags on the economy — such as interprovincial trade barriers, productivity and export diversification.

On Tuesday, Winnipeg South MP Terry Duguid, minister responsible for Prairies Economic Development Canada (PrairiesCan), and Manitoba Premier Wab Kinew committed $80 million to Arctic Gateway Group to invest in the infrastructure at the Port of Churchill.

That such funding should be freed up now rather than two decades ago — when it would have been just as justified — is a good indication the days of foot-dragging over strategic economic development are over.

On Wednesday morning, Duguid met with about 20 business and community leaders in his departmental offices in Winnipeg to get a reading on how they would handle possible U.S. tariffs and what they think governments should do to help.

Duguid acknowledged the countervailing tariffs Prime Minster Trudeau has previously announced (and also put on hold) will be a double-whammy for some business whose U.S. customers will be forced to pay a 25 per cent tax on goods shipped to the U.S. and a 25 per cent domestic tax on any parts imported from the U.S. to make the product.

Duguid said the government of Canada is considering some form of financial compensation and reiterated Trudeau’s commitment no region or sector will be forced to bear the brunt of trade war impacts.

“We have to think about the long term and diversification of markets, productivity and investing in infrastructure,” Duguid said. “The whole issue of interprovincial trade barriers have to be dealt with. If not now, when?”

There’s been plenty of talk this week about eliminating interprovincial trade barriers that create ridiculous scenarios where Manitoba craft beer brewers are able to sell their product in the U.S., but not two hours down the highway in Kenora, Ont.

The Canadian economy has long trailed other industrialized nations in productivity. It is not something that can be fixed in the short term. And while it is clearly political rhetoric to utter in the middle of a looming trade war, Duguid said about productivity: “We are on that like a laser beam.”

Canada has also been a laggard on the long-standing NATO policy goal of member nations spending two per cent of their respective national GDP on defence.

What better way to do some of that than investing in the North, Duguid said. “Defence spending could really shore up the infrastructure in the North, which has experienced (an investment) deficit for decades.”

No one wants to say the looming, inexplicable American trade war could produce anything good, but even Duguid allowed “In crisis, there is opportunity.”

The Manitoba economy has a lot going for it, but the reality is it is positioned in the middle of the continent, some distance from other population centres.

However, it does have an amazing piece of infrastructure in the form of a railway (albeit not a high-speed one) to the Arctic Ocean, the only such rail link in Canada. It connects to a deep water port — again, the only one in Canada’s vast North.

The Port of Churchill won’t ever be as busy as the Port of Vancouver — at least not for a couple of generations — but with trade diversification discussions now back on the table it is not hard to imagine a northern Canadian port might be able to play some role in those efforts.

Obviously, capital investment will be required. This week’s $80 million announcement is a start.

It’s a shame it takes an existential threat from the nation’s closest and longest-standing ally to make that happen.

martin.cash@freepress.mb.ca