Ottawa, the provinces and the big stick

Fare thee well, Team Canada, we hardly knew ye.

U.S. President Donald Trump may not have given up on his cherished dream of Canada as the 51st united state. But economic anxiety from tariff angst is turning Canada back into its previous disunited state. We have come to a parting of the ways among premiers. The common good is giving way to common politics. The only flags being waved these days are provincial banners.

Ontario Premier, Doug Ford, wants a tougher public stance against the U.S. Alberta’s Danielle Smith does not. Manitoba’s Wab Kinew wants tariffs on Chinese EVs lifted in exchange for no tariffs on Western canola, even if this hurts Ontario’s auto sector. B.C.’s David Eby is demanding the same federal support on softwood lumber duties that Ontario’s auto workers are getting. And so on.

There’s an explanatory phrase for this: political economy. Canada is not one single economy, but a host of diverse regional economies with concentrated industrial sectors, wealth and jobs. Oil and gas in Alberta and Saskatchewan. Automobiles in Ontario. Steel and aluminum in Quebec and Ontario. Lumber in B.C. Fish and seafood in Atlantic Canada. It is this diversity that made developing a unified climate policy impossible. It is now doing the same on trade policy.

When push comes to shove, premiers always return to their local knitting. After all, it’s what they’re paid for. Having duffed the ill-fitting One Canada robes that propelled them to an uneasy, if still fruitful, contribution in eliminating interprovincial trade barriers a few months back, they are reverting to more comfortable type as provincial chieftains.

All this leaves Prime Minister Mark Carney in a bind. He is all in for One Canada. Carney’s government is trying to fast-track national infrastructure projects through the Building Canada Act (or “one economy bill”) and Major Projects Office. But that pathway runs through and up against provinces and Indigenous rights and interests. His solution: walk softly. “We will not impose a project on a province. We need consensus behind these projects, and we need the participation of Indigenous Peoples,” said the prime minister, in June. He is all in for “jaw-jaw, not war-war” with Trump and premiers.

This is entirely laudable, if not always feasible, in a federation that is highly decentralized with competing constitutional powers and vastly differing economic interests. It has proved a welcome balm so far to soothe the divisions of the final years of the Justin Trudeau government. We are seeing its limits. As tariff negotiations drag on with the Trump administration, mischief making from inside and outside the country is rising.

Inside, we have Alberta’s Smith. She announced her government’s support for a bitumen pipeline to B.C.’s northern coast. Trouble is, no such private sector proposal exists. But it ‘could’ and ‘would’ in her estimation, if the federal government eliminated various environmental laws like a tanker ban. B.C.’s Eby was quick to oppose any such project, saying it threatens community social licence and First Nations’ support for development.

Outside, we have China’s ambassador to Canada. In a TV interview, he allowed that China would drop its tariffs on canola, if Canada would drop its 100 per cent tariffs on Chinese-made EVs. Like moths to a flame, Manitoba’s Kinew and Saskatchewan’s Scott Moe flew into the warm embrace of Beijing’s light. They wasted no time in agreeing to this ‘deal’ despite its lack of details, Ontario’s opposition and with zero consideration of the national security or broader economic implications to Canada. Doing this would likely trigger Trump, who wants our Chinese EV tariffs aligned with theirs. It would risk more retaliatory American tariffs on our auto sector at a time when the federal government is trying to negotiate with the U.S.

China, and America, could not have hoped for a better response in dividing our country and undermining our resolve.

What’s a prime minister to do? Carney, a smart guy, is no doubt mulling the limits to provincial conciliation and a “Why can’t we all just get along?” federalism. He has dialled down his own 51st-state rhetoric, eschewed any retaliatory tariffs or actions by Canada against the U.S. and clamped a seal on talking about the trade talks. This is the discipline you exhibit when you are laser-focused on getting a deal. And when you know the limits of Canada’s power compared to America’s.

By contrast, the federal government has unfettered constitutional authority in international trade matters and enormous residual power vis-à-vis provinces when it comes to Canada’s economic union. In short, it has the stick. Ottawa can legally ignore provinces to negotiate a “new economic and security relationship,” as Carney puts it, under Section 91.2 of the Constitution which gives the federal government exclusive authority over “the regulation of trade and commerce.”

Clear enough.

Also clear is that Ottawa can ignore premiers and approve infrastructure projects within and across provinces. Section 92.10 (c) of the Constitution allows it to approve infrastructure projects that “although wholly situate within the province, are before or after their execution declared by the Parliament of Canada to be for the general advantage of Canada or for the advantage of two or more of the provinces.”

If we are to get through this demanding period, the prime minister may need to exercise the discipline of powers he has at hand. That means bidding his own farewell to Team Canada and recognize that when it comes to building One Canada, diversity is not always our strength.

Walk softly with premiers, dear prime minister, but ready that big stick.

David McLaughlin is a former clerk of the executive council and cabinet secretary in the Manitoba government.