Prime Minister Justin Trudeau is instructing his top economic ministers to take tough positions on trade issues amid growing disputes with the U.S. potentially signaling a more protectionist approach from Canada.
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The Marching Orders were contained in mandate letters to cabinet ministers released Thursday afternoon, nearly three months after Trudeau was re-elected to a third term in September.
The letters to Canada's finance, trade and procurement ministers all included language that could be seen as a veiled threat to counter Buy American policies put forward by President Joe Biden s administration - a major change of tone from a prime minister who has been a strong proponent of open trade.
Finance Minister Chrystia Freeland sets out a reciprocal procurement policy that will ensure that goods and services are procured from countries that give Canadian businesses a similar level of market access. Trade Minister Mary Ng s mandate letter calls for her to engage the United States to address bilateral trade issues and protectionist measures. Procurement Minister Filomena Tassi was told to continue the modernization of procurement practices to support Canada's economic policy goals, including balanced procurement opportunities with Canada's trading partners. Over the past few weeks, Canada and the U.S. have clashed over Biden's push to give additional tax rebates for electric vehicles built by unionized American workers and proposed Canadian legislation to levy a new tax on U.S. based digital giants. Increased U.S. duties on softwood lumber and a halt to shipments of potatoes from Atlantic Canada are also causing friction.
Beyond Canada's primary trading relationship, Ng's letter and that of Foreign Minister Melanie Joly include instructions to deepen ties with the Indo-Pacific region. China is the country's second largest commercial partner, neither mentions it.
Trevor Kennedy, trade policy lead at the Business Council of Canada, said it was clear who Trudeau is targeting with the reciprocal trade policy language.
He said in a phone interview that the United States was the only country where this is. He said that he just wonders what exactly that would look like, noting that Canada is subject to many bilateral and multilateral agreements governing its procurement practices.
Kennedy is concerned about the heated trade rhetoric between Canada and the U.S. on a number of issues, and said it is in part due to the U.S. administration and Congress that is currently quite inward looking. He said it was a regrettable situation. There is a lot of this linked to Congress, the complicated politics in the United States and the difficulty of raising Canada's profile. Freeland s mandate letter repeated the Trudeau government's promise to implement a contentious digital services tax if a global agreement on tax reform isn't enacted by 2024. Legislation setting the stage for that drew a rebuke from the Office of the U.S. Trade Representative on Wednesday.
The finance minister's letter included a long list of other tasks, including the adoption of a global minimum standard on carbon pricing, and the possibility of applying Border Carbon Adjustments to emissions-intensive imports, such as steel, cement and aluminum. None of Tesla takes Customers to Court to Silence Its Critics in China.
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