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Adrian Wyld \/ The Canadian Press files<\/p>\n
Prime Minister Mark Carney has a difficult balancing act ahead, as provinces and premiers go their own ways.<\/p>\n
There\u2019s 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.<\/p>\n
When push comes to shove, premiers always return to their local knitting. After all, it\u2019s what they\u2019re 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.<\/p>\n
All this leaves Prime Minister Mark Carney in a bind. He is all in for One Canada. Carney\u2019s government is trying to fast-track national infrastructure projects through the Building Canada Act (or \u201cone economy bill\u201d) and Major Projects Office. But that pathway runs through and up against provinces and Indigenous rights and interests. His solution: walk softly. \u201cWe will not impose a project on a province. We need consensus behind these projects, and we need the participation of Indigenous Peoples,\u201d said the prime minister, in June. He is all in for \u201cjaw-jaw, not war-war\u201d with Trump and premiers.<\/p>\n
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.<\/p>\n
Inside, we have Alberta\u2019s Smith. She announced her government\u2019s support for a bitumen pipeline to B.C.\u2019s northern coast. Trouble is, no such private sector proposal exists. But it \u2018could\u2019 and \u2018would\u2019 in her estimation, if the federal government eliminated various environmental laws like a tanker ban. B.C.\u2019s Eby was quick to oppose any such project, saying it threatens community social licence and First Nations\u2019 support for development.<\/p>\n
Outside, we have China\u2019s 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\u2019s Kinew and Saskatchewan\u2019s Scott Moe flew into the warm embrace of Beijing\u2019s light. They wasted no time in agreeing to this \u2018deal\u2019 despite its lack of details, Ontario\u2019s 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.<\/p>\n
China, and America, could not have hoped for a better response in dividing our country and undermining our resolve.<\/p>\n
What\u2019s a prime minister to do? Carney, a smart guy, is no doubt mulling the limits to provincial conciliation and a \u201cWhy can\u2019t we all just get along?\u201d 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\u2019s power compared to America\u2019s.<\/p>\n
By contrast, the federal government has unfettered constitutional authority in international trade matters and enormous residual power vis-\u00e0-vis provinces when it comes to Canada\u2019s economic union. In short, it has the stick. Ottawa can legally ignore provinces to negotiate a \u201cnew economic and security relationship,\u201d as Carney puts it, under Section 91.2 of the Constitution which gives the federal government exclusive authority over \u201cthe regulation of trade and commerce.\u201d<\/p>\n
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