Since as long as Calgarians can remember, Canada has focused almost exclusively on one international trading partner in order to sustain our export economy – the U.S. After all, we’re neighbours that share a similar geography, related values, many common interests, personal connections and an identical language. And while our histories are different, our cultures have a lot in common.
But what’s truly noteworthy is the sheer volume of trade that passes between us. The trade relationship between Canada and the United States is the world’s most comprehensive and supports millions of jobs in each country while the two neighbours are each other’s largest trade partners. Nearly $3.6 billion worth of goods and services per day crossed the border in 2023.
In spite of the size of our U.S. trade relationship and the benefits that flow from it, Canada’s outsized reliance on the U.S. comes with risks. Think back to the softwood lumber disputes, and the difficulties that can flow from such one-sided trade dependence.
Canadian companies pay for their trees on the basis of “stumpage” rates to their provincial governments while the U.S. claims that system is too open to government subsidies. So it regularly launches countervailing trade disputes against Canada, claiming we’re subsidizing our industry in contravention of international trade law.
History shows the claim is eventually found to be baseless. But what’s clear is Canada’s economic durability could be improved if our softwood lumber market were larger and more diverse.
Canola is another example of what can occur when a trade relationship is too large and too uniform. With China’s recent announcement of a probe of Canadian canola imports as a rebuff to Canada’s intention to impose new border taxes on Chinese-made electric vehicles, steel and aluminium, a trade fight between the two countries seems imminent and new tariffs on a key agricultural product could be the next step.
Canada’s energy industry knows only too well how a lack of diverse buyers can cause deep product discounts. Over the last decade, Canada has lost billions of dollars because of a lack of transmission capacity and the resulting discount in the U.S. market on Canadian oil and gas.
These kinds of trade issues can have a huge impact on a country: its workforce, its communities and its programs.
Canada has as many as 15 free trade agreements covering almost 50 countries around the globe. The World Trade Organization and many other international bodies exist to regulate and police nations that are constantly looking for national advantage over others.
But let’s also ensure we expand Canada’s resource industries and diversify Canada’s markets to the healthiest extent possible in order to be ready for the economic advantages that will come our way.
Cody Battershill is a Calgary realtor and founder / spokesperson for CanadaAction.ca, a volunteer-initiated group that supports Canadian energy development and the environmental, social and economic benefits that come with it.
