Canadian Legislative Issues

The relationship between the administration in Washington D.C. and Ottawa continues to take shape every week, as new officials meet and policies on both sides of the border are further developed. On March 2, Canadian Transport Minister Marc Garneau met with United States Transportation Secretary Elaine Chao to discuss issues of mutual interest. Discussion included transport corridors between both countries, which the Canadian government has dedicated $10.1 billion in investments toward over the coming years. The details around how these funds will be spent will be detailed in the budget on March 22, but it is expected that it will be in response to what is happening politically in the United States.

While various meetings between high-ranking officials in both governments have been beneficial -- including the first meeting between Prime Minister Trudeau and President Trump -- this has not prevented the administrations from experiencing early points of disagreement. On March 15, President Trump announced a rollback of stringent fuel economy standards for cars and trucks that were put in place by the Obama administration. This will be difficult for the Liberal government to respond to as a reduction would force Trudeau to choose between keeping Canada’s own standard consistent with America’s or taking an environmental stand that would separate him from Trump. If he decides the latter, this would be one of the first times that the standards aren’t harmonized across the border.

In response to rumors around this subject almost a month ago, General Motors Canada and Ford Motor Canada stated that if Canada decides to not follow Trump’s lead, it could hurt the domestic auto industry. Since many vehicles manufactured near the border cross it multiple times before completion, the automakers warned that, without harmonization, costs could rise. Furthermore, the industry is concerned with expected North American Free Trade Agreement (NAFTA) negotiations looming on the horizon. Even if trade between Canada and the U.S. remains the same, any changes between the U.S. and Mexico could have an outsized effect on the entire auto industry across all three countries. 

The Liberal government will continuously have to make hard decisions, balancing its own vision and priorities on trade and the environment, while acknowledging the ideological differences of its largest trading partner.