Philippe Lagassé: Time to prepare

As Donald Trump continues his threats, here are the scenarios Canadians must be thinking about - and planning to confront.

By: Philippe Lagassé

Canadians have been resolute in the face of President Donald Trump’s tariff threats and taunts that we should become the 51st state. Prime Minister Justin Trudeau stated that Canada won’t be joining the United States. Former Prime Minister Stephen Harper argued that we should be prepared to accept severe economic consequences rather than lose our sovereignty. There have been numerous calls for Canada to make itself more resilient and less dependent on trade with the United States. While we’re doubtlessly worried, Canadians seem ready to stand up to American coercion.

I say “seem ready” because we aren’t actually living through significant economic pressure or punishment yet. Right now, the economic costs of resisting the Trump administration’s demands (whatever they may be) are largely hypothetical. I fear that if the United States comes after us hard enough, our solidarity may fray and our will to resist may falter.

In this light, we should have a clear idea of what we may need to face. In order to prepare, we have to understand the various ways that Canada could succumb to economic coercion or fail to adapt to a hostile neighbour. Put simply, if we want to be ready for what might be coming, we should be honest with ourselves about what might happen. With that in mind, here are three scenarios that could lead to Canada’s end as we know it.

Divided and Conquered

One of Canada’s greatest weaknesses is regional factionalism. Federal efforts to appease the Quebec nationalists have gradually allowed the province to become a quasi-sovereign unit within the Canadian state. It’s hard to see what else Quebec would get out of secession that it doesn’t already have. More broadly, there is already tension in Canada between the east and west over matters of economic policy, infrastructure and political representation. This has given rise to a nascent secessionist movement in Alberta in recent years.

Moreover, each region and province has historically looked out for its own interests, which is understandable, yet it’s also left us with a weak sense of national interest and feelings of common cause. The current standoff with the United States promises to make things worse.

The tariff threat has exposed longstanding tension between Alberta, the federal government, and other provinces. While Ottawa and most provinces are prepared to respond to an American tariff with retaliatory measures, Alberta has been more cautious. Oil and gas exports to the United States are the lifeblood of the Alberta economy, and imposing an export tax or even embargo on those resources would significantly impact Albertans. Further, the impact of such a move would risk the continent's energy infrastructure in the long term, potentially stranding Alberta's resources in a domestic Canadian market that has been hostile towards infrastructure growth over the past decade.

Exempting oil and gas from Canada’s tariff response, however, would dilute the intended impact of a strong retaliatory measure. If the federal government is serious about making sure the average American sees the impact of Trump’s tariffs, paying more at the pump is one way to do it. The longer the tariff battle drags on, the less patient Alberta will likely become.

The Alberta government could demand that the federal government remove any retaliatory measures that affect its oil and gas exports. Indeed, if it looks like Alberta is suffering more than the rest, the province's still-fringe secession movement could become more mainstream. A prolonged trade war with the United States that leaves Alberta particularly devastated in an attempt to secure retaliation for tariffs on largely central Canadian commodities could lead to a referendum. If most Albertans voted to secede, we can’t assume that the United States would stand idly by as Canadians worked out what to do next.

Canadian law would require Alberta to negotiate its secession from the federation. As we’ve been witnessing south of the border, law runs into difficulty when raw power politics is unleashed. Suppose the United States made it clear that Alberta would be offered statehood following a successful secession referendum. In that case, we can’t ignore the possibility that an Albertan government would issue a unilateral declaration of independence.

At that point, the rest of Canada would be in a tough spot. If the United States recognized Alberta’s independence and offered it support in anticipation of statehood, Canada’s ability to impose negotiations on the Albertan government would be limited. Some things would have to be sorted out, but the talks would be quite different if the United States backed and planned to absorb a newly independent Alberta.

Were Alberta to leave the federation to join the United States, other provinces might consider doing the same. Even if the rest of the country held together, Canada would be deeply wounded, politically, economically, and culturally. It would be the end of the country as we know it.

Vassalized

After the United States-Mexico-Canada (USMCA) trade agreement was signed, Irvin Studin wrote that Canada risked becoming a vassal state. As Studin explained, USMCA “requires Canada to seek permission from the United States in order to pursue advanced economic relations with major countries such as China.” Studin further outlined how Canada’s subservience to the United States in matters of security and intelligence were accelerating our slide toward vassalage. Defined as a country that governs most of its internal affairs but has its foreign and security policy decisions decided by a larger power, a vassal state is not a truly sovereign entity. Studin held that this was already the case in 2020. It’s not hard to see American economic coercion making us submit even further.

When President Trump threatened tariffs on Canada, the federal government was quick to respond with stronger border patrols and a crackdown on fentanyl. Since the president has also criticized Canada’s low defence spending, commentators have called on Ottawa to accelerate our plans to reach the NATO two-per-cent-of-GDP target for military expenditures. The hope here is that Canada can show the president that we are a good ally and shouldn’t be tariffed.

While this approach makes sense in the short-term, it raises obvious questions: How many concessions and policy alignments are we prepared to offer? How far are we willing to go to avoid economic punishment?

The logic behind a conciliatory approach is that President Trump either has a point, notably on defence spending and organized crime, or that he’ll eventually be satisfied if we give him enough wins, regardless of whether his concerns are real or not. But there’s another possibility: that Trump sees each concession as a sign that he can keep demanding more. We don’t need to look very far to see what they might look like.

Ukraine has just agreed to a preliminary deal that may give the United States access to its deposits of rare earth minerals, presumably in exchange for continued military support. Trump has also taken a keen interest in Greenland. We could see him making comparable “offers we can’t refuse” when it comes to our mineral resources, or control of parts of our Arctic.

It's true that Trump will only be president for four years (we hope). While we may have to suffer subjugation during his presidency, we won’t make decisions under duress forever. That may be true. According to several observers, though, we shouldn’t expect the benign American hegemon of old to return once Trump is out of office. Indeed, his presidency will likely leave the United States with stronger adversaries, fewer friends, and increasingly dependent on brute power to get its way. If that comes to pass, the United States may use its economic leverage to get allies and neighbours to do or get what it wants. Were Ottawa to set a consistent pattern of compliance, Washington might get used to dealing with Canada in a transactional way.

As noted above, a vassal state controls its internal affairs, while a larger power decides external matters. Yet it’s not hard to imagine Canada being vassalized in a way that it loses bits and pieces of both its internal and external autonomy. Sovereignty isn’t a binary after all; it’s on a spectrum. A determined and callous United States could use market access to dictate various Canadian decisions and policies. Canada’s constitution would still be in place. Our institutions would look like they’re functioning normally. We would still have elections and political parties.

Below the surface, though, political leaders would recognize that they have options but no real choices. They might huff and puff about resisting American pressure, particularly at election time, but end up capitulating time and time again. Studin noted that Canada was at risk of being vassalized in 2020, at the end of the first Trump term. The second Trump term may complete the process. Canadians could find themselves nominally sovereign and independent, but effectively subject to Washington’s whims. We would retain the forms of national sovereignty while losing the substance on major decisions and policies. If that occurred, it would be the end of Canada as we thought we knew it.

Decline and Exodus

Let’s imagine that we do end up in a prolonged trade war but manage to avoid the two scenarios described above. We stay united as a country, despite the significant toll that tariffs and retaliatory measures take on those regions that are particularly vulnerable to their effects. We decide that we won’t do whatever Washington wants, even if that means reducing our access to American markets or absorbing other forms of punishment. We remain steadfast and resolute.

Assuming the United States doesn’t eventually let up, and we fail to find alternative markets or build resiliency and self-sufficiency, the Canadian economy will weaken. Our standard of living will fall and investment will decline. Our productivity would fall further behind the United States.

There will be less money for social programs, infrastructure improvements, health care, higher education, and other public goods. Canada would look increasingly unattractive to skilled immigrants and talented Canadians. Those skilled immigrants would look elsewhere and many Canadians would do the same. As fewer immigrants choose Canada and more Canadians emigrate, our economic decline would accelerate. Large parts of Canada could end up looking and feeling like those regions of the United States and the United Kingdom that were left behind by globalization. We would experience our own spike in “deaths of despair” and populist backlashes.

It's hard to know when and how Canada would recover in this scenario. It might finally spur us into action or force us to make radical reforms. However we handled this outcome, it seems fair to say that it would also represent the end of Canada as we know it.

The vignettes I’ve presented here are, of course, gross simplifications and hypotheticals. My fellow academics could surely point out various erroneous assumptions and nuances that I’m missing. And there is the possibility that the Trump presidency is an aberration and the United States will course correct in due time.

Still, as a firm believer in planning for the worst and hoping for the best, we would do well to think about how it could all go wrong and how the Canada we know and love could end.

Philippe Lagassé is an associate professor at Carleton University.

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