What Donald Trump's election victory could mean for Canada

CTV National News: Trade deal talks at G20 Prime Minister Trudeau says he is not ruling out making trade deal directly with U.S. at the G20 summit in Brazil. Judy Trinh reports.

Following president-elect Donald Trump’s decisive election victory, there are sure to be significant knock-on effects for Canada.

While this will be Trump’s second go-around in the Oval Office, and the second with Prime Minister Justin Trudeau in office in Canada, the world looks very different than it did four years ago.

Here’s a look at the different areas in which a second Trump presidency may affect Canadians now.

Economy

It’s unclear which election promises Trump will implement once he’s back in office, but his pledge to put in place across-the-board tariffs of at-least 10 per cent has caused some concern among experts.

A report from the Canadian Chamber of Commerce last month “offers a stark warning” of protectionist policies in the United States, and concludes that Trump’s tariffs would negatively impact both countries’ economies.

The issue would become even worse, according to the report, if Canada retaliates with levies of its own.

The report also details negative impacts on several U.S. states and Canadian provinces specifically, in which the other country is its largest trading partner, namely Ontario, Quebec, Alberta, Manitoba, and New Brunswick. South of the border, Montana, Michigan, Illinois, and Texas rely on trade with Canada for significant percentages of the state economy.

Ian Lee, an associate professor at the Sprott School of Business at Carleton University, told CP24 on Wednesday morning: “The outcome is going to be overwhelmingly negative, and I say that analytically and empirically.”

“It is going to reveal itself through the dollar,” he said. “We not only export one-third of our GDP, we import one-third of our GDP. We import huge amounts.”

“When that dollar tanks, as I am predicting it will, that is going to drive up the cost of food we import along with John Deere tractors, computers, et cetera,” he also said.

U.S.-based policy advisor John Dickerman, however, pointed to the trade and energy sectors, specifically, as ones that could present opportunities during Trump’s second term.

“The first thing that popped into my mind is, where are the potential opportunities for alignment between the United States and Canada and a second Trump presidency? And I think that's something that in the business community we're particularly interested in thinking about,” Dickerman said in an interview with CTV News. He’s the vice-president, United States, for the Business Council of Canada.

“(Trade and the energy sector) are areas where friction exists between the United States and Canada, regardless of who's in the White House,” he said. “But a way forward on negotiating opportunities is certainly possible.”

He also cautioned against making assumptions about Trump’s trade, economic, and energy policies before the new administration starts making decisions and announcements.

“I think we need to wait and see exactly what the economic and trade team looks like,” he said. “Will holdovers from the previous Trump administration fill specific roles? I suspect the answer will be yes in some areas and no in others, and that will give us a very keen understanding of exactly what strategy we need to employ going forward.”

“But I think optimism is very important,” he also said.

Trade

With Trump heading into a second term as president, Canada-U.S. trade is likely to be under the microscope. Both countries are the other’s largest trading partner, with province-to-state agreements also contributing significantly to trade and investment.

According to the Canadian Chamber of Commerce report, if Trump introduces the blanket 10-per cent tariff on all imports he’s promised, and Canada responds in kind, Canadian incomes and productivity would both fall.

The resulting trade war, the report continues, could cost about $1,100 in foregone income annually for people on both sides of the border.

Canada’s Industry Minister François-Philippe Champagne — a member of the federal government’s so-called Team Canada initiative — was asked Tuesday about Trump’s tariff plans.

While he didn’t respond to the tariffs question, Champagne had this to say about the change in Canada-U.S. relations since the Liberals took office: “Today, our supply chains are more integrated than ever in key strategic places. You're talking about critical minerals, you're talking semiconductors, and then you talk about a growth agenda for North America.”

Dickerman told CTV News that because Canada has already negotiated trade and tariffs with the previous Trump administration, it “isn’t necessarily in a position of weakness.”

“The real key will be whether or not the private sector and the public sector in Canada can come together and work cooperatively under negotiating opportunity with the Trump administration,” he said.

Early in his first presidency, Trump also triggered what became a high-drama renegotiation of the North American Free Trade Agreement, and now he's vowed to utilize the 2026 review clause stitched into the revised deal, threatening to re-open the agreement for re-negotiation.

That has put sectors with deeply integrated supply chains on alert.

“He's saying to the world on day one, we're going to put a 10 per cent tariff on everything. That runs counter to … our free trade agreement,” said Automotive Parts Manufacturers’ Association president Flavio Volpe. “But I think we need to take them seriously. We need to demonstrate, once again, that half of the cars made in this country are made by American car companies, and half of the parts that come in to assemble two million cars come from American plants, and 60 per cent of the raw material come from American sources.”

“So once again, Canada and the U.S. are so well integrated, it wouldn't be a good move,” Volpe said.

Political relations

To prepare for any eventuality in this election, the Canadian government announced a "Team Canada engagement strategy” last January, “to promote and defend Canada's interests."

That approach is led by Canada’s ambassador to the U.S. Kirsten Hillman, Foreign Affairs Minister Melanie Joly, Champagne, and Trade Minister Mary Ng.

"The friendship between Canada and the U.S. is the envy of the world," Trudeau said in a post on social media Wednesday morning. “I know President Trump and I will work together to create more opportunity, prosperity, and security for both of our nations.”

Canadian politicians were quick to congratulate Trump on his election win on Wednesday, and all have insisted the federal government is prepared for a second Trump term. Trump, meanwhile, has notably levied several criticisms at Canada, Trudeau’s government, and the prime minister specifically, in the past.

Trump has previously taken aim at Trudeau for being "two faced," "weak" and a "far-left lunatic."

The relationship between the two deteriorated after the G7 meeting in Charlevoix, Que., in 2018, “and didn’t recover,” Carleton University political scientist Aaron Ettinger told CTVNews.ca in an email this summer.

Following those meetings, Trudeau said at a press conference that Canada would not be “pushed around” by the U.S. in the face of “insulting” aluminum and steel tariffs. Seemingly in response, Trump turned to social media to write that Trudeau “acted so meek and mild” during the summit.

Freeland tried to assure anxious Canadians on Wednesday, pointing to the Trudeau government’s previous experience navigating a Trump presidency.

"I want to say with utter sincerity and conviction to Canadians that Canada will be absolutely fine," she said.

"We have a strong relationship with the United States. We have a strong relationship with President Trump and his team," Freeland continued. "I have real confidence that Canada is going to come together and face this moment… We've done it before."

Border

While Trump’s first term was marked by the now-infamous construction of a border wall between the U.S. and Mexico, this time around, he’s promised mass deportations of illegal migrants as part of a large-scale immigration crackdown.

Former U.S. ambassador to Canada Kelly Craft — who served from 2017-2019 under Trump during his first term — told CTV’s Question Period host Vassy Kapelos last week that Canada should prepare for many of those who are deported to head north.

“I think you have to understand that day one, Donald Trump is going to shut our southern border down, she said, adding “all of these illegal immigrants, all of the terrorists, all of the drug traffickers, the drug cartels, the human traffickers,” are “going to flee to Canada.”

“Because they know that once Donald Trump comes to office, they're out of here, so they'll be fleeing over the northern border,” she also said.

Immigration Minister Marc Miller said he will continue to ensure Canada has "an immigration system that is disciplined, that is controlled."

If Trump makes good on his immigration promises, Canada could also see a surge of asylum claims, amid potential increased interest among Americans in moving north.

Defence

An area in which Canada has long faced criticism from several allies, not only the United States, is its defence spending.

Canada has long faced pressure from allies to meet the NATO military alliance’s target of spending two per cent of GDP on defence. While about two-thirds of the group’s members will do so this year, Canada doesn’t plan to until 2032.

According to Craft, that date is “not good enough,” and the federal government will have to spend more, and faster, once Trump is back in office.

“I believe that Canada needs to wake up and understand that once you work from within, and you strengthen, you will have no better friend than the United States under a Trump presidency, because we have a proven record,” she said on CTV’s Question Period this week.

“Donald Trump, when he says he expects people to pay their fair share, they will,” Craft added.

Trump, meanwhile, has threatened several times to pull the U.S. out of NATO, and said earlier this year that if he became president once again, the United States would not defend member countries that do not meet the spending target. NATO’s Article 5 outlines the principle of collective defence, and that an attack on one member country is considered an attack on all.

With files from CTV News’ Rachel Aiello, Menna Elnaka, and Daniel Otis