With Trump’s tariffs, it’s time for a more self-reliant Canada
Let’s dust ourselves off and make things by Canadians for Canadians

President Donald Trump and Canadian Prime Minister Justin Trudeau hold a joint press conference on February 13, 2017, in the White House. Photo by Benjamin D. Applebaum/Wikimedia Commons.
Donald Trump says he doesn’t need Canadian oil or anything else Canadian. Let’s face it, Canada has been dumped and is on its own.
By raising tariffs unilaterally, Trump will grossly violate USMCA, the former NAFTA. It’s no use doing deals with Trump, that he will break. Instead, let’s dust ourselves off and make things by Canadians for Canadians. Canada was tossed out of similar arrangements before. We picked ourselves up, became more self-reliant and thrived. Can we do so again?
First, a little history. Canadians know far more American history than their own. It’s time to change that. For most of our four centuries as a settler society, Canada was in the secure but subordinate embrace of more advanced powers. First France, then Britain, and finally the US. After what we thought were unshakeable relations with each, they suddenly dumped us.
Twenty years before Confederation, the colonies that formed Canada were tossed out of a privileged export relationship with Britain. Stunned, colonial economic elites rose in anger against the granting of more self-government to settlers and burned down the colonial parliament building in Montréal in 1849.
But sober heads soon prevailed, and the colonies found a substitute trade partner in the rising US, to export resources to. Thus began a reciprocity treaty (free trade) shortly before the US Civil War. It soon ended though because Britain and Canada had traded with the southern Confederacy during the war.
Tossed out as a resource satellite of Britain and the US, Canada finally found its footing and created a unified, diversified economy. It was the national policy from shortly after Confederation until the Great Depression. That’s when Canada came of age. Could Trump’s threats propel us into a new national policy? Perhaps. But only if Canada ditches the conventional wisdom that exporting is better than supplying ourselves.
Canadian capitalists did not go willingly into Canada’s original national policy. They had to be pushed out of the easy route of exporting resources to Britain and the US, before Canada struck out on its own and shifted to an east-west, national economy. Infant Canadian industries grew behind tariff walls, protected from cheaper imports from more developed countries. Not all imports were blocked by tariffs, but they were high enough to level the playing field for Canadian-made goods.
Before there were income and corporate taxes, tariffs were the federal government’s main source of revenue, much of which Ottawa used to subsidize building the privately owned, Canadian Pacific Railway on an all-Canadian route to the West. The CPR moved settlers and Canadian-made goods west to the Prairies and stopped US annexation of the region, like they had Alaska.
Factories in Ontario and Quebec boomed, while western resources flowed east for export along Canada’s railways. The economy matured impressively and Canada escaped from its colonial “staple trap” of just digging stuff up for export. That’s when Canada became an internationally recognized middle power.
The national policy had downsides that must be corrected in Version 2.0. Western Canadians were unhappy as a resource satellite of Central Canada; Indigenous peoples were stripped of their lands, self-determination and cultures; and big corporations, many of them foreign-controlled, dominated the economy.
What should national policy 2.0 look like?
- Switch from an export obsession to focusing on making things for Canadians by Canadians where it’s most feasible. Provide government support for industries, including affordable housing, sustainable energy, and caring services;
- When COVID-19 hit, Trump banned the export of masks and other critical medical supplies. To reduce vulnerability to Trump’s economic blackmail, produce masks, medical supplies and enough vaccines here at home;
- For things we can’t produce efficiently, shift imports from the US to friendlier countries;
- Start switching exports to third countries;
- Procurement from all levels of government and public institutions like schools, should come from Canadian services and goods;
- Put levies on resources exported to the US to help support industries and workers hit hard by Trump’s tariffs.
Generations of Canadians worked hard to unify and build a country that is distinct and independent from the United States. It’s up to today’s generations to fashion a new national policy to create a prosperous and fairer Canada.
Gordon Laxer is a political economist and professor emeritus at the University of Alberta.
This article originally appeared in the Edmonton Journal.