Has Canadian Prime Minister Mark Carney Made the Dissolution of Canada a Done Deal?
At the annual shindig in Davos, Canadian Prime Minister Mark
Carney made himself the folk hero of the anti-Trump crowd (that would be
basically everyone). In remarks
billed as receiving a "standing ovation" but which look pretty tepid on
video, Carney proclaimed that Canada was going its own way because the
"American hegemon" could no longer be trusted.
And we are no longer just relying on the strength of our values, but also the value of our strength.
We are building that strength at home.
Since
my government took office, we have cut taxes on incomes, on capital
gains and business investment. We have removed all federal barriers to
interprovincial trade. We are fast tracking a trillion dollars of
investments in energy, AI, critical minerals, new trade corridors and
beyond. We're doubling our defence spending by the end of this decade,
and we're doing so in ways that build our domestic industries.
And
we are rapidly diversifying abroad. We have agreed a comprehensive
strategic partnership with the EU, including joining SAFE, the European
defence procurement arrangements. We have signed 12 other trade and
security deals on four continents in six months. The past few days,
we've concluded new strategic partnerships with China and Qatar. We're
negotiating free trade pacts with India, ASEAN, Thailand, Philippines
and Mercosur.
Shortly before Carney arrived at Davos, he paid a visit to China, the first such visit since 2017, and negotiated an expansive trade deal. So, the speech was more of a validation of actions taken than a forewarning of future events.
Central
to this new partnership is an agreement to collaborate in energy, clean
technology, and climate competitiveness. Canada and China are both
energy superpowers focused on expanding two-way energy cooperation –
reducing emissions and scaling up investments in batteries, solar, wind,
and energy storage. While in Beijing, the Prime Minister met business
leaders in energy and clean technology to identify and accelerate
Chinese investment opportunities in Canada.
To help deliver the
full potential of these partnerships, and build up our domestic
manufacturing sector, Canada will allow up to 49,000 Chinese electric
vehicles (EV) into the Canadian market, with the most-favoured-nation
tariff rate of 6.1%. This amount corresponds to volumes in the year
prior to recent trade frictions on these imports (2023-2024),
representing less than 3% of the Canadian market for new vehicles sold
in Canada. It is expected that within three years, this agreement will
drive considerable new Chinese joint-venture investment in Canada with
trusted partners to protect and create new auto manufacturing careers
for Canadian workers, and ensure a robust build-out of Canada’s EV
supply chain. With this agreement, it is also anticipated that, in five
years, more than 50% of these vehicles will be affordable EVs with an
import price of less than $35,000, creating new lower-cost options for
Canadian consumers.
Agri-food and trade are foundations of the
longstanding relationship between Canada and China – and China continues
to be our second-largest export market. To renew and strengthen that
relationship, Prime Minister Carney and President Xi secured a
preliminary agreement-in-principle with landmark measures to remove
trade barriers and reduce tariffs:
By March 1, 2026, Canada
expects that China will lower tariffs on Canadian canola seed to a
combined rate of approximately 15%. China is a $4 billion canola seed
market for Canadian producers, and this change represents a significant
drop from current combined tariff levels of approximately 85%.
Canada
expects that Canadian canola meal, lobsters, crabs, and peas will not
be subject to relevant anti-discrimination tariffs from March 1, 2026,
until at least the end of this year.
Together, these results
will help unlock nearly $3 billion in export orders for Canadian
workers and businesses as they realise the full potential of the massive
Chinese market of 1.4 billion people.
Finally, to build on this
momentum, Canada has set an ambitious goal to increase exports to China
by 50% by 2030. To achieve this outcome, Prime Minister Carney and
President Xi discussed increasing two-way investment in clean energy and
technology, agri-food, wood products, and other sectors.
President
Donald Trump on Saturday said he would impose a 100 percent tariff on
all Canadian imports coming into the U.S. if Canada follows through on a
trade deal with China.
“If Governor Carney thinks he is going to
make Canada a “Drop Off Port” for China to send goods and products into
the United States, he is sorely mistaken,” Trump wrote in a post on
social media, mockingly calling Prime Minister Mark Carney “Governor,” a
nod to the nickname he had for former Prime Minister Justin Trudeau.
“China
will eat Canada alive, completely devour it, including the destruction
of their businesses, social fabric, and general way of life. If Canada
makes a deal with China, it will immediately be hit with a 100% Tariff
against all Canadian goods and products coming into the U.S.A.”
This
is all true. Chinese-manufactured “green energy” products are
compromised from the beginning. For instance, Chinese-built equipment
for so-called “wind farms” gives China the ability to remotely kill
energy production. It also doesn’t take a genius to see how Chinese
imports to Canada will take advantage of the US-Mexico-Canada trade
agreement, known as USMCA, to dump cheap Chinese crap on the U.S. market
and avoid any tariffs the U.S. government may impose.
We’ve also seen operations by China that seem to indicate it is preparing for an eventual war against the United States; see There's No Hiding It; China's Actions Say It's Planning a Preemptive Attack on the US – RedState.
Allowing China to become Canada's dominant trading partner—it already
buys more oil from Canada than the U.S. buys—would open Canada to
becoming a Chinese colony in the way so many small countries have been
the victim of the Chinese strategy of “elite capture;” see China Seeks to Buy Eight Pacific Island Nations While Joe Biden and His State Department Are Comatose – RedState.
But, as Carney is about to discover, petulance comes with a price. In
addition to President Trump’s threat of 100 percent tariffs on Canadian
goods, Commerce Secretary Howard Lutnick made it clear
that the United States-Mexico-Canada Agreement (USMCA), or at least the
Canadian portion of it, will not survive the renegotiations that are
taking place this summer.
“We should look at it as just political noise coming out
of a prime minister,” Lutnick said of Carney’s recent messaging. “I
don’t think it can be real, because he took out the math of Canada’s
economy and doing business with the United States of America’s $30
trillion economy. There’s no such thing as changing what they have
today.”
Canada has “the second-best deal in the world” with its
access to the US market, Lutnick said, behind only Mexico. The Commerce
chief also indicated that Canada’s tilt toward China could become an
issue in talks over revamping the US-Mexico-Canada trade agreement known
as USMCA.
If Ottawa opts to import Chinese electric vehicles and
other trade-strengthening steps with Beijing, “do you think the
president of the United States is going to say you should keep having
the second-best deal in the world” during USMCA talks, Lutnick
questioned.
He also said that USMCA renegotiation is likely to
happen “towards the end of the summer and the middle of the summer” this
year.
An additional factor will also feature in the calculations.
Carney’s
decision to pull the plug on U.S. relations in favor of a closer trade
alliance with China could be the tipping point that leads to Canada’s
dissolution. Canada faces at least two massive internal conflicts,
leading smart money to bet it can’t survive as a cohesive country.
The first conflict is Quebec separatism.
This movement has faded from view since its high point in the 1990s.
Make no mistake: it is still alive and only needs the right impetus to
return to center stage. Of course, as we saw during the 90s, other
Canadian provinces know that an independent Quebec means Canada is
finished. Canada had a near-death experience in 1995 when the
independence referendum in Quebec failed by 50.6 percent to 49.4
percent.
The second conflict is an overweening federal government that is anti-liberty. Saw that with the Canadian Freedom Convoy
in 2022. The ruthless crackdown on Canadians participating in a
peaceful demonstration has left lasting scars, as much as Ottawa tries
to pretend otherwise.
The slavish worship of “First Nations” is also causing repercussions. The high court in British Columbia essentially invalidated 95 percent of privately held real estate deeds, ruling that ownership rights belonged to “indigenous peoples.”
The flashpoint that could rapidly cascade into a total disintegration of the Canadian nation, such as it is, is playing out in Alberta. There, a century-old separatist movement is on the verge of launching a referendum on Alberta independence.
If
10 percent of Alberta voters sign a petition for a referendum by May 2,
the province will vote on independence in October 2026. The Trump
administration is already raising the issue of Alberta's independence.
US
Treasury Secretary Scott Bessent has weighed in on a separatist
movement in Alberta, saying the western Canadian province is a "natural
partner for the US".
"Alberta has a wealth of natural resources,
but they won't let them build a pipeline to the Pacific," Bessent told
an American right-wing commentator in an interview on Thursday.
"I
think we should let them come down into the US, and Alberta is a
natural partner for the US. They have great resources. The Albertans are
very independent people."
Carney’s deal with China seems likely to force Canadians to choose
between cheap Chinese imports and doubling the price of anything from
America.
While Alberta might be the first in the barrel, you can
bet it won’t be long until provinces without Alberta’s oil exports to
China find life much more expensive and problematic.
Right now, polling
shows that independence from Canada receives at least 29 percent of
Albertans' and 31 percent of Quebecois' support. This, however, is based
on the status quo, which includes a highly advantageous trade
arrangement for Canada with the U.S. If that trade deal goes away, but
remains possible through independence, then I think it is safe to say
that both provinces could vote to head for the exits.
A broken
and atomized Canada has its risks, but they are lower than those of a
Canada with a close relationship to China. An independent Alberta and
Quebec—and if that happens, a lot of other provinces will be close
behind—could become territories in the mode of Puerto Rico and Guam,
where they gain the political, economic, and defense benefits of
affiliation with the U.S. but don’t bring millions of quasi-communists
into our political system.
The irony here is just too rich and
luxurious to ignore. Carney’s push to become the darling of the
Never-Trump international community could end up being the final straw
that leads to the inevitable breakup of Canada.
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