Over the past few days, the stars of the North American League of Market Freedom took to the playing field to set the stage for the coming Canada versus the United States championship battle. For fans watching from their seats in the economic stadium, however, reasons to cheer for one side or the other were hard to come by.
A Flawed Opening Play
In a game that hit the news last Wednesday, first up was U.S. Commerce Secretary Howard Lutnick, who said the existing Canada-U.S.-Mexico trade pact is a “bad deal” that needs to be replaced. The Trump administration’s main gripe is that Canada exports more stuff to the U.S. than it imports from the U.S., creating a trade imbalance. “They suck,” Lutnick said of Canada, meaning that because Canada exports $30 billion more to the U.S., it is slurping up U.S. wealth at the expense of Americans.
The claim that trade deficits between two countries represent a loss to the deficit nation, in this case the United States, is a blatant economic falsehood that should get Lutnick ejected from the game. An example: In 2025 Canada imported almost three times as much from China ($90 billion) as China imported from Canada ($34 billion), creating a $56-billion trade deficit. But who cares? Look at the benefits to Canada — electronic products, telephones, computers, industrial equipment. And imagine if Canada could import cheaper EVs from China.
So, no score for Lutnick.
Carney’s Countermove
Then came Prime Minister Mark Carney, with a speech/video released Friday. In response to Lutnick, Carney’s main play was to reiterate that Canada must move away from the United States. “Many of our former strengths based on our close ties to America have become our weaknesses, weaknesses that we must correct.”
Ooops. Bad move. Two days later, Canada’s Defence Minister, David McGuinty, jumped into action to offset Carney’s anti-American theme and repeat a warning he first issued last December: Canada has “no choice” but to move “in lockstep” with the United States on defence. On Monday, McGuinty added that when it comes to Canada’s defence relations with the U.S., “we continue to manage that relationship well and work hand in glove together.” In other words, Canada is realigning away from the U.S., but not on defence. And not, obviously, away from space travel since Canada is totally dependent on NASA and always ready to jump aboard U.S. rockets to the moon and beyond. No score.
Investment Summit Announcement
Carney took another shot when he announced the first-ever Canada Investment Summit to take place in Toronto in September. Canada, said the PM, has what the world wants. “We are a superpower in both clean and conventional energy, with vast deposits of critical minerals. We have free trade deals with countries covering 1.5 billion people and are the most tax-competitive country in the G7 for new business investment.” (We await the CBC fact-checking team’s review of Carney’s free-trade deal claims.)
The objective of the investment summit is to “catalyze” $1.5 trillion in total investment in Canada over the next five years. The summit will be co-hosted by the Canada Pension Plan Investment Board (CPPIB) and the Public Sector Pension Investment Board, two government-created bodies that will now be promoting industrial-strategy investing rather than protecting and maximizing returns for pensioners. Executives and officials from around the world are expected to attend. The head of the CPPIB said the objective is “to showcase the country’s strengths, deepen commercial relationships, and catalyze lasting economic value.” Not a terrible idea, but not quite a goal.
