This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, May 2, 2025
Prime Minister Mark Carney deserves congratulations on the successful election of a strong minority government. Unfortunately, post-election euphoria now gives way to the gruelling task of dealing with the future.
That future goes well beyond Jan. 20, 2029, when Donald Trump leaves office and many of his policies begin to be reversed — those that remain, that is, after the mid-term elections in 2026 or in fact after he’s finished backtracking in the face of strong opposition in the markets and the polls.
Whether they prove to be long-lasting or not, Trump’s tariffs will in the short term slow the U.S. and world economies and almost certainly blow Carney’s vow to balance the “operating budget” in four years out of the water. Short-term fiscal palliatives in a tariff downturn make sense but beyond that Carney needs to focus on what Canada does after the Trump era ends. He should therefore not lock in anything meant to deal with the moment that would have ruinous effects long afterwards.
A perfect example is his declaration “the era of integration with the United States … is over,” echoing the 1972 Liberal Third Option to diversify trade in the face of U.S. protectionism. That option failed utterly. Distant markets are nice but for Canada the greatest economic benefit comes from trade with the United States — the world’s biggest market sitting right on our doorstep. Once Trump is gone, we need to get back to unfettered trade with the United States. In fact, we need to try to persuade Trump to reverse course back to it.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
