The prime minister’s extended departure is adding to longstanding confusion about foreign relations and constitutional turf.
by H. Scott Fairley. Originally published on Policy Options
February 1, 2025
Prime Minister Justin Trudeau’s resignation as leader of the Liberal Party and his prorogation of Parliament until late March – at a time when U.S. President Donald Trump is threatening harsh tariffs on Canadian exports – present a multifaceted federal leadership challenge.
The void is seriously exacerbated by the silencing of parliamentary input and oversight at this critical time. Trudeau has given his party precious breathing space to select a new leader but has left the country painfully exposed to diplomatic opportunism from Washington.
Trudeau is still the prime minister but his cabinet is both distracted and enticed by a leadership race.
How then to effectively deal with Trump’s continued threats to impose a 25-per-cent tariff on Canadian exports on Feb. 1? As a first priority, Canada must act as one. That means federal leadership with parliamentary capability, which is sadly lacking, at least in the short term.
The broader question is whether U.S. tariffs portend longer-term economic warfare in aid of Trump’s idea of annexing Canada as the U.S.’s 51st state.
Canada has work to do
Canada can also help itself by addressing the longstanding problems caused by interprovincial trade barriers that limit business opportunities, increase consumer prices and reduce gross domestic product (GDP).
Confusion and doubt regarding federal leadership affirming its constitutional turf over foreign relations is likely to persist until the election of a new Liberal leader, a potentially fleeting new prime minister, and an ensuing federal election this spring.
The current situation is bad for the country as a whole, But united provincial leadership supporting federal leadership on tariff retaliation would be undoubtedly helpful.
Underlying Canada’s response at the federal level is a key constitutional issue that tends to recur whenever domestic politics confront major international threats or opportunities – what to do, who is to do it, and/or who holds a veto on what is to be done.
This issue stems from lingering complications arising from Canada’s Constitution, which lacks an enumerated federal foreign affairs power. Ottawa does have, however, clear constitutional authority to regulate interprovincial and international trade under Section 91(2) of the Constitution Act 1867.
While federal executive power to negotiate and enter into treaties has been relatively uncontested, the legislative jurisdiction to implement these treaties has been judicially – and certainly provincially – interpreted as divided, subject to the difference in federal and provincial powers outlined in sections 91 and 92.
Governments at both levels have weighed in before the courts, generating considerable uncertainty about where that division falls on major policy initiatives. This has hampered the development of a coherent foreign affairs policy for Canada as a whole.
At this juncture, a politically hobbled federal government and a potentially incomplete provincial/territorial consensus – caused by Premier Danielle Smith of Alberta – on an otherwise apparently united counter-tariff strategy remains a major concern.
This is both unfortunate and extremely serious for Canada’s national welfare. It also illuminates a gap in our constitutional understanding of who speaks for Canada in response to foreign nations, threatening or not.
This has happened before
In the 1980s, the ultimately successful federal commitment to free trade with the United States – later extended to Mexico – was vigorously challenged by various provinces on constitutional grounds, but they ultimately acquiesced.
More recently, Alberta, Saskatchewan and Ontario challenged federal jurisdiction to impose a federal carbon tax as part of Canada’s international commitments to combat climate change under the Paris Agreement. Those challenges failed in all instances before the Supreme Court of Canada in 2021.
In a forthcoming book, I contend that those decisions suggest a potential capstone to a complex historical, political and constitutional evolution recognizing a more complete foreign affairs power – legislative as well as executive – than exists in explicit constitutional text. It is an essential aspect of the constitutionally recognized federal general power for the peace, order and good government of the nation.
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A coherent national foreign policy is needed now more than ever. This may be too much to ask of provincial premiers who are justifiably focused on potentially conflicting provincial interests, even if that necessity has come before them by default. In fairness, that is not their job, regardless of whether Ottawa is doing its job.
In the meantime, however, the existential threat of a chaotic bully in the White House has prompted constructive introspection within Canada – primarily at the provincial level – to remove internal free trade barriers that have historically made it tougher for Canadian businesses to do business in other provinces.
Balkanized sales of wine and spirits centred on provincially regulated monopolies is one conspicuous example. Inconsistent regulation and licensing of transportation that imposes different weight limits on commercial trucks is another. There are many such examples, prompting Canadian businesses to conclude it is easier to do business abroad – largely with U.S. customers – than at home.
Following through on eliminating internal trade barriers
The Trump economic agenda against Canada may be a game-changer, however, suggesting that Canada must help itself internally in response to this new external threat. That is a clear policy option that provincial leaders have recognized. Hopefully, they will follow through.
While some progress has been made – an internal free trade agreement dating from 1995; an agreement addressing barriers within Canada’s service economy from 2017; regional initiatives between the western provinces from 2010; and a trade and co-operation agreement between Ontario and Quebec from 2009 – it is a patchwork quilt that continues to fall short of the mark.
Almost 90 per cent of Canadian small businesses continue to say it has been harder to do business at home than abroad. At the same time, economic analysis suggests that full liberalization of interprovincial trade would increase GDP per capita by four per cent.
That analysis also shows the existing barriers add between 7.8 and14.5 per cent to the price consumers pay for goods and services within Canada.
President Trump’s new approach to Canada and the rest of the world is that the United States needs no one and therefore can command every other nation to do his bidding or face the consequences. That is a terribly false premise but also a clear message for Canada to internalize its own national strength – political, economic and military.
The one silver lining to the cloud that currently hampers a clear vision for Canadian foreign policy and domestic responses to a Trump presidency is a collective national will going back to the forces behind Confederation – that Canadians like who they are; love their country, even when it is not particularly well-run; and have no collective intention of submitting to the idea of becoming President Trump’s mythical 51st state.
That is a promising start to redressing the current deficit of effective federal leadership in countering threats from abroad. Even more to the point, it is a commitment that federal leadership in waiting, regardless of who forms the next government, should honour.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.