On a deeper level, Canada’s reliance on an ambiguous metaphor evoking a fragile spirit of unity reveals a big flaw in our federal system.
by Jörg Broschek. Originally published on Policy Options
January 17, 2025
About a year ago, Prime Minister Justin Trudeau announced another “Team Canada” approach to “whatever gets tossed at us” after the November U.S. presidential election.
Such calls have only become louder since Donald Trump won and threatened to impose a 25-per-cent tariff on all goods from Canada (and Mexico) when he takes office again.
As Canada experiences its own “Zeitenwende,” a Team Canada approach seems to be common sense. But on a deeper level, Canada’s reliance on an ambiguous metaphor evoking a fragile spirit of unity reveals a weakness of our federal system: It lacks a formalized framework for intergovernmental co-ordination.
The current absence of effective leadership in Ottawa, as well as increasing splits among the provinces on tariff questions as they take a larger role in trade policy, give an even greater edge to Trump in this upcoming battle.
The global order and our relationship with the United States is changing profoundly and at a rapid pace. Accordingly, while the tariff threat is imminent and warrants full attention, it is equally important to focus strategically on the long-term challenges.
The federal government and the provinces need to strengthen immediately what the European Commission (EU) calls readiness and preparedness by institutionalizing – rather than evoking – a Team Canada approach through an intergovernmental agreement for trade policymaking.
A long-standing issue
Proposals to establish a formal framework for Canadian trade policymaking have been on the table for quite some time. But they have never been enacted.
As a consequence, the effective co-operation required to address policy challenges often hinges on the qualities of the leaders of the day, rather than on established intergovernmental processes and mechanisms.
Norms are important for intergovernmental relations. They provide guidance and can facilitate a shared understanding among leaders and senior bureaucrats representing different jurisdictions over time. However, without a robust institutional foundation, it is difficult to cultivate and consolidate such norms.
The elusiveness of the Team Canada approach in the emerging trade dispute with the new Trump administration indicates the frailty of existing intergovernmental norms.
In trade policy, there are at least two distinct versions of Team Canada. One is Ottawa-led, the other is province-led.
The Ottawa-led Team Canada approach had its origins in the negotiations for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
Because the European Union was willing to enter negotiations only if Ottawa could guarantee provincial compliance with the agreement’s provisions, the Harper government afforded premiers an unprecedented level of engagement.
At times, the provinces (and territories) were even present in negotiations as part of the Canadian delegation.
Team Canada approach worked in NAFTA renegotiations
The Trudeau government reactivated this model in 2017 when then-president Trump in his first term announced his intention to renegotiate the North American Free Trade Agreement (NAFTA). Federal-provincial collaboration was strong, but the provinces no longer enjoyed a seat at the table.
“Ties of trust,” as Christopher Kukucha called them, helped to make federal-provincial co-ordination work during CETA and NAFTA 2.0. But these ties were highly contingent on the persistence of personal relationships. Intergovernmental norms, by contrast, are more enduring.
Because such norms are weak, the current leadership vacuum at the federal level has created an opportunity for the provinces to fill the void. Ontario Premier Doug Ford, in particular, is determined to pre-empt this space.
Thus, “Team Canada” now means that the provinces, not Ottawa, drive Canada’s strategic response to Trump’s tariff threats.
This province-led approach aligns with the spirit of the Council of the Federation, which was established more than 20 years ago. One key objective in the founding agreement is to exercise “leadership on national issues of importance.”
Back then, Queen’s University economist Thomas Courchene coined this “pan-Canadian provincialism.”
The ascendancy of this Team Canada version was on full display during the latest Council of the Federation meeting in Toronto in December – held coincidentally on the same day as Chrystia Freeland’s unexpected resignation as federal finance minister and deputy prime minister.
At the time, Ford stressed the importance of the provinces and territories during such “uncertain times in Ottawa.”
The changing nature of trade liberalization
Historically, the rise of the provinces in trade policymaking is remarkable. Since the Tokyo Round of the 1970s, they have gradually emerged as stakeholders without having formal constitutional authority. The reason for this development is the changing nature of trade policy.
As international trade liberalization efforts moved from tariff reduction to non-tariff barriers such as product- or process-related regulations that restrict import and export flows, it began to affect the provinces more directly.
Because Ottawa has no constitutional power to enforce compliance with international trade agreement provisions that fall into exclusive provincial jurisdiction, intergovernmental co-ordination became more important.
From the Canada-United States Free Trade Agreement (CUSFTA) of 1988, which became NAFTA in 1992, over CETA to the Canada-United States-Mexico-Agreement (CUSMA) of 2018, the provinces have played an increasingly visible role in international trade negotiations.
In 2010, 2011 and 2012, the provinces explicitly called on the federal government to create an intergovernmental framework agreement for trade policy co-ordination through the Council of the Federation. This proposal aligned with the Ottawa-led Team Canada approach.
Such an agreement would have formalized the roles and responsibilities of the federal government and the provinces in trade policymaking. But more importantly, comparative research also shows that the institutionalization of ongoing co-ordination is a condition for the development of robust norms based on a collaborative intergovernmental spirit.
Ottawa, however, never followed up.
This haunts the federal government now. Ironically, the provinces are taking centre stage when the reimposition of massive tariffs represents the main trade policy challenge. Unlike non-tariff barriers, tariffs are unambiguously an exclusive federal jurisdiction.
Canada’s response to Trump tariff threats risks unintended consequences
To be sure, it is crucial to mobilize the power of the provinces because of their constitutional authority over key jurisdictions such as energy and their existing relationships with stakeholders in Canada and the United States to craft an effective response to the Trump administration.
Considering the magnitude of the current challenge, however, a province-led Team Canada approach is inadequate. It will contribute to weakening Canada’s already vulnerable position.
The existential crisis unleashed by the new Trump administration is unprecedented. It is quite different from the CUSMA negotiations the last time Trump was president. The destructive stance of Trump 2.0 is much more threatening than it was seven years ago.
One voice needed, not many
It is therefore even more important for Canada to speak with one voice under strong federal leadership in international affairs.
The disagreement among provincial governments over Ontario’s proposal to cut off energy exports to the United States – Alberta Premier Danielle Smith even threatened that this would cause a “national unity crisis” – suggests they are unable to forge such a unified strategy.
The prospects for a return of the Ottawa-led Team Canada approach after Freeland’s resignation are bleak. The former finance minister had forged the personal working relationships – the “ties of trust” – with the provinces that are necessary to compensate for the missing intergovernmental framework.
Besides, the days of the current Trudeau government are nearly over.
A relaunch of the Ottawa-led version under Pierre Poilievre is certainly not impossible. But his divisive leadership style, his strained relationship with Ford and the lack of programmatic substance we have seen from him so far, makes this difficult to imagine.
The fact that even now Poilievre continues to repeat his “axe the tax” mantra instead of offering a viable plan to address the existential crisis for Canadian sovereignty speaks volumes.
The omnipresent calls for a Team Canada approach stand in marked contrast with the reality of intergovernmental relations today. It’s past time federal and provincial political leaders take this problem seriously and start a conversation about tangible reforms to make Canadian federalism more resilient.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.