Gwyn Morgan is the retired founder and CEO of Encana Corp. He has been a director of five global corporations.
“But the reality is that virtually all of Mr. Trudeau’s policies
are economically suicidal in the face of Mr. Trump’s avowed actions.
Clinging to those policies in the face of Trump-quake could prove
to be the biggest mistake made by any prime minister in Canadian
Donald Trump’s election victory set off a political earthquake that has deeply shaken Americans. Earthquakes are often followed by devastating tsunamis generating huge waves travelling far beyond the quake’s epicentre. Yet, even as those “Trump-quake” waves threaten to sink our economic ship, Prime Minister Justin Trudeau seems determined to maintain his pre-quake course.
Here are some of the dangerous shoals that lurk along that perilous route:
Mr. Trump is anti-free trade. His advisers have said that Canada isn’t their target. Even if that’s true, the recent decision by General Motors to move 600 jobs to Mexico demonstrates that Mr. Trump’s protectionist bullets can ricochet across our border. Given his bombastic threats, there’s no way auto makers will move jobs from the United States to Mexico, so their only option is to move those jobs from Canada.
Making matters worse is the new administration’s plan to exempt export revenues from income tax, while disallowing imported goods as a tax expense. These damaging actions are occurring even before NAFTA comes up for reconsideration. Mr. Trudeau is pivoting toward China as an offset to Mr. Trump protectionism. But a free-trade agreement with corrupt and opportunistic China would be strategically and ethically unwise.
And given Mr. Trump’s animosity toward China, free-trade discussions with China are sure to damage Canada’s negotiations with his administration.
Mr. Trump plans to slash corporate tax rates to 15 per cent, erasing Canada’s previous advantage that saw U.S. companies changing domicile through reverse takeovers. Adding Mr. Trudeau’s carbon tax tips the tax scales in the United States’ favour.
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