Navigator logo

Whose FES is it anyway? Canada’s 2024 Fall Economic Statement

If the government had a story to tell with today’s Fall Economic Statement (“FES”), it went up in flames as Chrystia Freeland delivered a scathing resignation citing disagreements with the Prime Minister over fiscal priorities. ​

What we are left with is a rare “backroom” FES, with no Finance Minister to communicate the government’s vision – or lack thereof – in the face of a $61.9 billion deficit and the threat of a trade war with our largest trading partner.​

Picking up the scraps, we are left with a GST holiday (or a “political gimmick” as Freeland alluded in her resignation), a $17.4 billion corporate tax incentive, and a suite of border and security measures.​

While the loser of today’s events is irrefutably the government itself, there are several wins for corporate Canada: The extension of the Accelerated Investment Incentive, significant investments in AI, and an enhanced SR&ED program are likely to be well received by business.

Fiscal hawks, however, are likely to be disappointed as Finance Canada adds $21.8 billion to the deficit driven by ”significant unexpected expenses related to Indigenous contingent liabilities”.

Most importantly, the government has finally presented a response to the existential threat of Trump’s proposed tariffs: with new spending on the CBSA, RCMP, CSE, and Public Safety. All eyes are on Mar-a-lago to see if these commitments will help dissuade the threat of 25% tariffs which would decimate economies on both sides of the border.

You can find our analysis of the budget below. For more analysis, or support engaging government on any of the budget announcements, contact your Navigator team or reach out at info@navltd.com.

Three moves our next Prime Minister should make to win over Donald Trump

Often in romantic comedies there’s a moment where the protagonist realizes, “he’s just not that into you.” For Canada, that moment has arrived with President-elect Donald Trump.

Trump’s recent public comments and Truth Social post deriding us as the 51st state and referring to our Prime Minister as a governor, said the quiet part out loud. Adding insult to injury is Trump ally Elon Musk referring to Prime Minister Justin Trudeau as an “insufferable tool.” Trump isn’t just uninterested — he harbors a deep, visceral dislike, and disrespect for both the Prime Minister and his government — Deputy Prime Minister Chrystia Freeland chief among them.

Our relationship with the United States is vital but is defined by a very unbalanced power dynamic. While no Prime Minister can or ever should admit this outright, the United States could crush us if they wanted to. It’s awkward — not unlike when one partner in a couple makes far more money than the other and everyone knows it, but no one wants to talk about it.

But Trump has proven time and again that he can do away with that conventional awkwardness and has no issue boasting and saying things most decent people would find to be in bad taste.

All of which is to say that while Trump’s jokes about Canada being a state may not need to be taken literally, he and his rhetoric ought to be taken seriously.

Trump’s posts are most significant not for the current Prime Minister but for the next one. So, the more important question is not what Trudeau can do, but what must Pierre Poilievre do to win over the soon-to-be president?

First: Appoint a Charmer-in-Chief. An agreeable relationship between Poilievre and Trump’s administration is not guaranteed simply because they are perceived to sit on the same side of the political spectrum. This was made clear when Vice-President-elect JD Vance, despite his ties to Canadian conservatives, dismissed Poilievre as “Mitt Romney with a French accent.” Strange (and ignorant) as Poilievre doesn’t have a French accent nor does he have much in common with the multimillionaire former venture capitalist Romney.

Nonetheless, Trump is famously unpredictable and often bases his alliances on personal dynamics rather than policy alignment. And this susceptibility to charm brings hope. It was no accident that Trudeau brought longtime ally and Public Safety Minister Dominic LeBlanc — not the foreign affairs minister or deputy prime minister — to his meetings with Trump. LeBlanc exemplifies the affable, backslapping persona that is far more likely to resonate with Trump. Poilievre would be wise to adopt this approach by appointing a similarly personable and charismatic figure to liaise with the Trump administration.

Second: Appeal to Trump’s obsession with size. Trump’s fascination with size, grandeur, and superlatives is well-documented and extends to his approach to governing. For Trump, everything must be “the biggest” or “greatest ever.” While truth often takes a back seat to perception, this framing can serve as a strategic advantage for Poilievre. For instance, take the fentanyl crisis — a major issue for Trump. By tackling fentanyl with ambitious rhetoric, Poilievre can position efforts to stop the flow of the deadly drug as the boldest and most transformative initiatives ever undertaken by Canada. Framing policies in this way not only aligns with Trump’s narrative style but also creates opportunities for collaboration, with both leaders presenting themselves as champions of monumental change — a win-win.

Third: Emphasize a “common sense” agenda. Poilievre has an opportunity to reset Canada’s image on the world stage, moving away from the caricature of the current Prime Minister more interested in colourful socks and costumes than serious matters. Perception matters, especially with Trump. By projecting himself as a no-nonsense, brass-tacks leader focused on outcomes, Poilievre can appeal to Trump’s own preference for business-oriented governance. Feminism, rights for marginalized groups, or social welfare, frankly, are not things Trump has a lot of time for and Poilievre must emphasize his focus on the economy and his “common sense” agenda, in his dealings with the incoming president.

It will be challenging, but perhaps a new protagonist will have better luck dealing with the diva in what is not a romantic comedy, but the very harsh reality our country faces.

The border wake-up call is ringing — bring on the drones, helicopters and patrols

If you’re out walking after a bad storm, you’re liable to come across a few trees with limbs that are just hanging on.

One scintilla of added pressure, one strong gust, and the branch breaks.

This is the fragile reality of Canada’s immigration system today. The storm was entirely of the federal Liberals’ making. The next one will be entirely out of their control.

Canada’s immigration system is buckling under the weight of two critical pressures. One — capacity. Our country has failed to plan for the number of immigrants who have come here in recent years. Second — public sentiment. Now, for the first time in more than a quarter century, a clear majority of Canadians have soured on immigration. They’ve said enough is enough and made it clear there’s been too much, too fast, with insufficient supports.

These cracks are undeniable. So deep that — in a total about-face — the Liberal government has slashed its own immigration targets with a 21 per cent reduction in permanent resident targets for 2025.

Guess what? The Band-Aid solution won’t repair the cracked foundation.

But it gets worse. Because that foundation is about to have an elephant leap on top of it.

You don’t exactly need a crystal ball to predict that when U.S. President-elect Donald Trump assumes office in January, his campaign promise of mass deportations will drive scores of desperate migrants north. And we are in no way, shape, or form prepared to deal with this reality. Not from a policy, humanitarian, or strategic perspective.

Trump kicked off this debacle, not only with his promise of mass deportation but with the accusation last week that — as it stands right now — the problem is the other way around.

“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before,” he said. The penalty for our alleged crimes? A 25 per cent tariff “on all products.” On day one of his presidency.

So much for our special relationship.

Predictably, this development sent many of our media and government actors into a frantic tailspin of anxiety and protest. Articles pushed back on the idea that Canada should be equated with Mexico regarding border issues. Immigration Minister Marc Miller explained that there is zero ground for comparison, stating that the flow of migrants entering the U.S. from Canada and those entering from Mexico was “the equivalent on a yearly basis with a significant weekend at the Mexico border.” He continued, “We have a job to not make our problems the Americans’ problems, and they have a job not to make their problems ours.”

And there’s the rub.

He’s right about the facts at our border and the spirit of international co-operation that should underlie them. He is dead wrong about the realpolitik of our relationship with the next President of the United States.

Because for all the supposed people or illicit goods that might flow between our borders, America can handle our “problem,” our traffic — we, on the other hand, cannot even begin to dream of sufficiently handling a mass influx of migrants across our border and into our cities.

We don’t have the resources, space, or public appetite. Moreover, right now, we don’t have clear and focused public discourse on this issue.

We don’t need a sober “reality check” when it comes to this debate. What should be — but evidently is not — abundantly clear to our political class is that Donald Trump will say anything — fact or fiction — to improve his bargaining position and get his way. What we need is a strong plan to reinforce our border. Because that is the only way to prepare and do what we need to do — kill two birds with one stone.

First, to show Trump we’re making progress on a critical political priority for his administration: border security. Second, to prepare for the potential influx of migrants that will look to head to Canada the minute he takes office.

That plan should consist of more drones, helicopters and patrols as the RCMP and our border agency has asked for — but it also must include stricter punishments for the phoney, unauthorized immigration consultants and human traffickers that prey on people’s lives and livelihoods.

Borders are lines in the sand. Symbolic by nature. That’s precisely why they’re such fertile ground for politicians to grandstand, to deceive, to promise then, let down.

It’s also why reinforcing them with action, not words, is what the Canadian public must demand.