Chairman's Desk

How Canadian politicians should prepare for a second Trump presidency

Part cliché. Mostly truism. It is said that there are no sure things in politics.

But, after his unprecedented victories in both New Hampshire and Iowa, Donald Trump locking up the Republican nomination looks pretty damn certain.

When politicians are presented with uncomfortable realities, they can do one of two things. Run around aimlessly with their pants on fire. Or, wake up, become serious and get to work.

Sadly, Canadians politicians have been trending down the former path this past week.

Jagmeet Singh described Trump as “vengeance-filled” and an “egomaniac.” Justin Trudeau opined about his “unpredictability.”

Characterizations as profoundly unenlightening as they are unhelpful.

While those characterizations might well be true, not only is it unwise to further rile an egomaniac by calling him one, it looks weak to respond to a brewing development by perceiving it first as a major threat, rather than an opportunity.

It looks weak, because it is weak.

There may be a storm brewing south of the border — but, frankly, we have bigger problems to deal with. Our economy, and more specifically our productivity, is in a terminal state of weakness. And if Trump is going to create a storm of unpredictability, danger, and vindictiveness, we cannot afford to make excuses but need to use the wind from his storm to sail our own ship faster, and more efficiently than ever before.

The scale of our problem is staggering. Leave aside all the issues we have with housing, addiction to unskilled labour, or whatever else it may be. Our productivity, the fuel of economic growth, driver of competitiveness, and elevator of living standards, is a catastrophe.

Researchers from the Centre for Productivity and Prosperity found that four decades ago, when adjusted for inflation and currency fluctuations, Canadians enjoyed a higher per capita standard of living than average among the major Western economies.

Now, Canadians are, on average, annually living $5,000 below that average. And if the current trend continues, we will be nearly $18,000 below that average by 2060.

What’s worse, there is nothing in our current economic planning or outlook that indicates we are on course to rectify that trend. The problem is as acute as it is current. At the start of this year, the Bank of Montreal’s chief economist noted our labour productivity has now tumbled for six consecutive financial quarters.

If Trump, anathema he might be, becomes president again, one can only hope the panic that will ensue among our political class translates into a much-needed kick in the ass.

In fact, it just might be that a Trump victory is good for Canada.

Our economic problems run so deep that an effort analogous to a wartime one is needed. And, if Trump needs to be a catalyst for that, by sidelining us from free trade, or enacting superficial, performative measures at our border, so be it.

The brutal truth is that, with or without Trump, we are in a national economic emergency. Some action is better than no action, to be sure. That said, I would have preferred, if during the Liberal’s cabinet retreat this week, the government had outlined a plan to tackle our productivity emergency instead of spending all this time on a “Canada-U. S. engagement strategy.”

It isn’t as though we are in a position of strength when it comes to economic negotiations with our American friends. Our productivity is in a sustained free fall that hasn’t been seen since the postwar years. While the U.S. will remain our most important trading partner and ally, if this ailment continues to fester we will become increasingly less important to them.

Sadly, we already are. And our politician’s current rhetoric toward the upcoming U.S. election reeks of ignorance on this point. It has no impact on Trump’s political calculus if Trudeau and Singh portray him as the big bad wolf. If anything, it probably plays to his advantage.

What would make Trump sit up, take notice and take us seriously? A concentrated effort to restore our economic usefulness.

Two birds, one stone.

This article first appeared in Toronto Star on January 28, 2024.

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