On Thursday, Prime Minister (PM) Justin Trudeau issued his ministerial mandate letters, focusing on a broad theme of building “a more resilient future” for Canadians. These letters highlight the PM’s expectations from each minister, serving as concrete policy outlines and goals for his Cabinet.
Trudeau asked Foreign Affairs Minister Melanie Joly to focus on Canada’s relationship with the neighbouring United States (US), which took a hit during the Trump presidency. In his letter to Minister Joly, Trudeau said, “Work with me, and in close collaboration with other ministers, to further strengthen our partnership with our closest ally, the United States (US).”
The PM made International Trade Minister Mary Ng in charge of drafting the “Roadmap for a Renewed US-Canada Partnership.” He also urged Ng to take a harder stance against America’s protectionist policies, asking her to “lead Canada’s efforts to combat protectionism, unfair trade practices, and economic coercion around the world.” Trudeau added, “You will also engage the US to address bilateral trade issues and protectionist measures, including with respect to government procurement and in the automotive, energy, and agricultural sectors.”
Relations between Canada and the US deteriorated after a trade dispute following former American President Donald Trump’s tariffs on Canadian steel and aluminium. Ottawa retaliated with its own tariffs on American goods. However, some elements of the tensions that characterised US-Canada relations under Trump remain under the Biden administration, which has also angered Ottawa with some new policies.
For example, Canadian Deputy PM Chrystia Freeland and International Trade Minister Mary Ng wrote a letter last week to top US senators voicing concern over President Joe Biden’s new Electronic Vehicle (EV) tax credit. “We are deeply concerned that certain provisions of the electric vehicle tax credits as proposed in the Build Back Better Act violate the US’s obligations under the United States-Mexico-Canada Agreement,” Freeland and Ng said in the letter. The ministers added, “We want to be clear that if there is no satisfactory resolution to this matter, Canada will defend its national interests, as we did when we were faced with unjustified tariffs on Canadian steel and aluminium.”
Trudeau also raised this issue during a trilateral summit with Biden and Mexican President Andrés Manuel López Obrador. At the time, Trudeau urged Biden to reconsider the tax credit due to its significant impact on the Canadian auto industry.
Later, Sherrod Brown, a Democrat from Ohio, responded to Canada’s threats, saying, “I don’t really care what Canada thinks. I care about the effect on American workers.”
Last Tuesday, the Biden administration also raised concerns over Canada’s plans for a Digital Services Tax, which will levy a 3% tax on the revenues of American tech giants Google and Facebook. The government won’t apply the tax till 2024. However, this adds to the ongoing trade tensions between the two countries. The Biden administration is yet to respond to this latest policy guideline issued by Trudeau.