President-elect Donald Trump’s outrageous proposal that Canada become the 51st state of the U.S.A. has been a top news item since he first mentioned the idea at a November 29th Mar-a-Lago dinner with Prime Minister Trudeau.
Let’s take a look at the reasoning he puts forward to justify his proposal.
Trump says that America subsidizes Canada to the tune of $100 billion per year. He is referring to America’s trade deficit with Canada, which was actually about $68 billion in 2023 – substantially lower than the U.S. trade deficits with China and Mexico, for example.
A trade deficit is not a “subsidy” in the real world but it is in Trump’s mind, obsessed as he is with what he sees as a ‘zero sum’ economy — basically meaning that in trading with another country, anything they gain is your country’s loss. So, Trump reframes trade deficits as cash subsidies to other countries. And he says that the U.S. doesn’t need anything that Canada produces.
If I were Prime Minister for a day, here’s how I would respond to Donald Trump and immediately reduce those “trade subsidies” from the United States.
- Make America pay more for gas.
The largest component of our exports to the U.S. is oil. This is surprising given the fact that the U.S. is the world’s largest oil producer. However very little of the oil produced in the U.S. is of the type of heavy crude that their oil refineries have been historically structured to handle. Without Canadian oil imports, America would be forced to spend literally billions of dollars refurbishing most of their oil refineries to process the type of light crude produced in America.
Following Trump’s reasoning, I would immediately ban exports of our oil to the U.S. to substantially reduce America’s “subsidy” to Canada.
- Make America thirsty.
Canada is, not entirely correctly, perceived to be water-rich and indeed, Canada has a lot of water – more than two million lakes and countless rivers. Nearly nine percent of Canada’s total land surface is covered by freshwater, and Canadian rivers discharge close to 7% of the world’s renewable water supply. Unfortunately, approximately 60% of our water drains northward, while 85% of our population lives close to our southern border.
Exporting bulk water is forbidden by law in Canada. We can only export bottled water. However, there are many indications that pressure on Canada to export bulk water will get worse. Trump has already said he wants Canadian water.
Despite his statements, surely Trump would not object to this country unilaterally turning off the tap and immediately forbidding all Canadian water exports to the U.S. as this would further reduce America’s “subsidy” to Canada.
- Make America dark again.
America consumes more electricity than it produces. It makes up most of the difference by importing vast amounts from Canada and Mexico every year. Canada accounts for approximately 90% of those annual U.S. imports of electricity.
In the spirit of reducing America’s “subsidy” to Canada, I would immediately halt all electricity exports to that country.
Of course, the whole proposal to amalgamate with the U.S. is ridiculous. We are very different countries with very different political systems. And as Aaron Ettinger of Carleton University has observed, if Canada became the 51st U.S. state, the Republicans would never win another general election.
Nonetheless, what is clear is that it is time that we Canadians stood on our own two feet, found other trading partners, and ended “American subsidies”.
Daily atmospheric CO2 [Courtesy of CO2.Earth]
Latest daily total (January 19, 2025): 428.37ppm
One year ago (January 19, 2024): 422.80ppm
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