How Canada Can Win the Trade War with the Hon. Mélanie Joly

Canada is facing a new trade war, and businesses are bracing for uncertainty. How can we defend our economic interests, secure investment, and navigate the unpredictability of U.S. trade policies? In this episode, the Minister of Foreign Affairs of Canada, the Honourable Mélanie Joly, joins Toronto’s business leaders for a frank conversation on the future of trade, the impact of tariffs, and what Canadian businesses must do to stay competitive.  

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From the Toronto Region Board of Trade, this is Toronto Talks. Toronto, let's talk tariffs. We will make sure that we continue to defend Canadians' interests in the context of this unjustifiable trade war that was launched by the US. Also, we'll make sure that we will never negotiate against ourselves. not true that we will go through this psychodrama every 30 days. A day after tariffs took effect on Canadian goods, Canada's Minister of Foreign Affairs held a roundtable conversation at the board's office. Members of our Business Council of Toronto were able to ask the Honourable Melanie Jolie how the business community and government should approach this new trade war. What are we going to do to provide that long-term certainty for businesses to invest in Canada? Letting all Canadians coast to coast to think that way has been a challenge. I'd love to get your perspective on how we accomplish that. I'm just curious, what do you think the EU would, how far would they go to support us? Today's episode brings you highlights of that conversation. To begin, here's the board's Executive VP of Policy, Advocacy and Stakeholder Relations, Roselle Martino, in conversation with Minister Jolie. For my microphone, Perfect, great. Thank you so much, Minister. Minister, can you just tell us, you know, hum a few bars about those engagements with Trump administration officials in Washington, their goals? You know, how do we respond to that? So, of course, there are different levels of engagement. And for my part, I've been five times to Washington and Mar-a-Lago. And my message when I'm in Washington, Rozelle, is we have not only a lot of arguments and a lot of allies in Washington, but we are stronger than some of us may think. Why? Because we're the biggest trading partner of the US. So when we use our purchasing power and our people decide to stop buying American or just buy Canadian or change their vacation plan, we're really having an impact on key districts and key states back in the US that creates political pressure back to Washington. We buy more than China, Japan, the UK and France. We're the biggest client of the United States. And so, the only way that the Trump administration will change course, and I want this to be extremely clear, none of us will change the opinion of President Trump. But it's the American people themselves. So our job collectively is to make sure that the American people are convinced that these tariffs are taxed on them. That they will pay more at the pump. That they will pay more at the grocery store. That they will pay more to buy a new house. These are the arguments we have. And if you look at the polls right now, the polls are showing that we're winning that communications battle, because that's a battlefield that we need to bear in mind. And that's the one that I must say must be the most important when dealing with President Trump. He's also looking, obviously, at the stock market, and we've seen what the stock market has been doing. And he's also looking at the price at the pump. So, and if there's a country that understands the most Americans on the face of this planet, it's us. And when I was just in Europe, and I can answer that question also, Rosal, I was explaining to my European colleagues what was going on in the US. And now they're catching up to where we are. But I can go into that. Okay. Just a good segue to what you mentioned, Minister, What should businesses across Canada expect from the Trump administration in terms of Kuzma renegotiations? You know, is there any terms or anything that can be done to escalate that? So don't think that we haven't had conversation about saying, "Hey, let's reopen NAFTA, Kuzma." But the problem we've had is it's not clear what the American president wants. So, it's not as if we're not saying it's, "Yes, let's talk about trade." But I've had conversations with colleagues in Washington saying, "Okay, but at the end of the day, what do you guys want?" And I got the answer, "We're about to know." There's one decision maker in the system. He's the only one to know. And so we need to be able to address that reality. And meanwhile, while we may be talking about trade, we have to think about anything else that we could also look into to make sure that there is cooperation. I just had a phone call with Marco Rubio. And the Prime Minister had a phone call with President Trump. And Dominic LeBlanc had a phone call with Howard Lutnick. The negotiations are continuing. But as mentioned, at the end of the day, only President Trump and Prime Minister Trudeau will get to a deal. And that's not only because it's us. It's like that for every single country. And that's what I said to my colleagues as well. When Prime Minister Modi goes to Washington from India and he learns that India is being imposed tariffs during the context of a state visit, that's just a reality that may happen to others. So that's an example. I could go on with many other examples. So that's it. We have lines of communications. There are negotiations happening. But let me be frank. We will never negotiate against ourselves. And we won't get through this another psychodrama every 30 days. Because we know that this drives uncertainty. And uncertainty is obviously allergic to any form of investment. So we need to find a way to get to predictability. to reduce risk of doing business in Canada. After these opening questions, the forum was open to members of the Business Council of Toronto and other prominent CEOs from our region. Here's that part of the conversation, beginning with Michael McCain, Executive Chair at Maple Leaf Foods. I think today a really bold pivot to a really clear, simplified agenda around economic prosperity to lead us to the promised land of a better future away from the United States, actually diversifying from the United States in any number of our economic obstacles would be really prudent and really fast. So what might those be? Yeah, thank you. Okay, these are big questions. First and foremost, how will we win? We will win only if we're united, because we know the US is divided. And we know they're particularly divided on this issue of tariffs. And we know that many states that are Republican states don't agree with the tariffs. And the Democrats know also that the tariffs may be a way for them to get back in the game in terms of having a message that is resonating more with Americans. That's what we're hearing, this is just a fact. And so, based on that, we need to find a way to stay united including on energy, including on things that technically have divided us sometimes, somehow. But now it's our entire economy. It's all the jobs across the country that are at stake, Michael. It's not one job more in Atlanta, Canada, where you're from, or here, or in Alberta. It's all important. Just to give you an example, we send-- The US is relying on our uranium for 95% of their consumption. That is fundamental to all the nuclear sites that are powering many home heating systems across Georgia, North Carolina, South Carolina, etc. There is over-reliance also on hydro in Ontario and in Quebec. The entire northeast grid is linked to Ontario and Quebec. Fertilizers, $1.7 billion more that it would cost in terms of if we would put tariffs, export tariffs on potash for farmers in the U.S., which they all rely on Saskatchewan potash and fertilizers. And of course, there's oil and gas. We haven't put that on the table yet, guys. We kept that in our game, in our cards, as cards that we could potentially play if this would escalate. And the U.S. knows that. Jean-Marc, resident CEO of Honda Canada. The opportunity that's open to Canadian businesses to do business with those we have trade agreements with. Yeah. And I heard the Prime Minister a few weeks ago talking about those, that we're not fully taking advantage of those. Why? Because it's easy to deal with the U.S. Yeah. Obviously, that's something that we need to explore more aggressively. But I'm just wondering, what is the percentage of business, if you will, U.S. versus other parts of the world in terms overall? What is that opportunity? What does it represent? I don't have the latest number, but it's pretty much 75% of our trade is with the U.S. and 25% with the rest of the world. And that could vary. I think at one point it was 78, and it went down to 70, but there is an over-reliance. And guys, we can't change our geography, so we'll continue to do business with the U.S. Just saying we have to diversify to create that market internally, to diversify with other also countries, And at the same time, we need to find a way that we have predictability in a relationship with the US. It's enough. It can't continue every 30 days. So that's really, really important. And that's why we won't negotiate against ourselves. We will use the cards that I was saying as ways to negotiate. And at the same time, the president won his elections based on two topics, immigration and cost of living, affordability. And this one, we're winning the hearts and minds of Americans. And when Prime Minister Trudeau made his speech, when was it, yesterday? Yesterday. He was live on CNN. He was live on Fox News. people are listening. And they know him south of the border. Not saying everybody, you know, is extremely political, but they know him more than other leaders in the world. And so they listen when he talks. And he's an Anglo-Saxon also. He speaks. And he's able to, you know, talk the same type of language and the same type of North American reality. So that's why I'm just saying we should, it is normal that we're worried, it is normal that we're anxious, but actually the strategy is working because it is through political pressure that we will be able to push back against this aggression. Minister, just pulling on that thread, it's a perfect segue before I go back to the audience. How is the federal government approaching supports for businesses and workers across the country? Should tariffs continue or this threat of tariffs continue for an extended period of time? Well, of course, we've worked on different EI options and we're working with businesses on that, too. There will be a new prime minister and that prime minister will definitely have a plan for the economy. And we'll see. I think that Canadians will want to decide what type of future they want, particularly on the economic front. But I really, really want to stress this, that I think for me the question of our economic future is extremely important. We're in this very important moment where it is not only doing a deal with the U.S. We need to have a very strong economic industrial strategy at home and it would be a pleasure for me to be able to work with all of you on that. Thank you. Now, Minister, you mentioned oil and gas. Michelle Heridence, President of Enbridge Gas, turn to you. Thank you, Minister, for coming here today. And, yes, I represent Enbridge, and we are a very proud Canadian company. It's 70 years that we started moving Canadian crude oil to the U.S. and incredibly integrated, and that's really reflective of energy in North America. And I think that would be my feedback. I mean, I've been fortunate in the 25 years that I've been working to work from the Alberta oil sands to the refineries in Sarnia, and now I lead our gas distribution business. Four million homes and businesses here in Ontario that we keep warm and safe with natural gas, and three million in the U.S. that we do the same thing for. And I think it's really important to recognize how integrated the system is, but also to recognize that it's not just Canada that's an energy superpower. In fact, I would say in the last decade that Canada's position has eroded significantly, and the U.S. is an energy superpower. And when we look at it as, quite frankly, a company that's in every Canadian's pension plan, and we're taking care of what we need to do for our shareholders, I can also tell you that of the last $30 billion that we've invested, $29 has been in the United States. Because we have the certainty and the clarity that we need for our shareholders, that they'll get that return on their investment. I always describe my mother-in-law. She's over 100 years old, lives in Saskatchewan. She counts on that dividend that we bring her every quarter. So my question for you is, I agree, we have an energy emergency here. We have, war is not a bad word for what we're describing here, but what are we going to do to provide that long-term certainty for businesses to invest in Canada and to actually build out what we need? We need that infrastructure, whether it's pipelines or ports, it has to happen. I agree with you. We need the right infrastructure. I was just at the Vancouver port three days ago. Sorry, I'm getting mixed up with the timeline. It's too much travel. and to make sure that there was not an issue with fentanyl at the port, etc., meeting with the port charities in line with our border plan. But also we need to continue to be even more competitive at our different ports because we are indeed competing with, for example, the LA port, Los Angeles port, or, you know, on the east coast. So I agree with that. I think as for energy infrastructure, I think it's a fair conversation to have with Canadians, including with my folks back in my beautiful Belle Province. And I think that there is a reckoning now that we cannot be over reliant on the US. And trust me, I understand how the different energy infrastructure is organized. I get it. Thank you. Thank you. Hi, Minister. Thanks for being here today. Jenna Mosley with Toronto Hydro. So a couple things from the electrical industry that I just wanted to make sure were top of mind, and then I do have a question for you. So I believe we've been working through Electricity Canada and just helping the government understand some of the intricacies of electricity and certainly it being such an essential service for Canadians and for Americans. It is a delicate balance. And we just want to thank you and your government for listening and continuing to listen because it's incredibly important that we're able to continue to have access to essential equipment and materials that come from the United States and or internationally. And we need to continue to invest in opportunities there to look internationally for those trade agreements. And we want to make sure, I think, as business leaders, that you truly do have the information that you need. And then the second thing I just encourage you and your team on is to make sure we're really hearing real time what it is you are thinking. Because I think what we heard today were a lot of excellent concepts. But for us to be out there selling the message and supporting where we want to go together in unity, we need to feel like we truly are taking some big, bold moves and we're moving forward with that. So I guess it's a question and an ask. Yeah, thank you. Okay, a couple of things. First, I want us to be clear. We'll continue to be the friends of the Americans and we will continue to have family members, friends, etc., on both sides of the border. That's just who we are as Canadians. And we should use these networks to our advantage to tell them what we're going through and how much this will have an impact on them. And they should tell their friends and they should tell their family members. And we need to organize. This is not a concept. This is true. This is real. That's what you're doing in your businesses every day. You're organizing yourselves to make sure that you have more clients, better market, etc. This is political organization, 101, guys. Okay, so, you know, a mayor, you know, a friend of the governor, you know, you just use all these networks. And you make sure that our narrative, which is, you guys started this trade war. This was something that we never, we did everything to prevent, and this is hurting you back. It is important that we say that to them and that they spread the message. Really, really, really important. This may be the first time that President Trump is actually really feeling political pressure. Let's ramp up that pressure. Okay. First. Second, acts of kindness with American people coming from Canada is also just part of who we are and our nature, but also great communications. So when we help the wildfires in Los Angeles, of course, American people, just remember, they don't have any problems with Canadians. When you look at all the polls, we're the ones that they love the most in the world. So there's no frustration towards us. They actually don't really understand why there are American tariffs against us. Let's use that capital, that friendship, to put pressure on President Trump himself. He never talked about the 51st state during his elections. He never talked about the rhetoric regarding what was going on, these tariffs against Canada. Never. Nobody was prepared for this. None of you, none of us. This came out of nowhere. So I think showing that you can cooperate through indeed your employees, working with your supplies, but meanwhile, understanding that you may want to look at your supply chains, guys, and your purchasing powers to make it pro-Canadian. And this may cost a bit more, but you will be saving jobs every day. That's also a duty that you all have to do. That's definitely what we will do as a government. And with the new prime minister, et cetera, for sure we'll look at our procurement policies. That's what the Americans are doing. Of course, that's what we'll do too. So I could go on and on and on, but I gave you three things concrete to act upon. We just have time for a few more questions. Tracy and I will come to you Jeff. Tracy please. Thank you Minister for being here. Tracy Garrett I'm the CEO for Aviva which is one of Canada's biggest property and casualty insurers. We're often described as a sector as the economic shock absorber for millions of consumers and businesses across the country and at this time of crisis we're ready to step up and play our part But we should be under no illusion that if the tariffs hit as proposed, it will have an impact on claims costs for those businesses and consumers across homes, properties and businesses. And that will result in premium increases for customers at a time that they can ill afford it. One of the mitigants that we can all consider, and what I've been really encouraged by in the last two or three weeks, has been a conversation about how within Canada's borders we get out of our own way. And we seek to remove frictions in our own system. I would really encourage both federal and provincial governments and regulators to look at the ways and to accelerate and to be much clearer about where there could be convening authority to actually make some of that friction removal happen and happen really quickly. Do you have any thoughts on that? Well, I think it's a good question. I think that the prime minister has been convening also the premiers. It's not only political leadership. Like, it's easy to say, oh, the prime minister or the premiers are not taking care of it. Fundamentally, it is coming from these different professional groups. In French, I would say, all professionnels, so the professional orders, like the engineers, doctors, et cetera, lawyers like I am, being very protectionist. or also making sure that they are willing to put some of their interests on the table. Same for the unions, same for the business sector. It's not only a political issue, it is fundamentally a business and a worker's issue. So, who is ready to take that step? We have many ideas. We've put them forward. We'll keep pushing them forward. No, but like I think this is our ha-ha moment. And I come from a province which I love but has a lot of protectionism. And sometimes there's...so that's first. Second, sometimes in my home province of Quebec, people do much more commercial missions to New York State or to New Hampshire and New England than actually to the Maritimes or to Ontario or to BC. That doesn't make sense. Because there are different reasons for that, including the fact that sometimes because it was international trade, they had access to programs and stuff. We need to change that to make sure that there's more incentives to create these relationships. And maybe that if we talk to each other even more, we will be able to have stronger infrastructure across the country. But this is a moment of national unity. And coming from Quebec, I'm telling you, the people that I represent in my home writing of Montreal, they're ready to embrace this Canadian journey. And I'm super proud of that. That's wonderful. Last question to Jeff, and then I'm going to turn to Minister to wrap it up. Great. Thank you, Minister, for fighting for Canada. My question is actually very similar because I see it as a generational opportunity to reduce some of these frictions. Exactly. We walk through past the LCBO downstairs, and everybody's scraping off the California wine. Isn't it as simple as pushing to say, let's put Canadian products in there? We can't buy BC wine here, for example. It seems that it will be a great opportunity as a first step to open some of those things up and kick the door open. So we're looking to see some of that from the administration. We're trying to find a way to put things back on track, but at the same time using your levers. So I just want you to know that we're at it. We're doing this. This is exactly the work that my team and I, the Prime Minister, Dom LeBlanc, his team, are doing as we speak. So it's not as if it's not important. Yes. Meanwhile, we also will have to work on what's the plan for Canada to invest in infrastructure, to invest in our new jobs, to have a strong industrial policy. And that will be also part of what is being discussed in the future elections that are coming up. What's the grand bargain here? How can we make sure that this crisis doesn't go to waste, like I mentioned? And, you know, Michael, you were saying the government needs to focus on the economy. Absolutely. And that's where I am. The other thing is, is on your side what you need to do. like I mentioned a bit earlier, using all your networks, using your purchasing power as citizens, but also as business people. And fundamentally, invest in Canada. I'm calling on you to invest here. And if you're asking your questions whether you should invest elsewhere, let's have that conversation on how we can make sure that we protect our jobs here at home. I don't want you to take decisions that are actually having an impact on people here without having conversations on how we can make sure that you're staying here. That's really important. And as Canadians, I think, and as business people, this is a duty you have. And as a politician, and as a leader of the government, the duty I have is to make sure that we find ways to keep jobs at home. And this is very serious. This is the challenge we have, particularly in the next six months. Thank you. Minister, thank you all so much for today. Minister, we are so grateful for your time. Thank you so much. Thank you for all you're doing for us. That's all for this episode. Thanks for listening to Toronto Talks. Don't forget to subscribe wherever you listen to your podcast and keep talking Toronto, especially in this remarkable time. 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