To address Trump’s border concerns, feds expected to spend more than $1-billion: senior government source

# In the next cabinet shuffle expected later this month or next, U.S.-Canada relations will be a key factor in Prime Minister Justin Trudeau’s political calculus, say Liberal sources.

>Faced with U.S. president-elect Trump’s threatened 25 per cent tariffs on all imported Canadian goods, the Trudeau government is expected to spend more than $1-billion to stem the movement of undocumented migrants and fentanyl from Canada to the United States, according to a top government source.

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>Key discussion topics [at Trudeau’s Nov. 29th visit to Mar-a-Lago] included Trump’s proposed 25 per cent tariff on Canadian imports, border security, fentanyl, NATO, the Ukraine war, pipelines, and the upcoming G7 meeting in Kananaskis, Alta. For Canada, the most pressing issue was the potential tariffs on Canadian goods. A source told The Hill Times that one of Trump’s team members suggested tariffs as a means to balance the U.S. budget, with potential exemptions negotiated later on a country-by-country basis.

>“They [Tariffs] make a lot of money,” Trump told NBC’s Meet the Press on Dec. 8. “I’ll go a step further: tariffs are going to make our country rich. Tariffs are going to help us pay off $35 trillion in debt.”

>Although the flow of fentanyl and undocumented workers from Canada to the U.S. is negligible compared to Mexico, Canada is taking concrete steps to address Trump’s concerns. The government is expected to make official announcements in the coming weeks. Trudeau assured Trump that Canada plans to enhance border security by purchasing helicopters, surveillance drones, and hiring additional officers. The total cost of these measures is expected to be more than $1-billion, according to the government source. Trudeau emphasized in the meeting with Trump that Canada’s border is safe, and it was unfair to equate Canada with Mexico on these issues. Despite Canada’s efforts, it remains uncertain whether the U.S. will impose tariffs.

>Given the significance of the Canada-U.S. trade relationship, this will be a key factor in Trudeau’s upcoming cabinet shuffle, now expected to occur this month or next, according to Liberal sources. The shuffle has been long overdue. Since September, two cabinet ministers have resigned and their portfolios have been temporarily assigned to other ministers without new appointments. In the last two months, five cabinet ministers have announced they will not run in the next federal election.

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>Political insiders speculate that at least one other cabinet member may also announce in the coming months that they will not run again. Typically, such announcements are co-ordinated with the Prime Minister’s Office (PMO). While Rodriguez made his intentions known in September, the other four formally announced their decisions in mid-October, though these plans were anticipated for weeks or months prior. Boissonnault stepped down last month.

>Meanwhile, Trudeau re-established the Cabinet Committee on Canada-U.S. Relations only a few days after Trump’s election. Deputy Prime Minister and Finance Minister Chrystia Freeland (University-Rosedale, Ont.) chairs the committee, and LeBlanc is the vice-chair. In Trump’s first term, Freeland was the top Canadian official—then-foreign minister—to renegotiate NAFTA.

>Other committee members include Anand, Defence Minister Bill Blair (Scarborough Southwest, Ont.), Industry Minister François-Philippe Champagne (Saint-Maurice-Champlain, Que.), Foreign Affairs Minister Mélanie Joly (Ahuntsic-Cartierville, Que.), Agriculture Minister Lawrence MacAulay (Cardigan, P.E.I.), Immigration Minister Marc Miller (Ville-Marie-Le Sud-Ouest-Île-des-Soeurs, Que.), and International Trade Minister Mary Ng (Markham-Thornhill, Ont.).

>The Privy Council Office told The Hill Times last month that there is no formal Canada-U.S. relations committee at either the deputy minister or assistant deputy minister level. However, senior government officials regularly meet to discuss various topics, including Canada-U.S. relations. The PCO also mentioned that a director-generals committee, established in 2022, continues to bring together multiple departments across the government to co-ordinate and discuss their efforts on Canada-U.S. relations.

>Even though Freeland is the chair of the Canada-U.S. Relations Cabinet Committee, she did not accompany Prime Minister Trudeau to his Nov. 29 meeting with Trump. This has led MPs and political insiders to speculate that LeBlanc may take on a more prominent role as the lead minister in managing Canada-U.S. relations during the president-elect’s second term. The speculation is based in the perception that Trump’s new team is more combative than in his first term, and LeBlanc may be seen as better suited to handle such dynamics.

>During a media availability last week, Freeland declined to explain her absence, suggesting that reporters direct the question to the prime minister. However, she stated that her absence was the “right decision” as the meeting primarily focused on border issues.

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>In the last round of NAFTA negotiations during Trump’s first term, the U.S. side was critical of Freeland, describing her as a “difficult” negotiator. In 2022, Trump’s son-in-law Jared Kushner took shots at Freeland in his book Breaking History, accusing her of deliberately stalling negotiations and “refusing to commit to any substantive changes.” In response, the deputy prime minister described Trump’s negotiation tactics as similar to a “bully.”

>“When you’re threatened by a bully the answer is not to cave in,” she said in November 2022 in answering questions about Kushner’s comments about her in the book. “The answer is to be united, and to stand strong.”

>Wayne Easter, former Liberal MP and chair of the Canada-U.S. relations interparliamentary committee, said that it would have been better if Freeland had gone with Trudeau to the meeting. He said that both the deputy prime minister and LeBlanc will prove to be an asset in dealing with the new Trump administration.

>“There’s some in the Trump circle [who] would like Dominic’s ways to do things, and then there’s some that would like Chrystia’s way of doing things,” said Easter. “So to have both there would would have been ideal, in my view. But Dominic’s kind of a fixture, a fixer in the cabinet. And it makes sense in terms of his portfolio … because the border is certainly going to be the big issue.”

>Meanwhile, Trump’s threatened tariffs are expected to significantly raise the price of goods in the United States, but the government source said that the incoming administration does not appear to be concerned about it.

>An estimated $900-billion of goods and services are exchanged between Canada and the U.S. each year. A July report from the Congressional Research Service revealed that 78 per cent of Canada’s exports were sent to the U.S. in 2023. The report also noted that, as of 2022, the U.S. was the largest source of foreign direct investment in Canada, totalling $438.8-billion, while Canada ranked as the fourth-largest source of such investment in the U.S. at $589.3-billion.

>When Trump took office in 2016, he prompted the renegotiation of NAFTA, which was later renamed CUSMA. With the agreement set for renewal in 2026, significant changes could have major implications for thousands of jobs in both countries.

>Meanwhile, at this week’s meeting, the cabinet committee is expected to discuss Canada’s plans in case Trump goes ahead with tariffs. The committee will also discuss plans to address concerns of the incoming Trump administration and how to prevent fentanyl and other illegal substances from entering Canada and then crossing into the U.S. The Canada-U.S. Cabinet Committee meets every Monday and is expected to meet even through holidays.

Further readings:

https://www.cbc.ca/news/world/trump-canada-fentanyl-organized-crime-1.7404130

https://www.cbc.ca/news/politics/trump-tariffs-threat-canada-interview-1.7404846

https://www.bnnbloomberg.ca/business/2024/12/09/trudeau-now-tied-with-conservative-leader-on-whos-trusted-to-deal-with-trump/

https://www.ctvnews.ca/politics/canada-falling-so-consistently-short-on-defence-spending-has-hurt-standing-on-world-stage-but-improving-u-s-ambassador-1.7137270

https://www.thestar.com/politics/federal/memo-sent-to-justin-trudeau-warns-that-americas-massive-debt-and-deficit-could-cause-problems/article_a4138c2a-b40f-11ef-88ec-4ff358ffdb11.html

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