Prime Minister Justin Trudeau, right, and then-Mexican President Enrique Pena Nieto shake hands in November, 2018, after participating in the signing ceremony for the new North American Free Trade Agreement, in Buenos Aires, Argentina.Sean Kilpatrick/The Canadian Press
Nik Nanos is the chief data scientist at Nanos Research, research adjunct professor at the Norman Paterson School for International Affairs at Carleton University, a global fellow at the Woodrow Wilson International Center for Scholars in Washington, and the official pollster for The Globe and Mail and CTV News.
“It’s the economy, stupid.”
That was the 1992 clarion call coined by Democratic presidential strategist James Carville. It carried Bill Clinton to victory over Republican incumbent George H.W. Bush.
It’s just as relevant today.
Whether running against President Joe Biden or Vice-President Kamala Harris, president-elect Donald Trump managed to consistently have the polling advantage on the economy. As the Democrats quoted macroeconomic proof points such as low unemployment rates and good GDP numbers, they slammed up against Mr. Trump’s simple message that the cost of living was up and that taxes should be cut.
The lesson here is one of joyless prosperity. The macro numbers look good. On paper, people should feel better about their personal finances, but faced with sticker shock in the grocery store they are grumpy.
Here in Canada, the federal Liberals are hoping to delay an election long enough for an economic upswing. However, the election south of the border suggests that lower interest rates, lower unemployment and a stronger economy may not be as much of a lifeline as the Liberals might hope.
Voters want to hear solutions about how Canada will build a stronger economy, where good-paying jobs will come from and how people are going to more easily pay for groceries and housing.
Immigration was another flashpoint in the presidential election. Mr. Trump was fully on the offensive, promising the largest deportation in American history. Setting aside the feasibility of his promise, the reality is that just saying he will deport undocumented immigrants will likely have enough of a psychological “chill effect” to reduce the number of people coming into the United States and encourage others to leave the country.
The promise of mass deportations will have a material impact on the binational relationship. Although mostly focused on Mexico, the experience from the first Trump administration suggests that Ottawa should brace for immigrants leaving the U.S. for Canada.
This will compound an already hot political potato for the federal Liberals. After embarking on the most ambitious immigration strategy in generations, the government has been dialling back targets for newcomers. People want to scale back the number of new Canadians, according to a CTV News national survey completed this fall. The issue is more about the pace and volume of immigrants, as people rightly ask: Do we have enough housing, doctors and teachers for the newcomers who have arrived and those yet to come?
Should Canada accept more, about the same or fewer immigrants
Percentage; Surveys conducted in Sept. of 2023 and 2024
ACCEPT MORE
ACCEPT ABOUT
THE SAME
34
26
8%
5
2023
2024
2023
2024
ACCEPT FEWER
UNSURE
64
53
6
5
2023
2024
2023
2024
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
Should Canada accept more, about the same or fewer immigrants
Percentage; Surveys conducted in Sept. of 2023 and 2024
ACCEPT MORE
ACCEPT ABOUT
THE SAME
34
26
8%
5
2023
2024
2023
2024
ACCEPT FEWER
UNSURE
64
53
6
5
2023
2024
2023
2024
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
Should Canada accept more, about the same or fewer immigrants
Percentage; Surveys conducted in Sept. of 2023 and 2024
ACCEPT
MORE
ACCEPT ABOUT
THE SAME
ACCEPT
FEWER
UNSURE
64
53
34
26
8%
6
5
5
2023
2024
2023
2024
2023
2024
2023
2024
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
Even as the Liberals scale back immigration targets, new waves of immigrants leaving the U.S. and entering Canada could be another curveball for a government trying to manage the political fallout of its immigration policies.
The election of Mr. Trump in 2016 will be looked upon as a key turning point in U.S. history. After more than 60 years of America generally being committed to international security and trade institutions, Mr. Trump pivoted to more of an isolationist view of the world.
If, thanks to Mr. Trump’s election, America continues to be more isolationist in its policies, the historic ties of allies and trade partners will take a back seat to weighing how countries fit into America’s economic and national-security supply chains. Regardless of who forms the next Canadian government, there are big issues to deal with.
At the top of the list will be Canadian defence spending. Back in 2014, only the U.S., Britain and Greece met or exceeded NATO’s spending target of 2 per cent of gross domestic product. Fast forward to the present moment, when 23 of 32 NATO allies are expected to hit their defence spending target. Canada only exceeds Belgium, Luxembourg, Slovenia and Spain in defence spending as a proportion of its GDP.
With war in the Middle East, between Ukraine and Russia, and with China looming, Canada’s relevance as a reliable defence and security partner is fading.
Interestingly, those same Canadians who are worried about paying for the groceries and for housing believe that we should meet our NATO defence-spending obligations. This is not an enthusiastic embrace of defence spending but more likely the view that defence investments have been neglected and that we need to catch up. Recent research suggests that Canadians are supportive of defence spending on things such as submarines to help meet our NATO commitments.
Support for Canada buying
submarines to defend coasts and fulfill NATO commitments
Percentage, by demographics
LOCATION
79.6
74.2%
74.3
73.3
72.8
B.C.
Prairies
Ont.
Que.
Atlantic
GENDER
AGE GROUP
83.4
77.5
77.4
75.1
62.8
Men
Women
18 to 34
35 to 54
55 plus
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
Support for Canada buying submarines to defend coasts and fulfill NATO commitments
Percentage, by demographics
LOCATION
79.6
74.2%
74.3
73.3
72.8
B.C.
Prairies
Ont.
Que.
Atlantic
GENDER
AGE GROUP
83.4
77.5
77.4
75.1
62.8
Men
Women
18 to 34
35 to 54
55 plus
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
Support for Canada buying submarines to defend coasts and fulfill NATO commitments
Percentage, by demographics
LOCATION
GENDER
AGE GROUP
83.4
79.6
77.5
77.4
75.1
74.2%
74.3
73.3
72.8
62.8
B.C.
Prairies
Ont.
Que.
Atlantic
Men
Women
18 to 34
35 to 54
55 plus
THE GLOBE AND MAIL, SOURCE: NANOS RESEARCH
More worrisome should be the coming review of the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement. Mr. Trump, during his first term in office, wasted no time in renegotiating NAFTA. Expect Mr. Trump to negotiate an even better trade agreement that favours American jobs. Another Trump presidency, if anything like his first term, will be marked by a strategy of disruption and keeping other countries off balance – the classic Trump negotiating strategy.
Our leverage with the Americans is weak. Today America is more self-sufficient than it ever has been in terms of energy, while at the same time seeking to further in-shore manufacturing and protect key high-tech elements of its economy.
Framed within a political environment in the U.S. that is more isolationist and domestically focused, free trade with Canada and Mexico may fall into the category of “nice to have” rather than “need to have” for the Americans. The exception might be if North American free trade is framed within America’s global economic and national-security strategy targeting China.
In any case, the key lesson from the U.S. election is that, for Americans, it really is the economy, stupid, and that countries such as Mexico and Canada may be the unintended victims of isolationist policies meant to deal with the global competition between the U.S. and China. How Canada navigates these turbulent waters isn’t just a question for the Liberals, but all of Canada’s political parties.