CAN-USA Tariff Strife (split from various pol threads)

[Czech_pivo]

We don't "let" others add that value. We just don't compete effectively. If someone else is going to buy our raw materials and turn out finished products cheaper than we will, someone else is likely to end up with the contracts.

Whether Canadians can compete effectively and efficiently depends on personal expectations, and how the governments regulate enterprises.

Reading and watching commentary across the years, it is clear that too many people spend too much time wondering why someone just doesn't "do something". Do they even understand the rules of engagement? If they understand, are they prepared to make changes that will make Canadian enterprises more competitive? I can guess that the answer to almost every proposal will be "oh, we can't change that".

Sadly alot of it centers around the fact that there are too few Canadian 'Champions' left across many industries. Selling out the the US and others has been the 'cultural norm' for the last 7 decades.

 

[Brad Sallows]

Meanwhile we spend 30b a year on subsidies to oil and gas and its fine.

Cannot take the claim seriously when the people advancing it only occasionally admit that figure is a sum of subsidies, loans and guarantees, and tax breaks, without anyone making it easy to find the true subsidy amount all by itself.

It is deceitful to bundle up several things in a package and then describe the package as if it were composed of exactly one of the things.

 

[Brad Sallows]

Sadly alot of it centers around the fact that there are too few Canadian 'Champions' left across many industries. Selling out the the US and others has been the 'cultural norm' for the last 7 decades.

I repeatedly return to that point: Canada is next to the US and is going to have to figure out a way to compete with the US if it doesn't want to bleed people and ideas to the US (a problem faced by most countries around the globe, but most don't share a language and substantial part of their cultures).

We cannot force the US to become more like us. That leaves figuring out which ways we can become more like the US, and there will not be much agreement on those. "I'm alright, FY Jack" isn't just a sentiment applied by the well-off. The same frame is often enough the attitude of people with very secure employment and/or governmental sources of income to those without either. It even bubbles up to regional politics (eg. BC deciding which limits it effectively imposes on other provinces' attempts to reach export markets).

 

[Altair]

Cannot take the claim seriously when the people advancing it only occasionally admit that figure is a sum of subsidies, loans and guarantees, and tax breaks, without anyone making it easy to find the true subsidy amount all by itself.

It is deceitful to bundle up several things in a package and then describe the package as if it were composed of exactly one of the things.

It's a pretty simple thing to do actually.

I call it the bombardier test. If the government did it for bombardier,would people complain?

Low interest loans? Yup

Tax breaks? Yup

Direct financing? Definitely yes.

So what's good for the goose...

It's oil and gas subsidies, 30b worth this year alone.

 

[Brad Sallows]

It's a pretty simple thing to do actually.

I call it the bombardier test. If the government did it for bombardier,would people complain?

Low interest loans? Yup

Tax breaks? Yup

Direct financing? Definitely yes.

So what's good for the goose...

You can call it what you want, but it's an historical fact that various groups opposed to one thing or another protest government backing - aerospace, oil&gas, automotive, mining, etc. O&G isn't some kind of special thing, although if you haven't read or seen any people protesting the other things, you would be unaware of it.

It's oil and gas subsidies, 30b worth this year alone.

Again, there is no breakdown and you have effectively doubled down on misinformation (or I suppose it must be disinformation if you have intent to create a mistaken impression). The $30B amount that is repeatedly regurgitated in articles all over the web contains several elements, which you persist in characterizing as "subsidies". What is the impediment to doing the research to make an accurate claim? Do you fear the actual subsidies won't be large enough to make the impression you would like to make?

This is basically the same kind of play made by some people who objected to the first IMPP (Insured Mortgage Purchase Program). They characterized the IMPP as a "bailout", sometimes by itself alone (in which case they were egregiously wrong), or sometimes by bundling it in with other things that looked more like outright transfers. I don't care whether they were ignorant or dishonest; it simply wasn't the case. In the case of the IMPP, the federal government expected (and did make) a profit.

Government loans might make a profit. Loan guarantees might never be triggered. Tax breaks are often deliberate policy intended to shape behaviour. Subsidies are gifts.

There's a particular case for subsidies (as with tariffs) as counter-measures to other countries' economic protectionism. I have no idea whether that's the case, or to what degree. I can guess, though, that the federal government in particular doesn't want Canada's O&G to flatline, and that therefore some of its policy might not just be transferring federal revenues to fatcats.

Governments provide tax breaks, loans, loan guarantees, and outright gifts to many industries and agencies and political groups. They are all different things, and people should avoid indulging in association fallacies by presenting the worst of the group as representative of the whole.

 

[Altair]

You can call it what you want,

Thanks, bye.

 

[Czech_pivo]

I repeatedly return to that point: Canada is next to the US and is going to have to figure out a way to compete with the US if it doesn't want to bleed people and ideas to the US (a problem faced by most countries around the globe, but most don't share a language and substantial part of their cultures).

We cannot force the US to become more like us. That leaves figuring out which ways we can become more like the US, and there will not be much agreement on those. "I'm alright, FY Jack" isn't just a sentiment applied by the well-off. The same frame is often enough the attitude of people with very secure employment and/or governmental sources of income to those without either. It even bubbles up to regional politics (eg. BC deciding which limits it effectively imposes on other provinces' attempts to reach export markets).

Look to the Dutch - German relationship, or, another similar relationship - Ireland - UK.

The 'underdogs' are the Dutch and the Irish. Both have alot in common with our situation with the US. But, unlike us, both have managed to keep their larger neighbour at arms length (though in the past that was not the case, with invasion/occupation/liberation occurring to the underdog), economically and both have a number of national champions, with the Dutch having substantially more, that are recognised around the world. There are many, many cultural similarities between the Irish/Brits and the Dutch/Germans, with distinct differences in some areas.

We need to pick the parts in both sets of countries examples that will work for us, find/create the pieces that are still missing and move forward on our own as much as possible.

For example:
- the Dutch rely on Germany to absorb 17-24% of their exports and the Dutch in turn import about 18% of their total trade from Germany.

With the Dutch having the smaller population, their absorbing close to 1/5 of all German exports speaks to an overall greater dependance​

​

- the Irish rely on the UK to absorb about 12% of their exports and the Irish in turn import about 20% of their total trade from the UK


Here in Canada, in 2024 relied on the US to take 76% of our exports and the US in return relied on us to absorb 15% of their exports.

In terms of populations:

• The Netherlands has 18m to Germanys 84m - a ratio of 4.5 Germans to every Dutchman
• Ireland has 5.5m to the UK's 70m - a ratio of 13 Brits to every Irishman
• Canada has 41.5m to the US's 344m - a ratio of 8.5 Americans to every Canadian

 

[lenaitch]

Remember how much the public moaned a groaned when homegrown bombardier needed help? Canadians were not interested and they sold off everything but the business jet division. We still build jets, but under the umbrella of airbus.

To be fair, BBD was being run like a family cartel and made no bones of it being in the pocket of government, regardless of the quality of the product. Toronto ordered 204 streetcars, and I think 204 had to go back for major repairs.

We tried building cars in the Maritimes (Bricklin and Volvo). When Three Buoys houseboats hit the market back in the '70s or '80s, I remember seeing a long train of boats on flatcars with the caption that they were the first manufactured product to be shipped from the west to the east in, like, forever. Is private industry willing to spread manufacturing into the boonies? If not, why not? If the only way they will do that is with government money, is it sustainable once it gets the public money kickstart, or will they do like so many others are take their ball and move to the US? The government has to know that a good percentage of the population will hate them for doing it.

The US likes to tell the tale that they run a free market economy, but they massively subsidize sectors of their economy. I guess when you have 10x the population in roughly the same landmass, regional economies are more sustainable. It seems nobody sees a problem with the supply chain for their F-35 being spread to so many congressional districts that it became virtually impossible to fail.

 

[dapaterson]

It seems nobody sees a problem with the supply chain for their F-35 being spread to so many congressional districts that it became virtually impossible to fail.

It's impossible to kill. It has failed multiple times in multiple ways and costs more than it should because the USMC has a disproportionate influence on US defense procurement.

 

[Altair]

To be fair, BBD was being run like a family cartel and made no bones of it being in the pocket of government, regardless of the quality of the product. Toronto ordered 204 streetcars, and I think 204 had to go back for major repairs.

Rogers is run like a family cartel. So is Saputo. So is Irving. So is McCain. It's just how we tend to do things.

We tried building cars in the Maritimes (Bricklin and Volvo). When Three Buoys houseboats hit the market back in the '70s or '80s, I remember seeing a long train of boats on flatcars with the caption that they were the first manufactured product to be shipped from the west to the east in, like, forever. Is private industry willing to spread manufacturing into the boonies?

No, probably not.

If not, why not?

Access to raw materials, access to logistics hubs, access to parts and widgets.

If the only way they will do that is with government money, is it sustainable once it gets the public money kickstart,

No

or will they do like so many others are take their ball and move to the US?

If the subsidies dry up, certainly.

The government has to know that a good percentage of the population will hate them for doing it.

Yes, it always falls back on the government, and to be fair, it's part of the game. When a company puts down stakes due to public funds, you will see a minister, federal or provincial, usually both, plus local MPs and MPPs there for the ribbon cutting. Wont see them there for the shutdown of course.

But at the end of the day, people pump money into the US market like nobody else. capital is not free but it is certainly free flowing. If Canada drops subsidies, the allure of that money is far too attractive to most big manufactures. That's just capitalism. The TSX cannot compete with the DOW, NASDAQ and the S&P. And to be fair, it doesn't try. The blue chips of the TSX are companies that don't need to compete internationally.

The US likes to tell the tale that they run a free market economy, but they massively subsidize sectors of their economy.

Look at how much the USA subsidies their agriculture. And they have the nerve to talk to us about supply management. The reason they have so much extra agricultural goods they need to offload is because of how much federal money is flowing to farmers. And that's just one aspect of their economy. They pump money into the automakers, they load aircraft manufactures with defense funds (which we are only starting to do with globaleye) and they subsidies their oil and gas sector as well.

The US tries to dress itself up as cowboy capitalism, a free market paradise, but look under the hood even just a little bit and you find how they tip the scales in their favour market after market.

I guess when you have 10x the population in roughly the same landmass, regional economies are more sustainable. It seems nobody sees a problem with the supply chain for their F-35 being spread to so many congressional districts that it became virtually impossible to fail.

If lockheed martin was untethered from the government, you would see them consolidate around a major hub. But the inefficiencies in the F35 production insulate it from ever being shut down. The USA can afford that, especially for military kit. Canada cannot. We nickle and dime everything that is not healthcare.

 

[Czech_pivo]

Didn’t thy make Lada’s in Cape Breton before?