Evan Saugstad: Oh, Canada! A point of view from a small town guy in rural Canada (part 1 of…or as long as the saga continues)

What do you think of Canada now? Is it time to forgive PM Justin and his Liberal cohorts for the mess they have made of Canada and our economy, time to let bygones be bygones, move on and give him our full support in responding to the U.S.’s desire/threat to annex Canada? And when he goes out the door next month, accord the same to his successor, elected or not?

Or is it time to call that election and move on with a new set of eyes and brains that Canadians can support and will lead Canada back to that prosperous and industrious nation we used to be a few short years ago?

As an aside, do you know of any Canadian who openly advocates that we “Can the Canuck” and switch to “Whistling Dixie for Uncle Sam”?

What do you think of the U.S. these days? Are they still our southern brothers and sisters or are you thinking of them more like how Ukrainians view their neighboring Russians? Or are you still a bit ambivalent and recognize that the U.S. will always be the U.S., and no matter what we think, to them Canada matters naught, never has and likely never will?

Are today’s tariffs and threats of more tariffs just a bigger version of the softwood tariffs that the U.S. imposed on rural Canada years ago with the concurrence by successive governments and presidents who all recognized blaming one’s neighbours (Canada) for their economic failures made for good sound bites and votes?

It’s fairly easy to see why Americans are still enthralled with their new, or as some say, their recycled 2.0 president. Despite all the bravado and spin, President Donald Trump is doing what he said he would and for that, Americans are giving him top marks, so far. But who knows how long it will take for a bit of that bloom to rub off and the full effect of his policies hit home and to varying degrees, negatively affect every American citizen’s life.

So what is Donald up to?

I write from the perspective of a news and political junkie, retired with the spare time to watch, digest and follow this never-ending story during these cold winter days that keep me inside. I am trying to stay neutral and listen/watch/read the news from many sources and perspectives. And from that, I can say there is no unanimous agreement anywhere that what Donald is doing/trying to do will work or be good for his country.

I can agree that his Department of Government Efficiency (DOGE) with Elon Musk is generally a good thing, of which Canada has much to learn. I can also agree that redefining the use of DEI (diversity, equity and inclusion) and reducing a whole host of regulations and government overreach is far past due and a good thing, but that is not what this is about.

This is about Canada and our changing relationship with the U.S.

Is Canada just another real estate transaction that he can direct the might of the U.S. to force a sale/purchase/capitulation, and he only needs to determine what that price may be, or failing that, to determine what hurt he can apply to reduce that price so it eventually becomes agreeable and affordable?

Is Donald just an off-the-wall type of guy who does everything on a whim, or that Mad Max type of person who has a secret agenda that only he knows? Or has he already told us what he wants and all that remains for those in his sights is to learn how he is going to get his way?

My belief, it is the latter.

Donald does have a plan, even if that plan may be subject to daily or on-the-spot revisions. Donald has already told the world his plan:

• For the U.S. to decrease the amount of its income and corporate taxes payable, reduce the size and scale of government (therefore needing less tax money that a smaller government brings).
• To reduce its trade deficit by increasing American manufacturing and productivity (which increases jobs, income and the amount of taxes paid by reducing the number of unemployed).
• To introduce tariffs to offset those loss of taxes in order to help ensure this all happens and without unduly increasing costs to his citizens, with a stick being that tariffs will make/compel companies to move their businesses to and become part of the U.S.

Enough about what Donald and the U.S. is up to, as it has now become time for Canada to focus on what is best for Canada and begin that journey of redefining who we are. It starts with recognizing that the U.S. is an adversary, one that only cares about what is good for themselves and that they do not care about what is in the best interests of Canada. And, if Canada wishes to be successful, only Canadians can define what that requires, which a functioning parliament could help with.

Every nation desires a balance in trade. Yes, selling more than what one buys does make for prosperity, but eventually – as what has happened in the U.S. – having negative trade balances year after year is not sustainable. We cannot argue with that or say it isn’t a valid concern or objective, as we are no different; we both want positive trade balances.

There is a difference between what happens in Canada and the U.S.

When Canada has a negative trade balance, our dollar drops against other world currencies so we as a country try, or should try, to keep that balance close. Justin has been the exception as I believe his view is budgets and deficits balance themselves and that issuing more federal government bonds to pay for our trade and government deficits also increases our debt, which in turn devalues our dollar.

The U.S. is different. Their dollar is regarded as the currency of trade so is less affected by trade imbalances. When the U.S. needs more money, they issue bonds which other countries buy, which then allows them to print more money as those other countries do not wish to sell their bonds and reduce the bond’s value, so around and around it goes (this is a short version and overly simplified).

Depending upon how we view ourselves, our richness in natural resources is both a blessing and a curse. Everyone wants our natural resources, mostly in their raw form so they can remanufacture them into value-added products that employ their citizens and make something they can then sell to other countries, including back to Canada, to help sustain their economies. Try as we might, adding value to our products has been a struggle. Easier to sell our oil, uranium, natural gas, wheat and grains, potash, lumber and pulp (yes, some value added on this one), canola, minerals, fish, lobster, cattle, electricity, hogs, coal and so on, and in return, we buy someone’s else’s refined products with value added. And the more we sell, both in quantity and value, the more likely we are to have that trade imbalance to the U.S.

Problem is, we can sell more raw products for a higher combined value than the value-added products we buy back in return. And therein lies the rub. Donald wishes to see a better balance between Canada and the U.S., irrespective of his desire to own Canada.

And that imbalance is not likely to change anytime soon.

With the low Canada dollar, we struggle to buy what the U.S. makes, with the reverse being true for them. With the exception of Donald, they love our low-value dollar.

So now, with our impulse and reaction to impending tariffs being to buy more Canadian and less U.S. products, what do you think Donald will think if we accomplish that and are not able to reduce what we sell to the U.S. by selling to other countries?

Do you think he will get excited if the imbalance goes up instead of going down?

To be continued…

Evan