O'Toole says Canada-U.S. relations have never been worse

Conservative Leader Erin O'Toole said today the Canada-U.S. relationship is at its lowest point in decades — a development that threatens to stall Canada's growth and derail some sectors of the economy.

Speaking at a virtual event with Nova Scotia chambers of commerce, O'Toole said Prime Minister Justin Trudeau has done little to stop the U.S. from pursuing punitive policies. O'Toole pointed to a list of grievances, including recent hikes to softwood lumber tariffs and an ongoing dispute over P.E.I. potatoes.

In November, the U.S. Department of Commerce doubled the amount of duty it imposes on softwood lumber coming from Canada — a significant escalation in the years-long fight over this issue. Washington claims Canadian producers dump their product in the U.S. at subsidized prices, undercutting their American counterparts.

Last month, facing threats from the U.S., Canada voluntarily halted fresh potato exports from P.E.I. after a wart fungus was discovered at two of the province's farms.

And just last week, the U.S. Trade Representative's office claimed victory when Canada lost a fight over trade quotas for dairy products before a Canada-U.S.-Mexico Agreement (CUSMA) dispute panel.

Those trade losses follow U.S. President Joe Biden's earlier decision to cancel permits for the Keystone XL pipeline — a multi-billion dollar blow to Alberta's oilpatch. The Biden administration also has done little to stop Michigan Gov. Gretchen Whitmer, a Democrat, from trying to shut down Enbridge's Line 5 pipeline — a crucial artery that supplies oil products and natural gas to power huge portions of the Canadian economy.

"We have never seen, in modern Canadian history, Canada-U.S. relations at such a low point. We just lost a recent trade battle with respect to supply management — we've been losing on agriculture. We're losing on forestry products. There's been steel and aluminum tariffs and Buy America that has us losing on manufacturing," O'Toole said, pointing to a U.S. government policy to shift government procurement to American firms.

O'Toole said snarled Canada-U.S. supply chains also have resulted in higher consumer prices at home.

"Since the 1960s, Canada has had an integrated supply chain, particularly in manufacturing, with the U.S. and we should be restoring that relationship and making sure supply chain shortages — whether it's microchips or food — are solved on a Canada-U.S. basis," he said. "That would start easing off the pressure we're seeing with inflation."

While lamenting the state of bilateral relations, O'Toole cheered the apparent defeat of Biden's signature piece of domestic legislation, the Build Back Better Act.

That $1.9 trillion bill included a sizeable tax credit worth up to $12,500 US to buyers of new electric vehicles (EVs) — as long as those cars are manufactured by union workers in the United States. That credit had the potential to devastate the Canadian auto sector.

"Thankfully, the Build Back Better plan was held back by one U.S. senator," O'Toole said, referring to U.S. Senator Joe Manchin, a Democrat from West Virginia. "Mr. Biden's plan would have unfairly assisted electric vehicle manufacturing in the United States."

Before Manchin said he'd vote against the bill and the tax credits — the U.S. Senate is evenly split between Democrats and Republicans and his support was central to the bill's passage — the Canadian government vowed to take strong retaliatory action.

In a statement to CBC News, a spokesperson for International Trade Minister Mary Ng said the government "will take no lessons from Conservatives when it comes to defending Canadians interests."