Oh Canada!

Over the last couple of years I have written several times about the substantial challenges facing Canada.

Here are two examples.

Our Northern Neighbor Heading South?  in February, 2026

What's Next For Canada in May, 2025

The latest example of a misstep by the Liberals who have led the country for the last 11 years is attempting to start a trade war with the United States.

Take a look at Canada's trade numbers and tell me who is going to win any trade war between the two countries.

Source: https://x.com/trish_regan/status/2092429759158301013/photo/1

77% of Canada exports go to the United States.

Those exports represent 22% of Canada's total GDP.

In fact, more goods are exported from Canada to the United States each year than any goods that are transferred among the provinces of Canada.

Canada is also heavily reliant on those in the United States to hold its debt.

Canada has about 

For context, Canada's national federal debt is about $1 trillion.

Beyond all of that, Canada almost totally relies on the United State for its defense.

Canada had neglected spending money on defense for most of the last five decades although it is scheduled to finally spend the NATO required minimum 2% of GDP this year.

Of course, that only came about due to pressure from Trump on Canada and other NATO countries that were getting a free ride from the United States for many, many years.

Prime Minister Carney's actions in treating Trump's trade actions as an attack rather than a negotiation  seems politically calculated rather than being based on sound and rational policy.

Look at the trade numbers above if you don't believe that.

Carney seems to be only interested in playing to the liberal voters who dominate Canadian politics right now and who have a severe case of Trump Derangement Syndrome.

Just 15% of Canadians have a positive approval of Trump.

What is really sad is that the majority in Canada want to blame Donald Trump for their problems when the reality is that they have done this to themselves by following the wrong leaders and the wrong policies.

It helpful to shift blame for Canada's problems and away from him.

Trump understands what Carney is doing as shown in this Truth Social post from yesterday.

Trump also knows that Carney is only going to accelerate Canada's decline.

I get it that the Canadians believe that Trump is threatening their sovereignty.

However, Trump doesn't have it in for Canada or its people.

He is just playing chess rather than checkers.

Trump understands that Canada has gotten the better part of the trade and defense aspects of the U.S-Canada relationship for a number of years.

For example, the U.S.-Canada trade balance got massively unbalanced during the Biden years.

Source: Grok

Trump  came into office in his second term desiring to bring some balance back to the relationship.

He also knows that Canada has been trying to assist China in circumventing Chinese tariffs by putting Chinese content and parts in goods manufactured in Canada.

Trump's request in the negotiations was merely that when a product comes in from Canada and is marked as "Made in Canada" that it really is true.

The U.S. wanted assurances that it was truly made with non-Chinese parts and labor so that the Chinese could not use Canada to circumvent U.S. tariffs on China.

This apparently is what Carney called an "attack". It would seem this would be something Carney should want for his country anyway.

Trump is also looking at Canada and the United States as a business man would rather than a politician.

Looked at from the perspective of a businessman like Trump. if the U.S. and Canada were corporations, they would be ideal candidates for a consolidation or merger.

It needs to be kept in mind that although Canada encompasses a larger geographic area than the United States, its population is only 40 million compared to 335 million in the U.S.

Further, 90% of the Canadian population lives within 100 miles of the U.S. border.

Canada is resource rich but does not have the population, manufacturing and technology infrastructure to take full advantage. Nor do they have the financial resources to maximize its assets.

The Canadian dollar is near 20 year lows in value relative to the U.S. dollar.

A Canadian only provides 72 cents $US at recent exchange rates.

15 years ago the Canadian dollar was trading as high as $1.08

Canadian/US Currency Exchange Rate
Source: https://finance.yahoo.com/quote/CADUSD=X/

The average Canadian has lost over 30% of their purchasing power over that period.

Consider the decline in the real GDP per capita and the standard of living in Canada compared to the United States since 2016.

Credit: https://x.com/WallStreetMav/status/2028326186783236412

The Justin Trudeau administration in Canada was disastrous to the financial well-being of average Canadians.

The Carney administration might end being worse.

In this era where economies of scale are more important than ever, and the cost of government services (especially defense) is growing more expensive every year, there is an argument that combining the United States and Canada would make sound economic sense.

A formal merger or annexation is probably not achievable but an economic union with open trade, a common currency and the ability for Americans and Canadians to travel and work freely by and between the two countries might not be out of the question.

This is clearly where Trump's thinking is leading him.

However, this would necessarily require a common policy on immigration that limits and controls this problem. There would also have to be some type of parity in government benefits.

Canada's current more liberal immigration policies make this impossible.

Almost 25% of Canada's population is foreign born compared to 15% in the United States.

If you include those who are first-generation Canadians (their parents were foreign born) that number is about 45%.

In the City of Toronto, 51% of the population is foreign born.

In Vancouver it is 43%.

No economic union or other consolidation would work unless there is full agreement on the immigration issue.

The media and others may want you to believe that Trump is a madman highlighting the possibilities described above.

However, the facts above show there is sound logic and arguments for everything Trump has talked about.

It is confusing to many because Trump is literally thinking two or three steps beyond where most everybody else is who are captured by conventional thinking and the status quo. 

We can only hope that cooler heads will prevail in all of this.

There is too much history of harmony. goodwill and shared values between the two countries.

All I can say is "Oh Canada!" when I look at all of this.

Do Carney and Canadians fully understand the implications of the fight they seem to want to take on?

This guy on X sums it up pretty well.

What are they thinking?