Annexation fears shake Canadian investments
Canadian prime minister Justin Trudeau warned business leaders at an economic summit on Friday that US president Donald Trump’s comments about annexing Canada should be taken seriously, citing America’s growing interest in Canada’s rich supply of critical minerals. A BNN Bloomberg report noted that Canada is home to nearly three dozen critical minerals essential for mobile phones, electric vehicle batteries, and defense applications.
Speaking at the Canada-US Economic Summit in Toronto, Trudeau told executives and policymakers that Trump’s push for Canada to become the 51st state was “a real thing.” His remarks, initially reported by The Toronto Star, came in a closed-door session.
“They’re very aware of our resources, of what we have, and they very much want to be able to benefit from those,” Trudeau reportedly said. “But Mr. Trump has it in mind that one of the easiest ways of doing that is absorbing our country. And it is a real thing.”
Since his re-election in November, Trump has repeatedly suggested that Canada could avoid US tariffs by joining the country. While Canadian officials initially dismissed the statements as jokes, Trump’s subsequent pledge to use “economic force” to compel a union has raised concerns. He has also called the US-Canada border an “artificially drawn line.”
Trade tensions and political reactions
Trump escalated tensions on Feb. 1 by signing an order imposing 25% tariffs on most goods from Canada and Mexico, disrupting long-standing trade agreements. Trudeau’s government has pledged similar countermeasures, though both countries agreed Monday to delay tariffs for 30 days to allow for negotiations.
“If those tariffs do end up coming in or the investigation into commerce tariffs that is scheduled for April moves forward, we need to be ready to respond robustly,” Trudeau said.
Other Canadian political leaders have also taken Trump’s annexation rhetoric seriously. British Columbia premier David Eby accused Trump of deploying a strategy to “destroy Canada’s economy” and force it into statehood.
Conservative Party leader Pierre Poilievre, who has been critical of Trudeau’s economic policies, dismissed the idea of Canada joining the US. “Canada will never be the 51st state,” he said in a social media video. Poilievre blamed Trudeau for Canada’s economic dependence on the US, accusing his government of blocking resource projects that could have strengthened domestic industry.
Canada seeks to diversify trade
The economic summit highlighted growing concerns over Canada’s reliance on the US market and the need to forge new trade relationships. Executives and industry leaders, including Kingsdale Advisors chair Wes Hall and Linamar Corp. executive chair Linda Hasenfratz, discussed strategies to expand trade beyond North America.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, emphasized the urgency of trade diversification. “It should have happened 20 years ago, but the one thing that nobody in that room downstairs can build is a time machine. So we’re starting right now,” he said.
Volpe acknowledged the challenges of shifting Canada’s export markets but suggested even a modest increase in trade with Europe and Asia could help. “The best business case is always north-south,” he said. However, he noted that shifting 5% to 10% of Canada’s exports to other markets is a way for the country to “get a win out of efforts like this.”
