Canada’s federal and provincial leaders recently struck a “Team Canada” working group to defend Canada’s trade-dependent economy against Donald Trump’s threat of massive tariffs. However, Team Canada’s current roster has a troubling track record when it comes to closing trade deals, keeping trade commitments, and avoiding the protectionist schemes that expose Canada to retaliatory sanctions.
For example, notwithstanding its self-proclaimed victory in renegotiating the NAFTA in 2018, Canada’s current government failed to extend the procurement-related non-discrimination rules between Canada and the United States. Under the new NAFTA, Canadian suppliers lost the protections that were previously established in the 1990s under Chapter 10 of the original deal.
Canada also failed to restore trade relations with the United Kingdom after Brexit took the UK out of Canada’s 2017 trade treaty with the European Union. With an interim arrangement expiring, the UK walked away from trade talks in January 2024, serving Canada with another setback at the international trade table.
Canada’s trade credibility is further compromised by its broader backsliding on trade deal commitments. For example, after an August 2019 Canadian International Trade Tribunal determination ruled that the federal government could not unilaterally declare itself exempt from the trade treaties by declaring “national security” exemptions, the federal government passed a statutory amendment that stripped the Tribunal’s oversight powers in those procurements. In a subsequent March 2021 ruling, the Tribunal concluded that this amendment breached Canada’s commitment to upholding international trade rules and enabled improper sole-sourcing through illegitimate uses of the “national security” loophole.
Coupled with the more recent flurry of scathing audits and ongoing parliamentary probes revealing chronic favouritism and conflicts in federal government spending, Team Canada’s captains carry some serious credibility issues into their trade talks with the second Trump administration.
Ontario’s current government has an arguably even worse track record on protectionism and treaty violations. For example, in a June 2022 ruling in Thales DIS Canada Inc. v. Ontario, an Ontario court struck down the province’s driver’s licence and health card procurement after a European bidder successfully challenged the government’s “made-in-Canada” requirements. While a December 2023 decision of the Ontario Court of Appeal reversed this ruling on technicalities over the scope of judicial oversight, and the Supreme Court of Canada refused the European bidder’s appeal in October 2024, the legal void left by the government’s failure to establish clear bid protest rules in Ontario does little to improve its international trade reputation. This case adds to the current government’s broader protectionist schemes. In fact, in March 2022 Ontario enacted the Building Ontario Business Initiative Act, and subsequently ordered Ontario institutions to apply “made-in-Ontario” preferences against bidders from other provinces and countries notwithstanding the clear risk that this treaty violation will provoke retaliatory sanctions.
Western Canada also comes to the trade table with credibility issues. For example, in March 2021 an independent arbiter found that the Saskatchewan government violated the Canadian Free Trade Agreement with a protectionist “community benefits” scheme that improperly imposed local labour requirements on an Alberta bidder and resulted in the unfair award of the disputed highway maintenance contract to a Saskatchewan bidder. The province appealed, but in February 2022 a Saskatchewan court ruled against the government.
British Columbia faced its own legal entanglements over a protectionist “community benefits” scheme that limited bidding opportunities to companies affiliated with specific trade unions, to the exclusion of bidders affiliated with other trade unions and non-unionized bidders. The government took the position that its scheme was not subject to judicial oversight but lost that argument before the BC courts at trial and on appeal. Its subsequent appeal to the Supreme Court of Canada was rejected in April 2021.
Even Alberta comes to the table with trade issues. For example, in a June 2022 report, Alberta’s Auditor General found multiple treaty infractions at Alberta’s infrastructure agency. The audit, which included a four-year sampling from $4.5 billion in construction projects, found rushed bidding deadlines that breached trade treaty competition rules, weak conflict screening safeguards, and lax document management practices for protecting confidential bidder information and maintaining bid evaluation records.
Finally, with Team Canada gearing up for trade talks, a November 2024 federal audit found rampant sole-sourcing and a lack of competition in the Yukon.
These examples reflect a broader pattern of weak leadership in taking trade issues seriously. Barring a miracle on ice, there is little evidence that this version of Team Canada has the roster depth required to properly defend Canadian businesses, Canadian jobs, and the Canadian economy from Trump’s tariff firewall.
