I’m a Canadian with a lot of fondness for all of you down there.  Last time we had a consequential election, when Trudeau came to power, I posted my (conservative-leaning) take as an “explainer” for Americans.  It got a lot of attention, but my cautious optimism was misplaced; Trudeau was a disaster for this country.  His father was our Obama, but Justin was more like Carter, just kind of stuck in a malaise, too myopic to understand the challenges of his age. We are poorer and more dependent on government than ever; productivity growth since COVID is the worst out of the top fifty – FIFTY – world economies.

Let me try again after another consequential vote, as I process the shock of my neighbours’ sudden decision, after years of griping, to re-elect a flock of left-wing ideologues hiding behind a boring and besuited banker, Mark Carney. The personality is normal: our system tends to prefer the colourless characters of a lower parliamentary house. Your Mitch McConnell and Mike Johnson are closer to our norms of Jean Chretien and Stephen Harper (who?).

But what were we thinking? In Pierre Polievre, we had a smart, slightly nerdy Conservative on offer – not a radical, but at least a proponent of a commonsense revolution. The last Conservative government in Canada ensured the financial crisis barely touched us, left us with low debt, and generally represented us well internationally. We shook our heads when we saw Barack Obama’s radicalism, and wondered if maybe the convention that “Canadians are way left of Americans” had it backwards. The Conservative before him, Brian Mulroney in the 1980s, was more colourful and consequential. He persuaded the country that we would prosper, while remaining strong and free, if we entered into free trade with the United States.

That discussion was two hundred years in the making. The US has invited Canada to join them many times — during your revolution, when we kicked your tails in the War of 1812, after your Civil War, and in the early 1900s, to name a few. American leaders were instrumental in enticing Canada to adjust itself for free trade in the 1980s, abandoning our traditional policy of pursuing trade with Europe and Asia as a government-funded diversification strategy.

We were persuaded because we were offered access to your markets — first in the 1950s as thanks for our participation in Korea, and later as part of the 1988 FTA and 1994 NAFTA. We gave you Arctic access, equal footing in our markets, preferential treatment in our military procurement, and general access to our own sizeable market. Our economy is of course smaller than the US’s, but is not THAT small: for most of our history, we were your largest trading partner. It was a Conservative idea, but the Liberals opposed it before coming on board later.

It worked. Both countries got much wealthier. The only people who disliked it thought (incorrectly) that Canada was the reason the auto sector moved to Tennessee. Ontario got a bit of business from companies fleeing rust belt unions, but not much — our manufacturing growth was earlier and in tandem with the big car companies, offering cheap power, simple taxes, and a good workforce.

For years, if you wanted to pitch a business idea to a Canadian investor or bank, the last sentence was always “…and we think we can eventually enter the US, or sell to a US company.” If that line was credible, the answer was always “Yes, we’ll invest in your US-focused tech.”

That goodwill amongst the monied class in Canada is just a fact of business here, and represents a valuable AMERICAN asset: Canadian money would build tech that Americans would buy, first as products and later as companies, and then they’d move all the talent south: Univar, Alcan, Inco, Seaspan, Mitel, Creo, Traders Group, etc. Canadians disliked the hollowing out of our corporate sector, but accepted that it was ultimately good for us, too.

So it was unpleasant when Trump came in with sudden tariffs. If he’d given us a year’s notice to negotiate some meaningful compromises, we could have lived with it, but companies have to plan ahead, and the costs to us have been devastating.

A case in point. I know a company that has a $6 million theme park in New York and is in the middle of a $2 million construction project there. On a week’s notice, they got hit with $300k of tariffs to move their Ontario equipment in, but had to keep going to meet permitting and legal obligations. The tariffs wiped out most of the company’s profits for the year and caused their investors to permanently kill two more investment projects in the US, each scheduled to bring America around $5 million. All of the company’s investment will now go to second-tier expansion projects in Canada. The existing US satellite will get no more capital investment, despite a previously promising model. That’s why the US markets are cratering: part of these projects were going to be done with US suppliers and banks — that business is now permanently lost to the US, and both sides are poorer.

What Trump doesn’t seem to realize is that the so-called “trade deficit” matched, dollar for dollar, a capital surplus — an investment — from Canada to the US. Always and everywhere, those two things find balance. If they didn’t, the imbalance would have sent the currency either up or down until it reached balance.

Canadians are keenly aware that when we adopted free trade, our leaders had to make that technical case in a sophisticated way to our voters. We were suspicious that the US would suck away all our autonomy. The Conservatives told us not to worry, we’d get rich; the Americans benefit from this too, and will honour their deals; and that changes are only possible with years of notice and planning. The Liberals sounded unduly concerned about a then-reliable trading partner.

Trump’s mercurial trade policies just proved the Liberals right, 40 years later. That’s why they won last night.

So… now we’re stuck with boys in girls’ sports, virtue-signalling leftists, extortionate tax, state-assisted suicide for everyone (even those not sick), and ever-expanding spending and unneeded welfare programs. The election wasn’t exactly about trade, it was about judgment. The pro-American Conservatives looked like Silda Spitzer as she confronted her husband’s betrayal.

And our grey banker seized his moment: Carney promised to hold the course on Trudeau’s familiar social policies (ugh), but would aggressively pursue trade with China and Europe instead of the mercurial customs agents a few miles to our south. The Conservatives didn’t know what to say, but even a Canadian conservative has to agree that sounds like a rational way to hedge our bets. Business-friendly provincial governments have been trying to build oil pipelines and ports east and west, not south to you, for decades.

Is that really what America wants? We were so good together. We went with you to Afghanistan, holding your back there when you were in Iraq (ok, that one was a bit much for us); at your request arrested a Chinese businesswoman, Meng Wenzhou, at great diplomatic cost to us; lots of intelligence sharing; military cooperation in the Arctic; big deals with Boeing; and so much more.

But we have the world’s largest coastline and, like Australia, we can trade all over the world if you don’t want to do it with us. We will have a painful adjustment, but pretty soon there will be no room for us to adjust back.

Even today, if Trump took the tariffs back off, that Canadian investor’s goodwill is gone. He will ask not how my tech invention will end up in the United States, but about what my backup plan is. So, America: How should I answer him?

I know a Chinese guy who will buy it.