FROLITICKS

Satirical commentary on Canadian and American current political issues

What Does Québec’s Minority Government Led by a Separatist Party Mean to Canadian Unity?

First, a little history lesson.  After the British defeated the French in Québec and the colony became part of British North America, the Crown ensured that the rights of the French inhabitants and their language were safeguarded.  Once established as a nation in 1867, Canada went on to ensure that the French language and culture were protected under its constitution.  The federal Official Languages Act was first enacted in 1969.  Substantially revised and more recently modernized, the act gives English and French equal status, rights, and privileges in all institutions of the Parliament and Government of Canada.  In 2006, the House of Commons of Canada adopted a motion recognizing that “Québécois form a nation within a united Canada”.

However, support for sovereignist movements fluctuated through subsequent decades under shifting provincial governments.  Québec’s governments under various parties have always pushed to ensure that French language and culture were promoted under the province’s policies and laws.  Formed in 1968 by René Lévesque, the first truly Québec separatist party is the Parti Québecois (PQ).  At the time the PQ combined multiple sovereignty groups into a major provincial party. They won power in 1976 and made French the sole official language in Québec via the province’s Charter of the French Language (Bill 101) in 1977.

The PQ held Québec’s first referendum in 1980 on “sovereignty-association.”  Voters rejected the proposal by a margin of 60% to 40%.  In 1995, a second more successful referendum on full independence was held under PQ Premier Jacques Parizeau.  The “No” side won by a razor-thin margin of 50.58% to 49.42%.  The federal government had waited to the last minute to finally enter the debate, not wanting to overly interfere in the provincial fray at that time.

Consequently, Canada’s Supreme Court ruled in 1998 that a province cannot secede unilaterally.  Moreover, only a clear majority vote on a clear question would legally oblige the federal and provincial governments to enter into constitutional negotiations.  Parliament then followed in 2000 with the federal Clarity Act which provides that the results of any referendum had to be ‘significant’ with respect to allowing for separation and not basically won by a simple majority.

Québec has always played a very important part within Canada, allowing Canadians to appreciate and support its role throughout the 159 years of the country’s existence as a nation state.  Indeed, since its founding Canada has had four explicit French-Canadian prime ministers.  Other more recent prime ministers such as Brian Mulroney and Justin Trudeau grew up bilingual or had very significant French-Canadian heritage/ties.  However, despite guaranteed Québec representation in the Canadian parliament and other institutions such as the Supreme Court, Québecers have continued to express concerns over the province’s ability to oversee its political, social and economic development.  At times, clearly being a very emotive issue, the question of independence still surfaces.

In early October of this year, following the provincial government’s Coalition Avenir Québec (CAQ) political and economic struggles, the separatist PQ, led by Paul St-Pierre Plamondon, won a mandate to govern.  Of course, this put future independence discussions back into the spotlight.  However, his is a minority government having gotten only 28% of the total popular vote.  There is little doubt that the spectre of Donald Trump hovered over the election, leading to major gains by the two pro-federalist Québec parties, the Liberal and Conservative parties, who together with almost 45% surpassed the PQ’s popular vote.  Interestingly, the CAQ party won no seats after having previously governed as majority governments, once again illustrating Québec’s often quite volatile political environment.

As for the future minority PQ government, St-Pierre Plamondon has stated that a referendum would only take place after the Trump administration is no longer in power.  This is despite the fact that, in recent polling, over 70 percent of Québecers indicated that they don’t want another referendum.  Indications are that, unlike in the 80s and 90s, support for independence has rapidly diminished.  Today, economic and social issues affecting ordinary Québecers have taken on much more urgency.  Any provincial government will have to immediately concern itself with the impact in particular of American tariffs on Québec enterprises which have been negatively affected by the trade war.  For this reason and the apparent lack of enthusiasm for separation among Québec’s younger generation, the initial threat to Canadian unity should prove to be somewhat minimal as compared to past separatist movements.

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Canada Looks To The Arctic As Its Next Frontier

In March 2026 while visiting Yellowknife, in the Northwest Territories, Mark Carney, Prime Minister of Canada, declared that: “After decades of limited and piecemeal investments in the North, Canada’s new government is acting with a scale of ambition worthy of this vast region and its peoples. We are securing every corner of this terrain, unlocking its vast resources, and delivering the strong, connected network of communities that Northerners deserve. In this new era, we cannot rely on other nations for our security and prosperity. We are defending and building together, the true North, strong and free.”

Indeed, the PM disclosed planned government investments in defence, infrastructure, and Northern development to strengthen and secure Canada’s presence in the Arctic and unleash the North’s economic potential.  The announcement is very important and noteworthy as the federal government has been accused in the past of ignoring its Arctic territories and waters.  However, with climate change, all that has changed with the longer season for open Arctic waters in the current shipping lanes.  The defence of Canada’s north has also now been given a much higher priority.  The proposed investments will include:

  • Investing $6.5 billion in a new Arctic Over-the-Horizon Radar system, in partnership with Australia, to enhance early warning and surveillance across Arctic approaches.
  • Investing over $1.3 billion across multiple Northern infrastructure programs – supporting trade corridors, airports, marine safety, and community harbours. 
  • Leveraging more than $1.6 billion from partners to strengthen transportation and marine infrastructure in Arctic and Northern communities.
  • Investing $1 billion through the Arctic Infrastructure Fund for strategic transportation infrastructure for both civilian and military use – to strengthen Canada’s Arctic security and year-round defence readiness.
  • Dedicating approximately $420 million to strengthen the year-round presence and operational capability and capacity of Canadian Armed Forces in the Arctic and the North.

Canada selected German shipbuilder ThyssenKrupp Marine Systems (TKMS) in July 2026, as the preferred supplier to build up to 12 new submarines capable of operating in Artic waters.  This represented the largest military procurement deal in Canadian history.  In addition, new Arctic and offshore patrol ships have been ordered under Canada’s National Shipbuilding Strategy.  Already, the Canadian Coast Guard (CCG) officially welcomed the CCGS Judy LaMarsh as its newest large vessel into active service in September 2026.  With two more ice-capable ships on the horizon, the CCG is set to enhance safety, sovereignty, and ocean research across our waters. 

At this time, the privately owned port of Churchill, located on the shores of Hudson Bay in Northern Manitoba, is Canada’s only deep-water Arctic seaport connected to a surface rail network.  Seen as a possible major project, the government is looking to obtain investment in order to enlarge the port’s capabilities given the increasing shipping of bulk resources during the open-water season from late July to early November.  This would include bulk grain, general cargo, and critical minerals (such as zinc and potash) destined for international markets.  Included in the proposal would be larger exploratory concepts involving potential offshore liquefied natural gas (LNG) terminals, notably of great interest to the Europeans.

Canada also recognized the increasing interest in the Arctic passage, referred to as the Northwest Passage, as a new sea lane connecting the Atlantic and Pacific oceans through the icy channels of the Canadian Arctic Archipelago.  The U.S., Russia and China have especially tested these waters, often without Canada’s blessing.  For this reason, Canada and Norway continue to work together to bolster deterrence and defence in the Arctic.  Obviously, Arctic security is a national security issue for both countries.  In March 2026, Canada and Norway established a bilateral Arctic Dialogue to strengthen cooperation across key areas, including strategic surveillance, situational awareness, interoperability, and research & development. Practical cooperation is also underway through a partnership agreement signed in June 2026 between the Canadian and Norwegian Coast Guards.  Both services have already undertaken joint training exercises in Canadian and Norwegian Arctic waters.

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U.S. and Canada: Will the Elephant Crush the Sleeping Mouse Next to It?

Years ago when I was in college studying economics and political science, I read a book which compared the relationship of the U.S. and Canada to that of an elephant and a mouse quietly sleeping next to each other.  Fortunately, history has shown that for hundreds of years and the longest border between two nations in the world, these two countries have peacefully and beneficially thrived together.  They have been allies in two world wars, Korea, and more recently in Afghanistan.  Economically, both countries for several decades have supported each other by integrating much of the North American market, including those sectors such as energy and manufacturing.  Despite what the Trump administration expounds, Canadian and American consumers alike have benefited from free trade and tourism between both countries.  They also share a common labour force, with Canadians working in the U.S. and Americans working in Canada.  Indeed, several of my university profs were American and greatly welcomed for their expertise and studies in various fields.  Importantly, since World War II and the advent of the Cold War involving the then Soviet Union, both countries have devoted military resources to the North American Aerospace Defense Command (NORAD) founded in 1955.

Now, we are in a trade war with ultimatums by the Trump administration continuously been thrown at Canadian negotiators.  The problem is that a number of U.S. issues raised are direct attacks on the sovereignty of Canada as a nation.  It now unfortunately appears that the position of both governments has become a test of will, with neither side willing to budge at this time.  Certain issues raised touch directly on elements of Canadian culture, and in particular the country’s second official language, French.  Moreover, there is little need to discuss the nature of tariff reciprocity as it is aptly covered by both U.S. and Canadian media.  Indeed, unlike the negotiations in the past dealing with the North American Free Trade Agreement (NAFTA) and the more recent Canada, Mexico and U.S. Agreement (CUSMA), there is much more American coverage of the current trade negotiations then ever before.  If anything, Trump’s heated assertions and accusations have raised the temperature quite a bit.

What now is interesting is that there are some who believe that Prime Minister Mark Carney may be testing whether defiance is a viable strategy against Trump.  This is why a number of other countries are closely paying attention to this trade dispute.  Indeed, as the New York Times recently noted: World leaders and domestic institutions are, in some cases at least, showing less willingness to submit to Mr. Trump’s will. European leaders have refused to join his war with Iran. Prime Minister Benjamin Netanyahu of Israel flatly rejected his Gaza plan. Gulf Arab states forced him to abandon plans to charge a shipping toll in the Strait of Hormuz.  The Times goes on to suggest that while the president remains the most dominant figure in the world, other leaders and institutions are pushing back more vigorously than at the beginning of his second term.  Most notably, Spain, Italy, the U.K.
and Denmark have pushed back against a number of U.S. foreign policy initiatives.

Although the U.S. is obviously the elephant in the room, it might not want to escalate the trade war in light of becoming another inflation-related ingredient for both Americans and Canadians.  It would appear that the president no longer has a problem with the reduction in affordability for Americans and the harm to American businesses that export to Canada.  After all, Canada is still America’s biggest trade partner bar any others.  Insulting Canadians and questioning Canada’s sovereignty is a non-starter!  As shown in the past, Canada has been known to be the mouse that roared, especially when its back is to the wall.  Canadians and Americans have always gotten along despite the rare disagreement, such as over the wars in Vietnam and Iraq.  Travel between the two countries has always been important, given that we have so much in common and a great deal of respect for each other.  Why an American president would want to deal so much hurt on his best neighbour is hard to explain?  Time will tell whether the elephant will still want to choose to crush the mouse.

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Domestic Consequences of Middle East War on Both the U.S. and Canada

It is now over six months since the U.S. and Israel first bombed Iran and began a war which led to the closure of the Strait of Hormuz, stopping the transport of oil and other important products.  Anyone who drives knows one of the primary consequences has been the significant rise in the cost of gas, diesel and petrochemical products in both countries.  Indeed, the continuing high fuel costs has now begun to show up in recent inflation figures.  After all, we all know these additional costs are simply passed on to consumers, be they related to manufacturing, transportation or agriculture.  Indeed, the “affordability” issue is now number one in a long line of economic issues affecting the Trump administration as Republicans ride into the upcoming mid-terms.

In addition, the Iran war has now been expanded throughout the Middle East region, further exasperating the problem of global fossil fuel shortages.  The war is also being carried out by Iran’s proxies, including the Houthis in Yemen and Shiite militias in Iraq.  Very recently, another far longer route to Asia through the Suez Canal and the Mediterranean came under threat as drones hit tankers in Egypt — opening up a whole new front.  Reportedly, Revolutionary Guards commanders have also been deployed by Iran to serve directly on Hezbollah’s leadership council in Lebanon.  As a result of Iran’s proxy attacks throughout the region, many Middle East states have been directly affected including Saudi Arabia, Qatar, Kuwait, Iraq, the United Arab Emirates, Jordon, and even Egypt.  Iran’s bombing of Gulf energy facilities has caused oil prices to spike to their highest level since the war began, making it clear that increased escalation would lead to further economic costs for both the U.S. and Canada.

Most recently there have been cyberattacks on U.S. water systems, initially in Michigan and Minnesota.  Officials and experts have warned that there is evidence the attacks have grown to include at least seven states and may be far wider in scope.  As American authorities race to safeguard the nation’s water supply against such assaults, it is reported that the attacks increasingly appear to be the work of Iranian hackers.  To date, Canada has been spared such attacks on its critical infrastructure.  The use of cyber warfare is extremely alarming given the extent to which critical infrastructure depends on computers and internet connections.  Indeed, in a recent advisory, the U.S. Cybersecurity and Infrastructure Security Agency said the hackers were “targeting water entities of all sizes” and recommended facilities unplug vulnerable controllers from the internet.  The agency has for months been warning the public that Iran may seek to compromise water and wastewater utilities and other critical infrastructure, including government services and facilities and energy sectors.  Such hacking ability means that potentially any facility using vulnerable internet-connected operational systems is at risk.  In addition, such potential attacks means that increased security and remedial measures taken to secure operational systems will prove to be very costly for many public and private organizations.

While both the U.S and Canada are not dependent on oil and gas from the Gulf states, the global nature of the industry means that the higher prices will remain in North America as long as the war continues and the Strait of Hormuz is closed.  Indeed, the consequences of the war will continue to be felt for months ahead and possibly years.  In light of Iran’s attacks on the Gulf states’ energy infrastructures, one cannot just flip a switch and expect pre-war amounts of oil to flow overnight.  For this reason, both Canada and the U.S. will be faced with higher fuel costs for some time to come, especially since domestic oil and gas production is already at their maximum levels.  Despite the fact that both countries are energy independent, global oil and gas production and its markets will continue to directly influence domestic prices and contribute to inflationary pressures. 

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Respective Roles and Governance of U.S. Federal Reserve Bank and the Bank of Canada

The Federal Reserve Bank (the Fed) is the central bank of the United States.  It manages the nation’s money supply and interest rates to achieve maximum employment and stable prices (a “dual mandate”), regulates banks to ensure financial safety, and processes financial transactions for the U.S.government.  The president cannot directly control the Fed, as it operates as an independent central bank designed to be free from short-term political interference.  However, the president does hold several key powers and avenues of influence over the institution.  The president’s formal powers include the ability to nominate the seven members of the Board of Governors, including the Fed’s chair and vice chair.  However, these appointments require Senate confirmation.  The chair and vice chair have only one vote each, as do each of the other governors.  Governors serve 14-year terms, which are intentionally staggered to span across multiple presidential administrations to insulate them from political cycles.  The limitations on the president include the fact that he has no say over the Fed’s interest rate decisions or its monetary policy.  These decisions are made by the Federal Open Market Committee (FOMC), which includes the governors and regional bank presidents.  Also, by law, the president can only remove a Fed governor or the Chair from their position on the board “for cause”.  This generally implies serious misconduct or neglect of duty — not simple disagreements over policy.  Nevertheless, as definitely in the case of Donald Trump, presidents can use public statements, social media, and speeches to critique or pressure the Fed to adjust interest rates, though these actions carry no legal weight. 

Kevin Warsh became the Fed’s current chair, after being confirmed by the narrowest margin in its history.  Nominated by Trump, Warsh was officially sworn in on May 22, 2026, succeeding Jerome Powell.  Warsh has promised “regime change.”  However, under the new chairman, Fed officials voted once again on June 17th to hold interest rates steady for the fourth consecutive meeting, leaving their benchmark lending rate at a range of 3.5% to 3.75%.  This was despite Trump wanting to have interest rates reduced, and the result of another significant monthly increase in inflation.  Instead, according to their latest economic projections, Fed officials hinted at a potential rate hike later this year to combat the latest inflation spike tied to the war with Iran.  Interestingly, during his first post-meeting news conference, Warsh announced task forces in several areas that are central to the broad conduct of monetary policy.

Similar to the Fed, Canada’s central bank is the Bank of Canada (Bank).  Like other central banks around the world, the Bank promotes economic stability and supports the financial well-being of a country and its citizens.  Unlike the Fed leadership, the Bank’s governor (currently Tiff Macklem) and senior deputy governor are appointed by an independent Board of Directors. The Board provides general oversight of the management and administration of the Bank with respect to strategic planning, financial and accounting matters, risk management, human resources, and other internal policies.  The Board is composed of the governor, the senior deputy governor and 12 independent directors appointed to three-year renewable terms by the Governor in Council (the Cabinet).  The Bank sets policy independently within an agreed-upon monetary policy framework, without any direct interference by the government of the day.  However, the Deputy Minister of Finance can participate in Board discussions, but cannot vote on any Board decisions.  The Bank’s Governing Council reaches decisions by consensus and sets the policy interest rate on eight fixed announcement dates each year.  Given the Bank’s independent mandate and governance, the Prime Minister has little or no control over its mandate and composition, and in particular the determination of monetary policy based on current economic data.

Hopefully, given the legislative and independent authority attributed to each central bank, they will continue to carry out their vital operations utilizing economic data provided by independent and expert resources, including those within each country’s financial community and provided by impartial and objective government sources.

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Crossing the Floor in Canada’s Parliament to Join Another Party

In the span of just the last five months in Parliament – November 2025 through April 2026 – five opposition Members (MP) of House of Commons have joined the ruling Liberals.  Their additions to the minority government of Prime Minister Mark Carney provided the Liberals with a majority government following the winning of three more seats in yesterday’s by-elections.  In light of the current geopolitical situation and the tariff policies of the Trump administration, most Canadians appear to agree that a majority government would give Canada more leverage in negotiating a new trade agreement with the U.S.  Crossing of the floor in the U.S. Congress among the two political parties basically never happens.  This is a political phenomenon found mainly in parliamentary governments such as in the U.K., Canada and Australia.

Since four of the five opposition MPs who joined Carney’s caucus since November 2025 were Conservatives, the Conservative leader, Pierre Poilievre, has complained that the Liberals have approached and tried to convince some MPs to cross the floor.  He naturally takes exception with this political move by asserting that members of the Conservative caucus were elected by their constituents as representatives of his party in Parliament.  Some Conservatives have actually suggested that a by-election should be called when an MP joins another party.  Sorry, but Poilievre is crying into spilled milk!  As an old parable goes: “If a shepherd cannot control his flock, then he shouldn’t be a shepherd.”  There are indications that some Conservatives are beginning to question Poilievre’s ability to effectively lead the party into the next federal election in three years time.

Moreover, history shows that floor crossing is one of Canada’s most dramatic political traditions.  Since Confederation in1867, 132 MPs have crossed the floor, with varying degrees of success.  In addition, past floor crossings have occurred involving different parties at the time.  The motivations behind such dramatic political decisions can vary from policy disagreements to personal ambition, such as being appointed to a Cabinet position.  Certain past high profile crossings had even sparked national rage. Today, the media has paid particularly attention given that this most recent wave of Carney-era crossings pushed the Liberal net all time figure to its highest point ever in the history of floor crossings.  It would appear that those MPs deciding to do so did so because of their belief that the current PM is best suited to represent Canada and push forward policies aimed at making the Canadian economy more diverse and less dependent on the U.S.  Polls have also shown that Carney’s popularity is at an all time high, well above that of Poilievre who is his closest rival.

However, when an MP walks across the House of Commons to join a different party, it represents both political calculation and personal conviction, often triggering controversy about democratic representation and voter trust.  Furthermore, statistically the harsh reality of crossing the floor for most MPs who switch parties is that they struggle to win reelection in their new partisan colours.  In addition, as for conservative or other party views on social issues, the PM has made it quite clear that those views will not find their way into any legislation his Liberal government will propose.  Some analysts would even argue that the addition of MPs from other political stripes could be a healthy thing.  In this case, the ruling Liberals will have access in caucus to different perspectives which could influence their decision making.

Now that the Carney-led government has a majority and has the votes, there will be greater expectations with respect to the speedier passage of legislation through Parliament.  Already, there is growing pressure on the government to deal with the most immediate domestic issues such as affordability, economic development and employment, as well as those surrounding trade and national defence.  What’s interesting is that rumours continue to surface as to the possibility of even more Conservative floor crossings, which would indeed be unprecedented!

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Interaction Between the U.S. and Canada Summed Up in One Word: Confusion

When the Trump administration first introduced tariffs against specific industries in Canada (ex. aluminum, steel and lumber), it created a good deal of confusion and uncertainty because of the integrated market existing between the two countries.  The initial excuse was that Canada had failed to secure the border from the smuggling of fentanyl from Canada into the U.S., which only accounted for less than 1 percent of the total entering the States.  Secondly, Trump argues that Canada has long benefited from a trade surplus with the U.S., not accounting for the import to Canada of American services. Then, suddenly Trump was openly promoting the annexation of Canada, making it the 51st state: something neither the vast majority of Canadians or Americans have supported at any time in the past.

As a result of Trump’s tariff imposition, Canadians decided to elect Mark Carney, a Liberal, as the 24th prime minister of Canada in 2025.  Carney, a former head of Canada’s central bank, has had to take a careful and sensitive route in dealing with Trump on both economic and foreign policy issues.  Take for example, the current war initiated by the U.S.with Iran, which the Canadian government was not apprised of before American pre-emptive strikes.  Canadian support for the U.S. is a touchy and complicated matter, remembering that Canada is part of the North American Aerospace Defence Command (NORAD) which conducts aerospace warning, aerospace control and maritime warning in the defence of North America.  As is the U.S., Canada is also a member of North Atlantic Treaty Organization (NATO), and supports its allies in the defence of their sovereignty.  On the one hand, while Carney believes it is appropriate to support the U.S.; on the other hand, there are questions surrounding the legality of the attacks on Iran under international law and NATO’s non-involvement at the outset.  Also, the Trump administration’s primary motive for the attacks on Iran has been anything but clear from the outset, setting off confusion among NATO and other allies.  While NATO will defend itself against the resulting Iranian attacks on their bases in the region, there has been no indication to date that either Israel or the U.S. have sought the support of NATO military forces.  Once again, confusion reigns among the parties.

If any word can also express the current trade and foreign policy environment created by the Trump administration, it is “uncertainty”.  For Carney and other world leaders, this uncertainty has forced them to look at alternative economic, defence and trade arrangements, given the lack of American support for maintaining the normal global processes.  As a result, Carney has to seek alternative trade relations with other countries and has recently entered into formatting new arrangements with middle-power countries such as India, Japan and Australia — not to forget previous trips to several E.U. counties.  Indeed, just this week, Prime Minister Mark Carney and Japan’s Sanae Takaichi inked a new “strategic partnership” that signaled the next step in a recent drive to deepen military and trade co-operation between the two countries.  Just prior to that, Carney and his Indian counterpart announced what they’re calling a “new partnership,” a series of multimillion-dollar deals and a commitment to sign a free trade agreement by year’s end.  On March 4th, Australia and Canada signed new agreements on critical minerals as Carney made a landmark address to the Australian parliament, a sign of the developing bond between the “middle powers”.  The two countries will also deepen cooperation in areas including defence and maritime security, trade and artificial intelligence.

All if this is happening because of the political and economic policies under the Trump administration, which are confusing given that over 70 percent of Canada’s trade has always been with the U.S.  This close relationship with the U.S. has even been highlighted by the current Canada-U.S.-Mexico free trade agreement which Trump had negotiated and endorsed during his first term in office.  Now, it appears that he wants to replace this agreement with separate agreements with Canada and Mexico, which apparently would include new tariffs on their imports to the U.S.on selected products and services.  This has created a good deal of “uncertainty” and “confusion” within North American markets.

Moreover, when it comes to the U.S. policies, once can only foresee more confusion and uncertainty in the near future.  As Trump would no doubt brag, the ball now lies in the American court.

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When Will the High Tech Stock Market Surge Slow Down?

Here are a couple of interesting stats about American high tech companies.  Market concentration has never been greater than in past decades, as the one created by Artificial Intelligence (A.I.).  According to senior index analysts for S&P Dow Jones Indices, Nvidia alone, which makes A.I. chips, makes up more than 8 percent of the S&P 500.  Nvidia is now worth $5 trillion as it continues to consolidate power in A.I. boom.  Apple and Microsoft now top $4 trillion. Those companies combined with Meta, Amazon, Alphabet and Tesla make up more than a third of the entire index.  According to Harvard’s economic faculty, spending on data centers, which are filled with the Nvidia chips, accounted for 92 percent of the country’s gross domestic product (G.D.P.) growth in the first half of 2025.  Chip technology is a powerful technology that can be used to develop advanced weaponry and drive economic opportunity.  Companies like Microsoft and the software company Oracle are pouring hundreds of billions of dollars into building data centers for A.I.

Now the question becomes: “What is the high tech impact on main street versus wall street?”  Most analysts are concerned particularly about the impact of current and future A.I. investments on the labour market for example.  While the current situation continues to produce more millionaires and billionaires, there is already evidence that companies are looking at ways of reducing labour costs through A.I. and A.I. assisted robotics.  For example, it concerns me that Amazon has been aggressively looking to do more with less.  It also concerns me that Amazon recently announced that it was laying off 14,000 corporate employees partly due to its use of A.I.  It is further reported that Amazon spent more than $34 billion on capital expenditures in the third quarter of this year, in large part to set up data centers that power cloud computing and A.I.  It should be noted that the company’s sales totalled $180.2 billion from July through September of 2025, up 13 percent from the same time in 2024.  Profit was $21.2 billion, up a whopping 38 percent.  Furthermore, as an obvious future cost cutting initiative, the New York Times reported that Amazon’s automation team has ambitious goals to use robotics to avoid hiring more than half a million workers by 2033.

Apple’s iPhones are fuelling record sales and profit so far this year, despite raising prices on its latest iPhone and having largely avoided the A.I. arms race.  However, the company still accounts for about 6 percent of the S&P 500 index.  While Apple is not pouring billions of dollars into data centers, developing expensive A.I. systems or building its own chatbot, the company continues to collect payments from Google.  Apple also charges A.I. companies to reach iPhone customers.  Most importantly, instead of bringing its manufacturing home to the U.S., Apple shifted some production from China to India, Vietnam and Thailand.  Almost nothing is made in America, and an estimated 80 percent of iPhones are still made in China.

All said and done, some investors have questioned whether A.I. will actually increase productivity and sales.  This is the trillion dollar question given that the short-term returns have not been all that great in light of the billions of dollars of current investment capital.  Nevertheless, it’s clear that the stock markets are apparently very optimistic.  Only time will tell. 

In addition, there is still the expected negative impact on the labour market as evidenced by recently announced employee cutbacks by several high tech firms using A.I.  A.I., complemented by enhanced robotics, is seen as a tool that could replace people in many jobs, including those in white collar occupations. The jury is still out on this one.  Today, youth unemployment in North American is at its highest rate and recent college graduates in several fields, including in the computer sciences, are experiencing a great deal of difficulty in obtaining employment in their field of study.  Higher unemployment may be one of those areas on main street that would be the result of the potential direct impact of what’s happening on wall street.  Of course, the billionaires would argue otherwise.

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U.S. Is Trying to Milk the Canadian Dairy Industry

As part of the Trump administration’s trade talks with Canada, Trump has once again unfairly attacked Canada’s supply management system in the dairy industry.  The problem is that this continuous American attack doesn’t really make much sense!  Here’s why.

First and foremost, Canada, with a population of about 40 million, is a small market to begin with.  Secondly, while the American dairy and poultry markets are dominated by large industrial farms, the Canadian scene is primarily one of smaller farms, often family managed.  Thirdly, U.S. dairy producers reportedly insist they’re not looking for Canada to dismantle its crucial supply management system.  Fourthly, Canada’s imports of U.S. dairy products have risen significantly since the quotas imposed under the current Canada-U.S.-Mexico Agreement (CUSMA) took effect in 2020.  Those imports totalled $897 million in 2024, according to Statistics Canada data, more than four times the value of imports in any year before 2020.  In 2024, American dairy exports to Canada had increased by 67% since 2021. This made Canada America’s second-largest dairy customer and its largest customer per capita.  Moreover, Canada presently has a $520 million dairy trade deficit with the U.S.  Fifthly, Trump’s claims of a 390 or 400 per cent tariff are false, particularly given the way the quotas on American dairy products actually work under the CUSMA.  Indeed, it is reported that to date, no U.S. dairy products imported by Canada have been subjected to those higher tariffs under the current agreement.  Under CUSMA, the U.S. can send 49 million litres of milk to Canada every year, before a single drop would have a tariff imposed.  In addition, that tariff-free amount is set to continue to grow gradually over the next 13 years.  The U.S. uses the same system of tariff-free imports of certain Canadian products up to a set quantity before imposing its tariffs. Finally, Canada’s maximum allowable dairy exports to the U.S. are lower than those for other countries, including the United Kingdom and Australia, according to the U.S. International Trade Commission’s harmonized tariff schedule.  So, let’s not talk about unfairness when it comes to dairy exports between the two countries.

Furthermore, the president of the Dairy Farmers of Canada, David Wiens, notes that countries such as the United States heavily subsidize their dairy industry for production, forcing taxpayers to pay twice for their milk (once at the store and again through their taxes). In contrast, Canadian dairy farmers do not receive similar production subsidies.

Importantly, supply management has delivered food security and sovereignty to Canada for more than six decades by producing dairy here for Canadians.  It aligns production with demand to deliver high-quality, diverse products at stable prices for Canadian consumers and a fair return for its farmers.  It also strengthens the economy, with about 340,000 Canadian jobs fuelled by the supply-managed dairy, poultry and egg sectors, and over $30 billion contributed to Canada’s gross domestic product.  Simply put, Canada’s rationale for the approach taken under CUSMA is to ensure that the domestic dairy industry thrives by effectively capping how much the U.S. can export each year, preventing cheaper American products from dominating the smaller market.

There are also benefits to having few industrial farms as demonstrated by the recent and ongoing costly toll of the bird flu outbreak on U.S. dairy farms, which in particular drove up the price of eggs in the states, affected dairy cows, decreased milk production and financially decimated many affected farms.  None of this happened to the same extent in Canada.

One chief complaint from the U.S. focuses on Canada’s cheap exports of milk proteins, also described as milk solids, such as skim milk powder.  The Americans argue that because Canada’s supply management system keeps domestic prices artificially high, Canada can sell its excess production of milk proteins internationally at artificially low prices, undercutting the competition.  Such issues can certainly be reasonably discussed as part of any renegotiation of the CUSMA scheduled to be undertaken in 2026.  Remember that Trump actually signed that agreement during his first term as president.  The key point is that one has to do away with sources of misinformation and continue to deal with this particular trade issue in a way that both countries can benefit, thereby profiting farmers on both sides of the border.

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What Does Next Year Have In Store For Canada-U.S. Relations?

Well, if the end of this year is any indication, 2025 is going to be a tough year for Canada-U.S. relations.  Even before he is sworn in as the next president, Donald Trump has alright stirred up a hornets nest with off the cuff statements aimed at Canada.  Firstly, he warns the Canadian government that he intends to impose 25 percent tariffs on Canadian goods if Canada does not reduce the flow of migrants and fentanyl into the U.S.  Such a move of course could be devastating for Canada, whose economy depends heavily on exports to the U.S.which is its largest trading partner.  However, Trump himself has suggested that the tariff plan may have less to do with border security than with his desire to eliminate the $50 billion trade deficit with Canada.  Interesting, given the fact that oil and gas exports from Canada account for most of that trade imbalance.  Without them, the U.S. generally has a trade surplus with Canada.  This would greatly impact the province of Alberta which supplies the U.S. with the bulk of crude oil and represents a safe, cheaper and more accessible source for Americans.  Therefore, the impact on the U.S. could mean higher costs for fuels.

Nevertheless, both federal and provincial governments in Canada hit the panic button.  Prime Minister Justin Trudeau was forced to meet with the provincial premiers to discuss how to positively react to Trump, especially as it pertains to the issue of border security.  By the way, the issue of border security has a lot more to do with the border between Mexico and the U.S. That southern border has been a far worst scenario when it comes to illegal border crossings and drug smuggling.  The subsequent immediate result was the dinner Trudeau had with Trump at Mar-a-Lago over the Thanksgiving weekend, as well as telephone conversations between members of Trudeau’s cabinet and Thomas D. Homan, Trump’s designated border czar.  Next, was a follow-up by two top Canadian ministers, Foreign Minister Mélanie Joly and Finance Minister Dominic LeBlanc.  They met on December 27th with members of Trump’s circle in Florida about a planned 1.3 billion Canadian dollars’ worth of a package of proposed new border security measures.

Whether the Canadian government’s preemptive moves will satisfy Trump is anyone’s guess?  I would suggest that it won’t and he will continue to pursue the matter as part of trade negotiations with Canada once he is in office.  Meanwhile, Trump is clearly aware that Trudeau’s minority government is now politically in trouble.  There is little doubt that the opposition parties intend to introduce a non-confidence vote possibly by the end of January after parliament re-adjourns after the holidays.  This would then result in an election being called early in the New Year, with a predicted majority win by the Conservative Party under Pierre Poilievre.  Whether Trudeau will lead the Liberal Party once more is still up in the air given his current unpopularity among the electorate.

This will place a lot of perceived difficulties for Poilievre’s Conservatives on this and other potential issues in the face of President Trump’s administration.  It may mean that the next Canadian government will spend a good deal of its time simply reacting and responding to Trump’s demands.  The United States-Mexico-Canada Agreement (USMCA), signed in 2018 during Trump’s first term, is up for review in 2026.  Should a Trump administration take a hard-line stance requesting fewer restrictions on American exports to Canada, it could lead to a trade war with the U.S.  Such an outcome will no doubt further damage our relations, and would lead to higher product costs for consumers in both countries.  Due to our size, Canada has to be an export-import country in order to grow and thrive economically.

What makes the future that much more unclear are the irrational and uninformed outbursts of one Donald Trump.  How the next Canadian government will react to his social media musings will be very interesting?  For Canadians, there is little doubt that these will be trying times.  Stay tuned for more of the Donald Trump saga!

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