(first published in the Niagara Independent)

Canada’s Prime Minister, Mark Carney, is currently over in China with much fanfare, supposedly looking to promote closer relations between our two countries. There are a number of important issues for Canada on the line, including steep tariffs that China is imposing on several of Canada’s most important agricultural exports and the high tariffs that Canada is levying on Chinese Electric Vehicles (EVs) in concert with the U.S. which is also maintaining steep tariffs on EVs from China. Lots is at stake here for Canada, and much is at risk. 

Supposedly, Carney’s many global trips are geared to finding other countries to trade with that will to some extent replace our trade with our major trading partner, the U.S. The immense and often hysterical hatred of U.S. President Trump by some Canadians has produced considerable partisan advantage for the Carney Liberals, and they certainly don’t want to give up that edge. However, many Canadians seem to be buying into a closer liaison with China without consideration of the full picture. Medium- to long-term decisions should never be made on the basis of one U.S. President’s policies. Canada and the U.S. have had significant periods of disagreement in the past, after which things get resolved and our very positive and productive economic relationship continues. There is no reason to think that will not recur.

Canada’s history with China has varied greatly over the years. Chinese people first started coming to Canada as labourers in the late 1700s and were discriminated against by such terrible policies as the head tax and the Chinese Immigration Act of 1923. During the Korean War, Canadian troops fought against the Chinese from the Peoples’ Republic of China. Canada recognized Taiwan in 1949, which severed diplomatic ties with China at that time. 

Things changed in the 1970s when Pierre Trudeau re-established diplomatic ties with China. Subsequent Canadian governments such as that of Jean Chrétien also endorsed closer trading relationships with China. The Harper government looked to establish trading relationships while being critical of China’s human rights abuses. From 2003 to 2013, Hu Jintao was China’s President, and he attempted to reduce inequality, balance economic growth with social welfare and the environment, seek a peaceful resolution to the Taiwan issue and deal with corruption. During this period, many other countries around the world saw positive change in China and were motivated to attempt to increase their engagement. However, Hu’s successor, Xi Jinping, moved sharply away from Hu’s reforms and instituted a much more authoritarian model. 

Xi has overseen current Chinese practices of unfair dealings in trading relationships, theft of intellectual property and government participation in every major corporation. In Canada, it is well known that Chinese operatives have interfered in a number of elections, have threatened Chinese Canadians and their families who remain in mainland China or Hong Kong, and actually established “police stations” in Canada. China has a habit of dumping (offering a product to another country at a price lower than the cost of production) manufactured products, autos, steel and other items in Canada to gain access to the U.S. market unfairly. This is one of the U.S.’s key issues with Canada, and they are correct that Canada has permitted dumping and not been a good trading partner on this front. 

The fact the Chinese government heavily subsidizes their industries and does not impose the same environmental, labour, human rights restrictions and minimum wages on Chinese workers means that Chinese products can easily out-compete North American-produced items with significantly lower prices. This is not fair trade and the key reason why so many countries around the world are currently questioning their economic relationship with China. 

So, what does this all mean for Canada and why is Carney attempting to cozy up to China? First of all, Canada has a significant trade deficit with China, importing largely manufactured goods while exporting natural resources and agricultural products. Chinese imports have displaced many Canadian manufactured goods, as they compete on an unfair playing field. Overall, only about four per cent of Canada’s exports go to China, while about 12 per cent of our imports come from China. Even with this small percentage of our exports heading to China, they are still our second largest trading partner after the U.S., where 75 to 80 per cent of our exports go. These data show how dishonest it is for Carney to imply that by “doubling” our exports to China or any other minor market, we can make a significant dent in our long-standing and successful trading relationship with the U.S. 

Furthermore, China is a bad actor on the world stage. The country is currently making aggressive moves toward Taiwan, looking to increase its presence in the north and forming partnerships with rogue nations such as Iran which are major supporters of terrorism.  On a number of occasions, Chinese products exported to other countries have been found to have embedded surveillance devices, geared to provide intelligence information or otherwise disadvantage the recipient country. There are many downsides to doing business with China that must be taken into account at all times. 

The federal Liberal party has a long history of seeking closer relationships with China, and many Liberal politicians have benefitted financially from these connections. The Chinese market is huge, and there are potential economic advantages to having access to that market. But the drawbacks are also very worrisome. 

It will be interesting to see what – if anything – comes out of the Carney-China trip. Likely not much other than photo-ops and agreements to keep talking. Achieving lower tariffs on our agricultural goods would be a great outcome. That’s unlikely without major concessions on Canada’s part such as lowering or removing our tariffs on Chinese EVs, which would enrage the U.S. 

At present, the anti-American and anti-Trump sentiments of a considerable number of Canadians is working to the partisan advantage of Carney’s Liberals. They won’t be keen to give that up despite the fact significant damage is being done to our economy, our businesses and our workers by having such a dysfunctional relationship with the US, by far our major trading partner. It seems the Canadian government is currently ignoring the U.S. instead of trying to improve the relationship to set the stage for a successful renegotiation of the USMCA/CUSMA trade deal, scheduled for later this year. That trade deal is essential for Canada’s economic future. Will Carney continue to put Liberal partisan interests ahead of those of average Canadians and the success of our economy? Events in 2026 will probably give us the answer to that question.

Catherine Swift

Catherine Swift is President of the Coalition of Concerned Manufacturers & Businesses of Canada (CCMBC). She was previously President of Working Canadians from 2015-2021 & President & CEO of the Canadian Federation of Independent Business (CFIB) from 1995-2014. She was Chief Economist of the CFIB from 1987-1995, Senior Economist with TD Bank from 1983-1987 & held several positions with the federal government from 1976-1983.

She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.

She has an Honours BA and MA in Economics.