To the Point: For the Week of February 2nd, 2025
To the Point for the Week of February 2nd,
With the threat of tariffs out of the picture, for now, Ontarians now find themselves in a typical election. Freeland attempts to remain relevant against Carney’s astroturfed campaign. The Tories make a couple mistakes. We provide a glimpse into President Trump’s strategic thinking. T
ONTARIO ELECTION 2025
No Tariffs. Now What?
The second week of the Ontario election brought a noticeable shift in tone. With Trump granting a one-month reprieve on tariffs, all three major parties pivoted from tariff discussions to more traditional election issues such as affordability and healthcare. The Progressive Conservatives were the busiest party of the week, kicking things off with a long list of big spending promises aimed at helping workers and businesses weather potential tariffs. Highlights included $300 million to expand the Ontario Made Manufacturing Tax Credit, $600 million for the Invest Ontario Fund, and a permanent cut to the gas tax. Additional commitments included a ban on so-called congestion charges, the elimination of tolls on Highway 407 from Brock Street in Whitby to Highway 35/115 north of Clarington, a "Building GO 2.0" initiative, and plans to construct the world’s largest highway tunnel under the 401. The PCs also secured endorsements from influential unions such as the Ontario Pipe Trades Council and the Ontario Professional Firefighters Association, as well as municipal leaders like Clarington Mayor Adrian Foster and Oshawa Mayor Dan Carter. Premier Ford continued his blitz of U.S. news networks, earning significant unpaid media coverage.
The Liberals, meanwhile, centered their policy announcements on a “Team Canada” tariff response, student loans, disability support, and healthcare. Liberal Leader Bonnie Crombie introduced her Tariff Relief Plan, which includes cutting the small business tax rate to 1.6%, creating a Fight Tariff Fund, investing in “smart stimulus initiatives,” excluding U.S. companies from government procurement, and eliminating interprovincial trade barriers. To appeal to younger voters, the Liberals pledged to eliminate interest on Ontario Student Assistance Program loans and to double and make permanent the Ontario Disability Support Program. The bulk of their efforts, however, focused on healthcare, unveiling a four-point plan to improve access to family doctors. This includes attracting more physicians to Ontario, expanding Ontario Health Teams, and modernizing family medicine.
Marit Stiles and the Ontario NDP also focused their second week on addressing U.S.-imposed tariffs, with policies similar to Crombie’s. Their platform includes a “Buy Ontario” procurement policy, reducing interprovincial trade barriers, and financially supporting vulnerable and hard-hit economic sectors. On education, the NDP promised $830 million to address the school repair backlog, hire additional staff, and launch a universal school lunch program. Their healthcare initiative, the "Family Health Guarantee," closely resembles the Liberals’ proposal to improve access to family doctors.
With the immediate threat of 25% tariffs temporarily off the table, the election has turned into a more conventional contest. The shift has left Ford without a clear justification for calling an early election, though tariffs are likely to resurface as a major issue in less than 30 days. For now, the PCs are capitalizing on the opportunity to dominate policy announcements.
The Liberals, however, have identified healthcare as a potential vulnerability for Ford. Crombie’s X feed has been dominated by healthcare messaging, including criticism of Ford’s failure to deliver on his promise to “end hallway healthcare.” Long wait times for specialists and surgeries, difficulty finding family doctors, and avoidable deaths in emergency rooms are issues that resonate strongly with voters. If reports of a declining NDP vote are accurate, the Liberals’ focus on healthcare could help them win seats in competitive ridings. However, this advantage is tempered by the fact that, as of publication, the Liberals remain the only major party without a full slate of candidates. Barring any unforeseen events, Ford and the PCs remain on track to secure a sizable majority, but the healthcare strategy might be enough to position the Liberals as the official opposition.
FEDERAL LIBERAL PARTY LEADERSHIP RACE
Freeland Fights for Attention. The Tories Make a Critical, but not Fatal Mistake.
Chrystia Freeland worked tirelessly this week to wrest attention away from Mark Carney. She announced endorsements from key Liberal figures past and present, including former Justice Minister Allan Rock and former Foreign Affairs Minister Lloyd Axworthy. She also pledged to reach 2% GDP defense spending by 2027, with promises to increase regular forces by 50%, develop Canadian supply chains, and significantly boost recruitment. Freeland, much like Carney, has focused her campaign energy on addressing Trump’s influence, appearing on CNN, MSNBC, and CNBC to discuss the U.S.-Canada economic relationship and penning an op-ed in The Economist.
Unfortunately for Freeland, her dramatic cabinet exit has failed to distinguish her against Carney’s meteoric rise in Liberal politics. The narrative surrounding Carney has been carefully managed, with the Liberal inner circle—including Trudeau—coordinating his ascent. Carney has admitted to receiving high-level briefings on U.S.-Canada trade talks, a dynamic that strengthens his status as Trudeau’s natural successor. Meanwhile, media scrutiny remains uneven. While CBC’s Rosemary Barton grilled Freeland on how she could position herself as an outsider, Carney’s close ties to elite policymaking and his years in Trudeau’s inner circle have gone largely unexamined. Adding to this dynamic is Carney’s treatment as a “Prime Minister in waiting” by international media, despite having no formal role in government and no parliamentary seat. The narrative has been so meticulously crafted that even the Chinese state is allegedly targeting Freeland with smear campaigns on WeChat, highlighting how high the stakes have become.
Carney’s rise exemplifies the Liberal Party’s strategy of maintaining power by rebranding continuity as change. His campaign, centered on polished soundbites and a controlled image, positions him as the establishment’s best bet to win. Polls suggest Canadians see Carney as the leader best equipped to handle Trump, a narrative that reinforces his legitimacy while sidelining challengers like Freeland. However, the Liberal strategy has not gone unchallenged. The Conservatives’ early missteps in the leadership race, such as overemphasizing the carbon tax during the tariff crisis, allowed the Liberals to capitalize on Trump’s threats to unify Canadians behind their banner. Pierre Poilievre’s insistence on “Axe the Tax” paled against the Liberals’ emotional appeals, which leveraged Canadians’ insecurities about being neighbours to the world’s most powerful nation.
The Tories also miscalculated by failing to seize the leadership vacuum created by Trudeau’s resignation. Instead, that space has been filled by Ford, Trudeau, and Carney. Insiders revealed that Conservative caucus members were instructed to hold back during the tariff crisis, missing a critical opportunity to elevate Pierre Poilievre as a government-in-waiting. While this misstep is not fatal, it reflects a lack of strategic foresight. Now playing catch-up, Poilievre has pivoted, proposing life sentences for fentanyl traffickers and announcing a “Canada First” rally for February 15th. This marks a shift from focusing solely on “Axe the Tax” to articulating a broader vision for Canada. As Carney’s rise tightens the polls, the Conservatives face a critical juncture: recalibrate and inspire voters seeking change or risk being eclipsed by a resurgent Liberal Party.
A Glimpse into President Trump’s Strategic Vision for Trade
Stephen Miran’s insights in A User’s Guide to Restructuring the Global Trading System shed light on the framework of Donald Trump’s approach to trade, financial markets, and security. At its core, Trump’s vision hinges on addressing what he perceives as systemic imbalances caused by the U.S. dollar’s overvaluation as the global reserve currency. According to this view, the dollar’s dominance makes U.S. exports less competitive, hollowing out its manufacturing base and creating trade deficits. Trump’s solution centers on aggressive measures such as significant tariffs—ranging from 20% to 50%—to protect domestic industries and generate revenue while simultaneously pursuing policies to realign currency valuations, either multilaterally or unilaterally. By reducing the trade deficit and repatriating industrial capacity, Trump aims to bolster America’s economic sovereignty.
Historically, such strategies have produced mixed outcomes. The 1985 Plaza Accord is often cited as a success in reducing the dollar's value through multilateral cooperation, boosting U.S. exports. However, unilateral tariff strategies—emblematic of Trump’s presidency—have frequently invited retaliatory tariffs from trading partners, escalating tensions rather than fostering stability. This approach risks inflationary pressures, rising costs for consumers, and strained diplomatic relations. Miran acknowledges these pitfalls, emphasizing the need for balance to avoid adverse global economic impacts. For Canada, this creates a delicate calculus. As a heavily trade-reliant economy deeply integrated with the U.S., Canada’s export-driven industries, particularly in energy, manufacturing, and agriculture, remain vulnerable to American protectionism.
Trump’s strategy also intertwines trade policy with national security considerations, adding another layer of complexity for allies like Canada. By strengthening the U.S. industrial base and reducing reliance on imports from geopolitical competitors, the strategy seeks to enhance America’s defense capabilities. This extends to leveraging U.S. security commitments as negotiating tools—threatening to reduce military cooperation or defense guarantees for countries that resist trade demands or retaliate with tariffs. For Canada, this linkage of trade and security could exacerbate longstanding irritants, such as disputes over defense spending within NATO or bilateral tensions around cross-border trade.
From a Canadian perspective, the resurgence of this economic nationalism poses both economic and political challenges. Trump’s trade policies could disrupt critical supply chains, particularly in the automotive and energy sectors, where Canadian producers rely on tariff-free access to U.S. markets. His willingness to invoke tariffs as leverage—exemplified by past threats to impose duties on Canadian aluminum and steel—underscores the need for Ottawa to diversify trade relationships beyond the U.S. While Canada has made efforts to deepen ties with Europe and the Indo-Pacific through agreements like CETA and CPTPP, these markets cannot fully replace the sheer volume of trade with its southern neighbour.
Politically, Trump’s vision reflects a growing trend of economic populism that resonates with parts of the U.S. electorate—and potentially with Canadians as well. For Canada, this necessitates a more proactive approach to defending its economic interests, including the use of retaliatory measures, stronger lobbying efforts in Washington, and investments in domestic industries to reduce reliance on U.S. markets. Moreover, Canada must carefully navigate its security relationship with the U.S., balancing its commitments to NATO and NORAD with the risk of being drawn into broader geopolitical tensions driven by America’s trade agenda. As Trump’s policies resurface in political discourse, Canada will need to adapt quickly to a more protectionist and transactional economic environment.
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