Quebec worries about the economy after Trump's election, but Ottawa is reassuring

Photo: Sean Kilpatrick The Canadian Press Deputy Prime Minister and Minister of Finance Chrystia Freeland acknowledged that “many Canadians are worried,” but assured that “Canada will be perfectly fine.”

Sandrine Vieira and François Carabin in Ottawa and Quebec

Published yesterday at 16:12 Updated yesterday at 17:23

• Canada

With Donald Trump’s confirmed victory as president of the United States, the business world is now concerned about the repercussions of his accession to the White House on the Canadian and Quebec economies.

The former president, who will return to power at the end of January, has notably promised to impose tariffs of at least 10% on all imports to the United States — and has sometimes suggested they could reach 20%. During his campaign, he even called the word “tariff” “the most beautiful word in the dictionary.”

“We don’t know if it’s going to be introduced, but it’s a little more of a possibility this morning. If it is, it’s going to be very negative for our economy,” says Catherine Fortin LeFaivre, vice-president of strategic policy and global partnerships at the Canadian Chamber of Commerce (CCC).

Imposing 10 per cent tariffs would shrink the size of the Canadian economy by 0.9 to 1 per cent, resulting in economic costs of about $30 billion per year for the country, according to a CCC report released last month.

Canadian Manufacturers & Exporters vice-president of public affairs Julie White said she hopes Ottawa is “ready to act,” given that manufacturing companies are already suffering from the effects of labour shortages and the impact of the COVID-19 pandemic. “There are already a lot of significant financial pressures on manufacturing companies. If there is an imposition of customs tariffs of up to 10%, it is like another tile that falls on their heads and it makes the business environment in Quebec less conducive to investment and development,” she argues.

Read also

• Customs duties at the heart of future President Trump’s economic recipe
• Justin Trudeau ready to work with both sides
• Quebec anticipates “turbulence” at the borders after Trump’s election

In Ottawa, the Trudeau government and its ministers are trying to be reassuring in the wake of the American election.

Deputy Prime Minister and Minister of Finance Chrystia Freeland acknowledged that “many Canadians are worried,” but assured that “Canada will be perfectly good”.

“Our trade relationship is currently governed by the trade agreement that President Trump himself and his team [the Canada-United States-Mexico Agreement] has reached. That’s extremely important,” she said Wednesday.

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Innovation Minister François-Philippe Champagne also sought to calm concerns about potential tariffs. “Let’s be calm. The [diplomatic] work we have done is paying off,” he assured.

On Wednesday morning, Prime Minister Justin Trudeau simply congratulated the new president, without taking questions from journalists.

Quebec jobs “at stake,” says Legault

Donald Trump’s protectionist ambitions as president of the United States “unfortunately” risk undermining Quebec’s economy, said a worried François Legault on Wednesday.

In his eyes, “jobs are at stake” in four economic sectors: aeronautics, forest products, aluminum and food products.

“Unfortunately, we must expect that there will be actions taken by Mr. Trump and his team that could be negative for the Canadian economy and the Quebec economy,” Mr. Legault said Wednesday.

Photo: Jacques Boissinot The Canadian Press “Jobs are at stake” in Quebec in aeronautics, forest products, aluminum and food products, believes François Legault.

According to his Minister of the Economy, Christine Fréchette, there are indeed “existing risks” for Quebec jobs. However, his colleague at Finance, Eric Girard, does not see only disadvantages in the election of the 47th President of the United States.

“We see that the financial markets appreciate the aspects that concern deregulation, tax cuts… All of that could stimulate economic growth,” he analyzed at the entrance to a session of the Council of Ministers.

Accompanied by Le Devoir on the sidelines of a parliamentary committee on Wednesday, the president and CEO of the Chamber of Commerce of Metropolitan Montreal, Michel Leblanc, for his part raised the risks that economic “uncertainty” generates for Quebec businesses.

“Since this morning, there has been uncertainty. Business does not like uncertainty,” he said. “Our reaction is to say that we need to reactivate all our contacts with American partners.”

“I am telling all businesses in Quebec right now: reactivate your contacts. It is still the Biden administration, the tariffs are not in place. If you have contracts, try to extend them. If you have agreements, try to solidify them,” he added.

To ensure a smooth transition in Quebec-United States relations, François Legault will create a working group made up of several ministers, including those responsible for the economy. He also asked Ottawa to appoint a special emissary who, as Raymond Bachand had done as special advisor on the North American Free Trade Agreement (NAFTA), will defend Quebec's interests in the tariff negotiations.

CUSMA Negotiations

The 2026 review of the Canada-United States-Mexico Agreement (CUSMA) between Ottawa and the Trump administration is also a major concern for the business community.

Around mid-October, Donald Trump promised to reopen the free trade agreement if elected, and to “have a good time.”

“When I take office, I will formally notify Mexico and Canada of my intention to invoke the six-year renegotiation provisions of CUSMA that I put in place,” he assured in a speech to the Detroit Economic Club.

For Catherine Fortin LeFaivre, members of the community Canadian business leaders are now hoping Ottawa will address “irritants” such as defence spending and Canada's digital tax under CUSMA.

“We know that the Americans and the Trump administration are not very happy with our approach. It's time to look at whether we could change our position and whether it will cause us problems when we revise the agreement,” she says.

The CUSMA will expire on June 30, 2036, but a tripartite review of its activities is scheduled to begin on June 30, 2026, six years after it enters into force.