No Map, No Compass, No Captain

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HERE'S MY TAKE

It’s only one week into 2025, but Prime Minister Trudeau's Monday announcement about his intention to resign already seems old. Tuesday was marked by President-elect Trump’s musings that he might consider using “economic force” to annex Canada (along with potential military force to gain control of Greenland and the Panama Canal). The rest of the week was speculation about what this all might mean, and the news network talking-head panels were working double overtime.

Almost everyone agrees that we are heading into a storm.

That doesn’t mean we should let the threatening skies cloud our assessment of what has really changed. In fact, only two matters of legal consequence occurred this week.

First, Parliament won’t resume sitting on January 27. Instead, the Governor General accepted the advice of the prime minister to prorogue Parliament so that its next session will be on March 24. Apart from the change of date, this decision has two very consequential implications. The first is that 26 bills the government had before Parliament all died (along with whatever committee work, private member's business, etc. was unfinished). The second is that the end of the government’s fiscal year is March 31. If Parliament does not pass a motion authorizing the government to spend money before that date, the government effectively runs out of money as of April 1. (There are many technicalities for policy process nerds to geek out on, but that’s the layman’s explanation.) This motion would be considered a “confidence motion,” meaning that if the three opposition parties voted against the government, as they have said they would, the government will fall in the last week of March, leading to a May election. (There are election-time rules that would come into place if we have an election before a supply motion passes.)  It should be noted that not everyone (including members of his own caucus) is convinced that NDP leader Jagmeet Singh has ruled out a deal to extend the life of this Parliament, though he seems to be sticking to his guns for now.

The second legal consequence is that the prime minister has started the process for the Liberal Party to elect a new leader. That process will culminate on March 9. Given the amount of confused public commentary, at the risk of providing a redundant Canadian Civics 101, let me emphasize what this does and does not mean.

In Canada, the executive branch of government is carried out in the name of the monarch, who follows the advice of his first minister. (Incidentally, this is why it would have been a “nuclear constitutional option” for the Governor General not to follow the advice of her first minister. While the Justice Centre for Constitutional Freedoms filed a legal challenge seeking to overturn the prorogation decision, primarily based on a 2019 U.K. court decision dealing with prorogation, few seem to think this appeal has legal legs.) Prorogation suspends for a time the operations of the legislative branch of government (so no new laws can be passed) but the executive and judicial branches continue unaffected. Prime Minister Trudeau has every legal authority of his office today, just as much as he did last week. This includes his authority to negotiate internationally. Presumably he will next visit the Governor General after March 9th and offer his resignation.  At that time, it is up to the Governor General to invite someone else to become the first minister and form a government.

Of course, the legality of things doesn’t capture the entire essence of the matter. The reality of a prime minister having announced his plans to resign is that those with whom he has dealings consider his mandate in light of his expected departure. Either you try to get things resolved before he leaves or you don’t seriously address matters until his successor is in place. What we have today is a government with all of the legal authority it ordinarily has, but is in a weak negotiating position since everyone knows it has a limited life span with polling suggesting it is likely to be replaced.

This is what makes this week’s events so consequential. U.S. President Trump has promised to implement a 25% tariff on Canadian imports to his country on “day one” of his presidency (January 20), something that all agree would have devastating economic implications for Canada. The challenge of having a united Canadian response to mitigate against this threat is compromised by a prime minister who is seen as a lame duck. (To his credit, Finance Minister Domenic LeBlanc’s decision to focus on the tariff issue instead of running for the Liberal leadership is commendable and helpful). The premiers and prime minister will meet in person on Wednesday to coordinate a Canadian response and, reportedly, respond to the U.S. “economic force” with an economic counter-attack.

There isn’t much point speculating on how this will unfold. All that this week confirmed is that a process to replace the Canadian prime minister is formally underway and that in the months that this will take, we will have to navigate a sea of uncertainty collectively. At a time when it would be ideal to have a skilled leader at the helm, the Canadian ship of state needs to sail without a functioning compass. So, let me conclude by just pointing out several consequential rocks that we’ll need to avoid as we seek calmer waters.

First, public life always involves a mix of obligations and loyalties. The Globe and Mail was one of many outlets critical of the timing of Mr. Trudeau’s decisions this week, concluding that they put the good of the Liberal Party ahead of the good of the country. Ironically, it was Mr. Trump’s Tuesday musings about annexing Canada which seemed to coalesce Canadian patriotism, ranging from a simple annoyance with Trump’s repeated tweets about Canada as a 51st state to a united resistance. All of the federal party leaders, including Justin Trudeau, Pierre Poilievre, Jagmeet Singh, Elizabeth May, and Maxime Bernier – responded swiftly and firmly to Trump’s claims. But the bravado of social media posts doesn’t undercut the challenge of maintaining a united voice. So far, the interests of Canada have been well-represented by Premiers Ford, Smith, and Legault, even though the specifics of how tariffs might hurt their provinces vary significantly.

Second, while we cannot know Mr. Trump’s motives with certainty, we do know that his focus is primarily on economics. Success for Trump is “winning the deal,” quite a different metric than statecraft by which we ordinarily evaluate political success. I have principled objections (government is not just about economics) but let’s grant Trump his frame for practical purposes. As noted in Meaningful Metrics below, there is a “method in Trump’s Greenland madness.” Climate change is creating more viable Arctic trade routes even as global politics challenge existing ones. In addition to the rich resources in the north, the U.S. is understandably concerned about Moscow and Beijing taking control of emerging northern trade routes and isn’t confident in either Greenland/Denmark or Canada appropriately asserting their sovereignty in these matters. In addition to whatever mix of border security and bringing home manufacturing jobs may be motivating the U.S., there are real and legitimate trade considerations at work here. Both the U.S. annexation and the Chinese overtures for closer trade ties need to be understood in the context of the global economic storms that are being waged.

Third, these events magnify the challenges that exist within Canadian political processes. We have a Westminster Parliamentary system, which is why proroguing was legal, and it would be problematic for the Crown not to follow the advice of the first minister. At the same time, we have taken the power away from Parliamentary caucuses so that they cannot remove their leader, which is part of the timing of this crisis as the prime minister resisted the concerns of his caucus for the past 18 months, though the intensity really picked up in the last six. The American-style one-member, one-vote system of electing party leaders but then relying on the Westminster model of confidence, which is caucus-based, mixes two systems and produces flaws, such as we see today. We can add in at least two more challenges:

• Our political financing system, which caps individuals’ annual political donations, makes it very difficult for the Liberals to fund both a leadership campaign and an election campaign in the same year
• The openness of our political parties to foreign interference which is true of all parties, but especially the Liberals.

I expect more systemic challenges will be exposed in the upcoming months.

This newsletter provides observation, not prediction. On the one hand, there have been fewer changes this week than many seem to think. On the other hand, the storm clouds that previously were predicted are now hovering so close that those on the Canadian ship can practically feel the coming torrent, though the rain hasn’t quite started yet. It won’t be fun to be on the S.S. Minnow as the weather gets rough. Everyone wants a sure hand at the helm to steer us through the waves and avoid the hazardous rocks. That may be coming, but for now, Canada is a ship in stormy waters with no map or compass, with those on board focused on figuring out who will next become captain.

WHAT I’M READING

Redefining Sovereignty

This week’s musings about national boundaries prompted me to look up a famous speech by Vladimir Putin from a few years back in which he attempted to redefine sovereignty. This Washington Post summary has its own critical bias but is helpful in uncovering some of the issues that underlie both present and potential global conflicts.

University Diversity

Christopher Dummitt’s speech to the MacDonald Laurier Institute helpfully documents the significance of universities incorporating increased viewpoint diversity to maintain their social credibility and relevance.

Supply Chain Strategy

This C.D. Howe Institute op-ed was published over the holidays, before this week's events, but it highlighted the multidimensional features of an effective supply chain strategy, which should be proactively pursued for the best results.

MEANINGFUL METRICS

Trading for Greenland

It’s not every day Greenland is headline news. It’s officially a Danish territory although is functionally independent. Ninety percent or so of its 60,000 citizens have indigenous ancestry. It’s also semi-connected to the E.U. and NATO through Denmark’s membership in those organizations. It boasts plenty of strategic mineral assets. Mostly, though, it’s an island that minds its own business and relies on others for its security. It sounds cold, notwithstanding the reality that global warming is shrinking the size of its ice sheet and that in its far north “the air is too dry to produce snow.”

Officially, Donald Trump Jr.’s visit this week was as a private citizen. However, given his father’s musings about Greenland being critical to American security—which caused global nervousness—I suspect I wasn’t the only one quickly reading up on Greenland. I found Politico’s explanation of “The method in Trump’s Greenland madness” helpful, pointing out how China and Russia have been ahead of Western nations in anticipating the potential for year-round access to the Arctic for shipping purposes.

TAKE IT TO-GO

37,000 Shakers

A social media friend used the holiday season to visit the Salt and Pepper Museum although I didn’t need a seasonal excuse to indulge in seasoning puns. I don’t intend to assault you with an overabundance but given that I try to be a punster worth his salt, I will pepper this paragraph with a few and trust that if there is more than you prefer, you can just shake it off. TripAdvisor ranks the Museum 4.6 out of 5, and I have no reason to doubt the accolades for the staff’s friendliness. Still, I don’t have the zest to inspect 37,000 shakers. That prospect seems bland and tempts me to revert to saltier puns or a dash of sass. That’s probably not wise so I will leave it at that, hopefully having avoided pouring any salt on pun-sensitive wounds.

Insights is scheduled again for next Saturday morning. In the meantime, I hope you have a great week.