Canada – the 51st State?

December 6, 2025

The United States and Canada have long been among the closest allies and trading partners in the world, with bilateral trade exceeding $900 billion annually and deeply integrated supply chains that have benefited both nations. In 2025, however, that relationship has entered a period of significant tension, marked by U.S. tariffs, temporary Canadian retaliation (now mostly lifted), and a series of high-profile factory closures and layoffs in Canada.

The Trump administration's tariff measures—beginning with 25% duties on most Canadian goods (10% on energy) in February 2025—have been portrayed in some Canadian circles as aggressive unilateralism. In practice, they represent a principled and long-overdue effort to address genuine imbalances in trade, emerging border-security gaps, and the broader economic distortions created by divergent policy choices. While no one disputes that tariffs impose real short-term costs on both sides of the border, the underlying U.S. position is fundamentally sound: decades of asymmetric arrangements can no longer be sustained when they disadvantage American workers, farmers, and national security.

A substantial portion of Canada's current economic difficulties, however, are self-inflicted and pre-date the tariffs by years. Ottawa's aggressive green-transition and carbon-reduction agenda—widely regarded as the most ambitious and punitive in the G7—has systematically raised energy costs, strangled investment in the resource sector, driven up industrial electricity prices, and made large parts of Canadian manufacturing internationally uncompetitive, all while delivering negligible global emissions reductions.

1. Trade Reciprocity: Ending a One-Sided Arrangement

Canada has several strong industries and a right to protect certain sectors, but its supply-management system for dairy, poultry, and eggs—imposing tariffs as high as 298% above tiny quotas—has been a persistent and justified source of U.S. frustration. These barriers are not retaliatory; they are permanent features that have shielded a small number of Canadian producers while shutting out American farmers who face far lower hurdles exporting north.

The U.S. has run large goods-trade deficits with Canada for years, and repeated Canadian non-compliance with USMCA dairy-access commitments eroded trust further. President Trump's 2025 reciprocal-tariff actions were explicitly designed to mirror the effective barriers Canada itself maintains. While USMCA-compliant goods (the vast majority of trade) remain exempt, the targeted duties on steel, aluminum, autos, and certain other products finally create symmetry.

This is not punishment—it is fairness.

2. Border Security and Fentanyl: Addressing a Growing Vulnerability Before It Becomes a Crisis

The initial tariffs were also tied to national-security concerns under the International Emergency Economic Powers Act (IEEPA), specifically Canada's insufficient action against fentanyl production (largely through precursor drugs) and trafficking, as well as irregular migration.

The northern border remains dramatically safer than the southwest border, but the trend of cartel diversification northward is real. The U.S. used tariffs as leverage, and the strategy worked: Canada appointed a fentanyl czar, committed over $1 billion in new resources, and significantly tightened enforcement. American lives are worth the temporary friction required to secure a shared border.

3. Self-Inflicted Wounds: Green Policies, Labor Extremism, Punitive Taxes, and Regulatory Overreach Are Doing More Damage Than Any Tariff

Much of Canada's economic stagnation and investment flight is home-grown, stemming from an interlocking set of ideological federal policies that have progressively undermined competitiveness and national unity.

The single largest culprit remains the federal government's uncompromising green/carbon-reduction agenda: nationwide industrial carbon pricing (currently $80/ton and scheduled to rise to $170 by 2030), net-zero electricity mandates, aggressive phase-out schedules for natural gas, and endless regulatory delays on LNG and pipeline projects have driven energy costs dramatically higher than in most U.S. jurisdictions. Electricity prices in Ontario and Quebec—once a competitive advantage—have become among the highest in North America for large industrial users once carbon levies and green mandates are factored in. Alberta's oil sands, Saskatchewan's potash and uranium, and British Columbia's natural gas now face capital flight as investors conclude that Canada is intentionally making fossil-fuel development unviable while renewable alternatives remain years behind schedule.

These green policies are compounded by hostile labor and tax measures. Quebec's labor code—the most pro-union in North America, with card-check certification, aggressive anti-scab laws, and labor tribunals that routinely side with unions—has driven multinational employers away. Amazon's January 2025 closure of all seven Quebec fulfillment centers (1,700–4,500 jobs lost) was a direct reaction to successful union drives and adverse labor-board rulings. General Motors' October 2025 decision to permanently end BrightDrop electric-van production at its CAMI plant in Ontario (affecting ~1,200 jobs) further illustrates how quickly capital flees when regulatory risk and costs escalate. Oxford Economics is forecasting total job losses in Canada to hit 140,000 by the end of 2025.

Ottawa's Digital Services Tax—a 3% levy applied retroactively from 2022 and overwhelmingly targeting U.S. tech giants (Google, Meta, Amazon, Apple, Microsoft) while sparing most domestic firms—has been officially labeled a trade barrier by the US Trade Representative and cited repeatedly by the Trump administration as discriminatory and protectionist. For now, Canada has deferred collections of the Digital Services Tax so that trade negotiations may continue.

Taken together, these centralizing, ideologically driven choices have produced the most serious resurgence of western separatism in decades. Polls throughout 2025 have shown up to 45% support for Alberta independence—the highest levels ever recorded—with Saskatchewan and other western provinces close behind. Separatist parties are polling in double digits, sovereignty-association referendums are openly discussed in legislatures, and provincial governments increasingly defy Ottawa on energy and carbon policy. When federal policies drive not just foreign companies away but provoke your own wealthiest provinces to seriously contemplate exit, the model has become destructive.

Canada recently shot itself in the foot once again and the result was the Trump Administration increasing general tariffs by another 10% in response to a deceptively edited television ad that was run by Ontario Premiere Doug Ford.  The ad was aired in several US markets and were timed to coincide with arguments being heard in the US Supreme Court over Trumps IEEA authority.  Trump indicated on Truth Social that Canada was trying to interfere with the judicial process.  The stunt carried out by Doug Ford was juvenile at best, and certainly did nothing to advance US/Canada trade discussions.

4. The Combined Impact: External Pressure Exposing Internal Fragility

Canada's 2025 GDP growth is limping along at ~1.1%. Manufacturing layoffs mount. Ontario projects up to 120,000 to 140,000 in job losses in trade-exposed sectors. The list of shuttered or idled facilities—GM CAMI, Algoma Steel, Paccar, Amazon Quebec, and many more—keeps growing.

These hardships are real, but they are the inevitable consequence of years of choosing ideological purity over competitiveness and then being shocked when the world's largest market finally pushes back.

Conclusion: The Wake-Up Call Is Coming from Inside the House

The United States is not trying to hurt Canada—it is simply insisting on the same reciprocity and responsibility any sovereign nation would demand.

The tariffs can be negotiated away tomorrow if Canada shows genuine willingness to fix the underlying imbalances. But no tariff relief will reverse the damage done by a decade of self-sabotaging green policies, punitive tech taxes, labor extremism, and internal alienation of its western provinces.

Some in Canada now place their hopes on a U.S. Supreme Court ruling that could limit or overturn the IEEPA-based tariffs. Even if such a decision materializes—and November's oral arguments suggested skepticism on the bench—the core issues will remain. The president has multiple statutory authorities (Section 232, Section 301, etc.) to maintain reciprocal measures, and the political will in Washington to address trade imbalances and border security is bipartisan and enduring.

The bulk of Canada's problems are overwhelmingly made-in-Ottawa. The only question left is whether Canadian leaders will finally acknowledge that reality and change course—or continue blaming the neighbor while their country slowly unravels from within.

America is holding up a mirror. Canada needs to decide whether it likes what it sees. While it is not likely to become the 51^st State any time soon, there is no mistaking that it is a country in trouble.

References

1.     Reuters / Al Jazeera / Fox Business (August 2025) – Oxford Economics forecast of ~140,000 Canadian job losses due to U.S. tariffs.

2.     Reuters / Yahoo Finance (January–February 2025) – Amazon Quebec warehouse closures and job impacts.

3.     Detroit Free Press / GM Authority / InsideEVs (October 2025) – GM ends BrightDrop production at CAMI plant, Ontario.

4.     Pollara Strategic Insights (June 2025) & Kolosowski Strategies (August 2025) – Alberta separatism polling data (22–45% support range).

5.     Government of Canada Budget 2025 / Fall Economic Statement updates – GDP growth projections for 2025 (~1.1% annual average).