When Donald Trump announced that he would raise “the tariff on Canada” by 10 percent “over and above what they are paying now,” Ottawa’s response was instant: surprise, frustration, and confusion.
The spark this time? An Ontario government ad quoting Ronald Reagan’s words on free trade, aired during the World Series.
It may seem absurd, a diplomatic incident over a commercial, but it reveals something deeply structural: Canada’s long-standing habit of depending on a single customer.
A Century of Comfortable Dependence
Since Confederation, Canada has built its prosperity around one dominant partner at a time: first Britain, then the United States. Even today, roughly 74 percent of Canadian exports flow south of the border.
It makes sense geographically and logistically, but economically, it’s a trap. Every policy shift or tariff in Washington reverberates through Ottawa because our system was designed around one predictable buyer.
The Business Analogy
Any business owner knows the risk of having one major client. When one account represents most of your revenue, stability becomes an illusion. A single change in priorities or tone can threaten survival.
For a nation, the stakes are higher. Diversifying trade partners isn’t about new marketing; it’s about re-engineering infrastructure, regulations, and diplomatic frameworks.
Efficiency Without Resilience
Specialization has made Canada wealthy but brittle. A system that’s too efficient, optimized for one trade route and one regulatory culture, loses the ability to adapt. Economists call this path dependency: the deeper the track, the harder it is to turn.
Canada’s export machine works beautifully when U.S. demand is strong, and stumbles whenever it’s not.
The Resource Paradox
The irony is that Canada has everything it needs to build a more resilient economy; it just hasn’t built it here.
We rank among the world’s largest producers of critical minerals (nickel, copper, lithium, potash), lumber, and agricultural products, yet most of it leaves the country in raw form.
In 2024, for example, about 80 percent of exported Canadian wood was unprocessed lumber. The same is true in mining: Canada extracts over 500,000 tonnes of copper per year but refines barely half domestically.
As the old saying goes, we sell the Americans lumber, and they send us back toothpicks.
A Smarter Reflex
True diversification doesn’t mean scattering exports across new markets; it means moving up the value chain.
Canada’s future resilience depends on:
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Processing and transforming more of what we produce before it leaves our borders.
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Integrating into emerging green and technological supply chains, from batteries to advanced construction materials.
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Strengthening regional production so that wealth circulates inside Canada before it’s exported.
While Trump is raising tariffs, the deeper question isn’t how to respond politically; it’s how to change structurally.
A resilient nation isn’t one that exports the most raw material. It’s one that keeps and multiplies the value of what it creates.