Why we support the now-dead Canada–U.S. deal

0:00Welcome to Hub Headlines. Today's program features the best commentary and analysis published in the Hub for September 3. Up first is Rudyard Griffiths and Sean Spear, writing on why they support the now-dead Canada US Trade Deal. We support the Canada US Trade Deal apparently reached in Washington on August 18, even though the talks that followed collapsed before it could be finalized. That's not a conclusion we expected to reach. For months, we have assumed that any agreement negotiated by the Trump administration would be far worse than the status quo. We have said and written that the spirit of NAFTA, if not the letter, was dead. Our pessimism reflected a broader reading of American politics. The Trump administration and Washington more generally have grown exhausted with unipolarity and the expectations and obligations it imposed on the US. One of those expectations was that Washington

1:00wouldn't fully leverage its asymmetric market power to secure more advantageous trade and investment arrangements with its allies. We think this instinct is wrong. It underestimates the benefits of American primacy and risks undermining American interests in a more fragmented and contested world. But it nevertheless seems like a reasonable starting point for understanding the administration's posture, beyond President Donald Trump's personal trolling. It's the signal amid the noise. That's why the terms reportedly negotiated by US trade representative Jameson Greer and the Canadian team surprised us. The emerging agreement was worse than the old status quo, but it was much less bad than we had assumed and considerably better than the alternative Canada now faces. That's a credit to Prime Minister Mark Carney and his team. It's also a sign that Greer, if not other members of the administration, seems to have approached the negotiations in good faith. The deal, as we understand it, would have accepted ongoing US tariffs on Canadian steel and aluminum,

2:03subject to a quota system, as well as autos, in exchange for preserving tariff free access for the vast majority of Canadian exports and heading off new 50% tariffs on roughly $20 billion USD in Canadian goods. The headline auto tariff would have fallen from 25% to 15%. Once credits for the US content in Canadian-made vehicles were applied, the effective tariff could have been closer to 7% for some models. Steel and aluminum tariffs would have fallen from 50% to 25% with most Canadian steel reportedly covered by quotas. The framework also included relief for lumber, though the details are less clear. Canada, in turn, would have removed its retaliatory tariffs and encouraged the provinces to restore American alcohol to their shelves. It also appears to have contemplated limited compromises on supply management and other immediate and longstanding bilateral irritants. Accepting ongoing tariffs on Canada's auto sector

3:03would have had long run consequences for investment and production. A permanent tariff advantage for American plants would gradually pull new mandates, capital, and supplier capacity south. That would be difficult and painful for the affected workers and communities. But trade negotiations are about balancing competing interests and ultimately prioritizing the national interest. Walking away from a deal to protect the sector, which represents 0.7% of GDP. At the expense of other parts of the economy seems short-sighted. Then there are the last minute issues that may have derailed the tentative deal. Some of them may indeed have been unacceptable. We're open to that evidence. But based on Canada's chief trade negotiator, Janice Charette's CBC interview, John Ivason's National Post Reporting, and Greer's series of interviews, the dispute was narrower and some of the American demands more negotiable than the government's initial characterization. Ivason even reports that they only became a fallback excuse

4:06after the Prime Minister was unable to persuade Premier Doug Ford to restore US alcohol to the provincial shelves because of his opposition to the auto tariffs. The evidence is now sufficient that calls for the carny government to provide more details about the negotiations, including the framework reached earlier in the week and the changes proposed before the talks collapsed. As for those who counsel against a deal on the grounds that the negotiating environment will improve, after the US midterm elections or the 2028 presidential election, this strikes us as a high risk and potentially costly bet. The midterms should give Democrats control of the House of Representatives. It's far from obvious, however, that this would materially alter the administration's trade policy. The president would retain considerable delegated authority over tariffs, while a divided and distracted Congress would struggle to constrain him. The 2028 presidential election is not only a long way away, but its outcome may produce conditions no more favorable to Canada.

5:07Protectionism and skepticism about the obligations of American leadership now extend well beyond Trump himself. Holding out therefore means accepting an escalating trade war for the next two years and possibly longer, in the hope that future American elections produce more felicitous conditions for negotiations. It means a deeper economic malaise in Canada and placing parts of the economy on something approaching COVID style government support. Perhaps that gamble will pay off, but its advocates should be candid about what they're proposing. The August 18 framework, by contrast, appears to have preserved tariff free trade for most Canadian exports under much worse political conditions than those that produce NAFTA and KUSMA. It would have imposed real and concentrated costs, particularly on the auto sector, but it would also have protected the larger national interest. Prime Minister Karni was therefore right to seek a deal and Canadian negotiators deserve credit for securing better terms than we thought possible. Those insisting that Canada should hold out

6:09are mistaking a durable shift in American politics for a temporary Trumpian aberration. We support the August 18 deal. That was a commentary by Rudyard Griffiths and Sean Spear. Rudyard Griffiths is the Hubs publisher and Sean Spear is the Hubs editor at large. You can read the full text of their article on our website, the hub.ca. Our second essay is by Bakus Barua, writing on why Ottawa should cheer Alberta's healthcare reforms instead of impeding them. Battle lines are being drawn up as health ministers in Ottawa and Alberta begin to square off on healthcare reform. The cause? Alberta's decision to allow doctors to provide care in both public and private settings. While Adriana Lagrange, Alberta's Minister of Hospitals and Surgical Services has claimed provincial jurisdiction over the delivery of healthcare services. Marjorie Michelle, Canada's Federal Health Minister, has expressed concern about the compatibility of Alberta's proposal with the reality of the Canada Health Act.

7:11Lawyers can quibble over who is right, but what Ottawa should be doing is welcoming Alberta's move and committing to amend the CHA if need be so that the Alberta government can continue to make its health system more like better performing universal systems in Europe. Let's be clear, physicians in Alberta and indeed, most of Canada are already able to opt out of the public system. However, to do so, they must give up their public role entirely. To continue supporting the public system, few have chosen this path. However, increasing frustration with the government's approach to healthcare threatens a potential exodus from public to private settings. Just ask Quebec, where the increasingly rigid rules to keep physicians stuck in the public system, backfired spectacularly and led to physicians applying for jobs in Ontario. Media have previously reported on some Calgary-based physicians traveling to the Caribbean to deliver private care, not to local residents, but to Albertans who fly there with them.

8:14Alberta's government understands this approach doesn't make sense, and in fact, provincial barriers actually threaten the very system they're intended to protect by forcing physicians into a binary choice. Enter dual practice legislation that offers physicians a more flexible option, allowing them to participate in the private sector without abandoning patients in the public queue. But there's a catch. Alberta receives billions of dollars in healthcare funding from Ottawa every year, and therefore needs to play by its rules. The Federal Canada Health Act does not explicitly prohibit dual practice, so long as services in public settings continue to adhere to the principles of the CHA. However, there's enough wiggle room in the wording that federal politicians, or a special interest group, could politicize the issue, choosing to claim such a change contravenes the principle of accessibility. Which is why guardrails are important, restrictions on what can be offered and under which circumstances, safeguards to prevent conflict of interest,

9:16commitments to transparency, and guarantees to make sure the public system has enough staff. This is the approach followed by several universal healthcare systems around the world with dual practice regulations. In Germany, physicians must commit to working at least 25 hours for the public system before they can provide private care. In France, it's five half days per week, with on-site private activity capped at 20% of public hospital activity. In the United Kingdom, doctors who have contracts with the public national health service must generally prioritize their duty to the public hospital. But Alberta understands this and has already committed to a number of guardrails with more expected to be announced in the coming weeks. And one suspects federal minister Michaels understands this as well. In fact, minister Michael's statements regarding ongoing targeted discussions to mitigate any misalignment with the CHA may simply be interpreted as a frank assessment of the reality on the ground,

10:18rather than a warning, though it's impossible to tell while the specific contents of her letter to the provincial minister remain undisclosed. Allowing physicians to practice privately without sacrificing their public role is a common sense approach based on our international peers. If this reform is deemed incompatible with the CHA, it's not Alberta, but the federal legislation that needs to change. That was a commentary by Bakus Barua. He is a research director for secondstreet.org. You can read the full text of his article on our website, the hub.ca. That's it for today's edition of Hub Headlines. We hope you enjoyed the program. Hub Headlines is produced by Alicia Rao. This program was narrated by automated voices. Thanks for listening.