Diversification… not exactly a new concept

In 1958, Prime Minister John Diefenbaker was campaigning in an election for his second term as Prime Minister of Canada. He made a short stop in Amherst, N.S. and attended a reception at the home of lawyer Thomas Giles. Although I was only 13 at the time, my father took me to the reception to hear Prime Minister Diefenbaker s presentation. Mr. Diefenbaker had a very distinctive way of speaking and certainly had a presence. Once you heard him, you never forgot him.

Mr. Diefenbaker's central argument was that Canada was overly dependent on the United States market and should pursue greater trade diversification by strengthening our international trading partners. I didn t really understand the thrust of his speech, but he was very interesting to listen to.

On the way home, my father explained that for Canada to be so dependent on the United States market would be like his car business having one customer buying 75% of his cars and trucks. If that one customer became disillusioned and left, Dad said that his business would likely collapse. The same could happen to Canada. I got it and never forgot the lesson of not putting all of your eggs in one basket.

Since then, all eleven Canadian prime ministers have made the same argument, whether they were Conservative or Liberal. Although some were more committed than others, Canada has continued to put most of our eggs in one basket.

Prime Minister John Diefenbaker was among the first to argue that Canada was too dependent on the U.S. market. He promoted stronger trade ties with Commonwealth countries, particularly Britain, to broaden Canada's economic relationships and maintain greater independence.

Ironically, in 1959, his government cancelled the Canadian Avro Arrow and purchased fighter aircraft from the United States.

Prime Minister Lester Pearson supported expanding Canada's trade relationships beyond the United States and encouraged participation in global markets through multilateral trade agreements.

Prime Minister Pierre Trudeau made diversification an explicit objective through the "Third Option" policy, which sought to reduce Canada's vulnerability to U.S. influence by strengthening ties with Europe, Japan, and other regions. Sound familiar?

Prime Minister Joe Clark supported reducing Canada's dependence on the U.S. market by strengthening economic ties with Europe, Japan, and other international partners, a cause he continued to champion even after leaving office.

Prime Minister Brian Mulroney is best known for the Canada-U.S. Free Trade Agreement. While focused on securing access to the U.S. market, he also supported expanding trade with Europe and Asia.

In caucus, I recall both Mr. Mulroney and Finance Minister Michael Wilson discussing the importance of securing access to the U.S. market through signed agreements while pursuing opportunities in other growing markets.

Although Prime Minister Campbell only served for a short time, she argued that Canada should pursue broader international trade partners, especially in the Asia Pacific region rather than relying on the United States market.

Prime Minister Jean Chrétien actively promoted diversification through impressive Team Canada trade missions, leading large business delegations to countries such as China, India, Brazil, and Chile.

Prime Minister Paul Martin argued that Canada needed to reduce its reliance on the U.S. market, which received nearly 85 percent of Canadian exports, and emphasized opportunities in emerging economies, particularly in Asia.

Prime Minister Stephen Harper actively pursued diversification through new trade agreements and the Global Markets Action Plan. His government negotiated CETA (Comprehensive Economic and Trade Agreement) with Europe and participated in negotiations for the Trans-Pacific Partnership, expanding access to Asia-Pacific markets. He was reaching out in all directions.

Prime Minister Justin Trudeau completed the CETA agreement started by Mr. Harper and ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Later, he launched a formal Trade Diversification Strategy, with the goal of increasing Canadian exports to markets outside the United States.

Prime Minister Mark Carney has expanded this long-standing effort, emphasizing stronger trade and investment relationships in Europe, Asia, and the Indo-Pacific region.

Motivated by unpredictable U.S. tariffs and changes in United States trade policy, he has placed greater emphasis on diversification than most of his predecessors.

Going back to my first caucus with Brian Mulroney's government, it is now much clearer what Mr. Mulroney meant when he stressed the importance of clear, signed agreements to guarantee fair access to the United States market.

Eleven prime ministers, from Diefenbaker to Carney, have shared a common concern: Canada's dependence on the U.S. market. Today, as U.S. leaders discourage imports of Canadian cars, lumber, dairy products, steel, aluminum, and other goods and encourage Canadian businesses to move jobs to the United States we can better understand their concerns.

It appears that the pursuit of diversification will need to remain a priority for the next eleven prime ministers as well. Hopefully, we have learned the lesson my father explained to me after leaving that meeting with Prime Minister Diefenbaker in 1958.