Source: Financial Post

The three global issues facing Canada's new government are: approval of the Trans-Pacific Partnership (TPP); Canada’s position in the UN Climate Conference in Paris this December and how to gain the U.S. President’s approval for the Keystone XL pipeline.

Justin Trudeau won a nice majority, but with a slightly smaller percentage of the popular vote than Stephen Harper netted in 2011. That year, Harper got 39.62 per cent and this week Prime Minister designate Trudeau got 39.47 per cent.

This is the new normal in Canadian politics: Winners earn only one in three votes and the rest go elsewhere.

The other new normal is that the business of governing Canada is less about domestic matters (those policies are mostly provincial) and increasingly about participating in global affairs. Leaders must bob and weave through a gauntlet of organizations such as the UN, the G7, G20, trade partnerships, NATO meet ups and collaborate during emergencies ranging from refugees to Ebola outbreaks, earthquake relief or economic catastrophes and bailouts.

No sooner will the PM-elect move into 24 Sussex Drive than he will be drinking from this fire hose and have days to address three terribly critical challenges with profound economic ramifications. These are: approval of the Trans-Pacific Partnership (TPP); Canada’s position in the UN Climate Conference in Paris this December and how to gain the U.S. President’s approval for the Keystone XL pipeline.

Fortunately, Trudeau favors Keystone and has left his options open on TPP and will likely approve it.

That’s likely because the NDP made rejection of the deal central to its campaign platform and came in a distant third falling to only 19.71 per cent of the vote.

Trade underpins Canada’s living standards and the most important sectors are energy, autos and agriculture. Energy is not an issue and prominent auto magnates say the TPP does not throw them under the bus, contrary to some press reports during the campaign. Other winners are Canada’s unsubsidized agricultural exporters of grain, Canola and pork.

The casualties will be 12,746 dairy farms, 3,000 poultry farms and 1,000 egg farms whose benefits under supply management cannot continue if TPP is signed. These are not family farms, by the way, but multi-million dollar enterprises that have consolidated into major concerns, thanks to huge subsidies and protection from imports. They do not export.

 

The end of this system is what New Zealand and Australia have insisted Canada must do to join the TPP. They each scrapped their supply management systems decades ago and both are agricultural export giants. In fact, tiny New Zealand has become the world’s biggest exporter of dairy products.

These Canadian farms could do the same thing if they got organized, but they oppose the deal. They should be ignored or helped so they can transition.

The next challenge is the Nov. 30 UN Climate Change summit in Paris to hammer out a universal climate agreement. The international community wants to negotiate post 2020 targets to reduce greenhouse gas emissions even more than the last agreement in 2009. Harper was opposed.

Trudeau hinted at a pivot this week. “I will be engaging with the premiers to establish a strong position for Canada so that people know that Canada’s years of being a less-than-enthusiastic actor on the climate change file are behind us.”

The stakes couldn’t be higher for Canada because the country is a commodity-based economy that produces and uses huge amounts of fossil fuel. At present, Canada agreed in 2009 to cut emissions by 17 per cent by 2020 and is not close to reaching that goal because costs are enormous.

Trudeau can meet this deadline or delay it. He is likely to commit to greater cuts and follow the support for a carbon tax – a killer for Alberta and Saskatchewan – that leaders of the World Bank, IMF, Germany and others are calling for.

But Saskatchewan premier Brad Wall advised the new PM that “we want to make sure that whatever Canada is committing to doesn’t kneecap our economy in the West.”

And he must be heeded: The West is key to Canada’s economic growth and job creation.

On the other hand, if Trudeau turns greener the West may benefit if this gives President Obama cover with the environmentalists to approve Keystone XL, the single most important initiative on Canada’s economic agenda. Obama has delayed the pipeline decision for years, thus piling pressure on Canada, even though it makes huge economic and security of supply sense to the U.S.

Ideally, it could be a quid pro quo: After all, Trudeau supports the pipeline.

All of which goes to show that such interwoven issues don’t permit a new government time to get its feet beneath the desk. We have a new PM and a new cabinet coming, but they are faced with these three  – TPP, Paris and Keystone – in a matter of weeks. They are not just this year’s most important issues. They are the decade’s and beyond.

 

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