Canada's deepening dependence on U.S. has been a decades-long evolution, experts say

On the federal election trail, Poilievre decried a “lost Liberal decade” of economic stagnation. He blamed former prime minister Justin Trudeau’s government for failing to advance resource projects, allowing Canadian energy to head to the United States at a discount and losing billions of investment dollars to American companies.

It is “kind of silly” to blame Trudeau for Canada’s economic reliance on the United States because it has been a “bipartisan project” since the late 1980s, said Blayne Haggart, a political science professor at Brock University in St. Catharines, Ont.

A desire for more secure access to U.S. markets prompted Progressive Conservative prime minister Brian Mulroney to pursue a free-trade agreement with the United States.

That agreement and its implications for Canadian industry, society and culture became the focus of the 1988 general election that led to Mulroney’s re-election.

The Canada-U.S. free trade agreement would soon expand to include Mexico, forming the basis of trade between the three countries through successive Liberal and Conservative governments to this day.

Greg Anderson, a political science professor at the University of Alberta, said Poilievre had some valid criticisms of the Liberal government’s shaky record on fostering economic growth, especially relative to the United States.

“It really did seem like for a while, you know, Canada couldn’t get anything built,” Anderson said.

U.S. President Donald Trump’s barrage of tariffs on Canadian products and his talk of annexation have rekindled interest in investing in a homegrown Canadian economy and ensuring the efficient east-west flow of energy.

The Conservatives and Liberals made election campaign promises to spur the creation of trade-enabling infrastructure to help transport resources across the country and to markets abroad.

“I find it kind of interesting now that public sentiment around all that has rapidly changed, and people are interested in building these things,” Anderson said, adding “there’s a bit of hindsight in all of it.”

Haggart said the Trudeau government might bear some blame for not seeing the arrival of the first Trump administration – which put trade-related pressures on Canada after taking power in 2016 – as a sign that dependence on the United States was becoming riskier.

“Trudeau didn’t do anything, really, about that. But I certainly didn’t hear any voices from Conservatives at the time … saying that we’ve really got to decrease our dependence on the U.S. market,” Haggart said.

“For the past four years, pretty much everybody was asleep at the wheel.”

Diversifying trade and weaning Canada off the United States market has proved to be difficult, Anderson said.

Commodities and products from different regions of the country, whether it be lumber, agricultural products, potash, energy or automobiles, head south to the United States, he noted. “The gravity of this gigantic consumer market has really been a bit of a challenge,” he said.

It has been similarly hard to eliminate interprovincial trade barriers, Anderson said.

“They’ve been working on this for decades, and it never happens,” he said. “These are really hard things to knock down.”

Haggart said it’s “going to be very expensive” to do what needs to be done to reinforce the economy as Canada’s closest ally becomes increasingly unpredictable.

While Haggart said there seems to be an appetite among Canadians to do big things now, he wonders what kind of “hard choices” Canadians might have to make.

This report by The Canadian Press was first published May 2, 2025.