The collapse of trade negotiations between Canada and the United States over the weekend marks a significant turning point in the economic and political relationship between the two countries. After months of talks, Prime Minister Mark Carney’s government made the decision to walk away rather than accept what Ottawa viewed as an unfavorable agreement. While the move carries substantial risk, new polling suggests Canadians overwhelmingly support the decision.
According to the Angus Reid Institute, 76 per cent of Canadians believe the government was right to abandon negotiations instead of accepting a bad deal. Support extends across every region of the country and even traditional partisan lines, with a majority of Conservative voters backing the decision. These findings reinforce a trend that has been building for months: Canadians want their government to take a firm position in its dealings with Washington, even if that means enduring short-term economic pain.
Economic Risks, But Limited Exposure
That pain could be significant for the sectors that would be exposed to the new U.S.Tariffs. The tariffs threaten to raise costs for Canadian exporters and create challenges for industries that depend on integrated North American supply chains. However, as a result of the CUSMA deal that is still in force, it is important to note that the majority of Canada-U.S. trade remains outside the scope of these measures, including key sectors such as energy, potash, and many critical minerals that continue to flow across the border tariff-free.
Nevertheless, economists have warned that a prolonged trade dispute could reduce Canadian GDP by approximately 0.4 per cent and put as many as 90,000 jobs at risk, particularly in British Columbia, Ontario, and Quebec. The Angus Reid poll reflects these concerns. While Canadians support Ottawa’s stance, 38 per cent of workers report some level of anxiety about losing their job, including 13 per cent who are very concerned.
The Political Calculation
Politically, the trade breakdown presents both opportunities and risks for the Carney government. In the short term, the decision appears to have strengthened public support for Ottawa’s negotiating position. The government’s willingness to stand firm aligns with a broader sense of economic nationalism that has emerged as trade tensions with the United States have dragged on and intensified. Support for potential retaliatory tariffs is also notable, with 62 per cent of Canadians saying Canada’s proposed countermeasures are appropriate under the circumstances.
However, public support for the federal government’s position today does not guarantee political stability tomorrow. If tariffs begin to affect employment, investment, or consumer prices, attention will quickly shift from negotiating strategy to economic management. Governments often receive credit for showing resolve during a crisis, but they are ultimately judged by the electorate on outcomes.
What Comes Next?
Despite the tough rhetoric on both sides of the border, Prime Minister Carney is likely to continue pursuing a negotiated agreement. Walking away from the talks may prove to be a tactical pause rather than a permanent rupture in the relationship.
The next major milestone will be the U.S. midterm elections in November. A shift in the political landscape could weaken President Trump’s leverage and potentially create an opportunity for Canada to secure a more favourable deal. Until then, both governments will be balancing political considerations with growing pressure from businesses and industries that depend on cross-border trade.
A Push Toward Diversification
The longer-term story here is one of economic diversification. Nearly two-thirds of Canadians believe the country will emerge stronger from the dispute as it reduces its dependence on the U.S. market. That sentiment suggests growing public support for expanding trade relationships with Europe, Asia, and emerging markets while strengthening interprovincial trade.
For now, Canadians appear prepared to weather the economic and political uncertainty. The challenge for policymakers is translating that national resolve into a credible economic strategy that protects jobs, supports affected industries, and positions Canada for greater resilience within an increasingly unpredictable global trading environment.
We’re Here to Help
For more information and insights about what these developments mean for Canada’s political landscape, please contact:
Cameron Friesen – Vice President, Manitoba
cameron@prairieskystrategy.ca
204.332.1445
Stacie Lara – Senior Strategy Advisor, Alberta
stacie@prairieskystrategy.ca
587.577.2313
Grant McLellan – Vice President, Saskatchewan
grant@prairieskystrategy.ca
306.530.0177
Mat Steppan – Vice President, Alberta
mat@prairieskystrategy.ca
780.236.1543
Richard Truscott – Vice President, Alberta
richard@prairieskystrategy.ca
403.998.0494
Jeff Sterzuk – President
jeff@prairieskystrategy.ca
403.612.1724
