Trump will definitely be pushing hard for dairy concessions but Carney cannot afford to cave on supply management.

By Sheila Copps
First published in The Hill Times on July 7, 2025.

To cave or not to cave, that is the question.

According to Karoline Leavitt, the White House’s press secretary, Canada caved.

According to Prime Minister Mark Carney, his administration cancelled a tax initiative of the previous government in order to get trade negotiations back on track.

Carney knew there would not be too much push back in Canada since the tax was opposed by Conservatives and poorly understood by Canadians.

The trade-off of continuing negotiations in lieu of taxing American high-tech companies in the short term seems like a fairly easy call.

Many workers in the steel, aluminum, and auto industries are already seeing their jobs affected by American tariffs, so the sooner an agreement can be reached between Canada and the United States, the better.

But Leavitt’s crowing from the podium did allow Conservative Party Leader Pierre Poilievre to claim that the government has its elbows down in the fight for Canadian jobs.

To be fair, Finance Minister François-Philippe Champagne’s announcement of the cancellation of the Digital Services Tax was met with a major yawn by the public.

But those in the know understand that the tax mimicked a similar levy already imposed by the European Union, with countries like France and Spain already imposing a three-per-cent tax on companies providing certain digital services. In France, the tax is levied on firms with global revenues in excess of 750-million euros and in excess of revenues of 25-million in France.

Turkey has a DST more than double that of EU countries, with the levy weighing in at 7.5 per cent.

Canada has been a leader in finding ways to fund local content via the tax system, and it was fully expected in the streaming world that the digital tax passed last year was untouchable. It was not widely debated and as late as last week, Champagne confirmed the tax would be going ahead.

That was then and this is now. Carney obviously took a look at the big picture and decided he could afford to cancel the tax with little political punishment.

But there are other elements facing much more opposition if Carney plans to meet the deadline of July 21 for a trade agreement with the U.S. That was the timeline tentatively established by the American president and the Canadian prime minister at their G7 meeting in Kananaskis, Alta.

Trump keeps reinforcing his government’s opposition to Canada’s supply management system in our dairy industry.

That is one issue that is widely understood and broadly supported by all political parties.

It has even been subject to the provision that no government could eliminate supply management without a parliamentary vote.

The government and all opposition parties support the Canadian supply management system that limits imports of dairy products including milk and cheese, and adds heavy tariffs to some dairy items.

In reality, the heavy fees that Trump keeps referring to have never actually been applied because no American companies have imported enough dairy products into Canada to trigger the fee.

But on every occasion, Trump keeps referring to how “nasty” Canadian negotiators are, and how he would like to see the dairy system released from any agreement on supply management.

This is one hurdle that Carney will not be able to bypass as easily as he did with the DST.

The Bloc Québécois and the Tories have already indicated their support for retaining supply management. The only party that opposes it is the People’s Party, led by Maxime Bernier, which has no seats in Parliament. In fact, it was Bernier’s opposition to supply management that cost him the Conservative Party leadership in 2017. He was leading in 12 rounds of voting against Andrew Scheer and eventually lost the Tory leadership because of the support Scheer received from dairy farmers in Quebec.

Carney is committed to the July deadline for a trade agreement, but the pursuit of a deal will definitely put supply management on the line.

And this is one area where “elbows up” is required on the Canadian side. Carney cannot afford to cave on supply management ,and Trump will definitely be pushing hard for dairy concessions.

The political damage Carney would suffer from giving up on supply management is equally as important as the fight for steel, autos, and aluminum.

If Leavitt was crowing about Canada caving on the digital tax, she would be absolutely ecstatic if supply management were sacrificed to the larger trade agenda.

Carney’s elbows up strategy has worked so far. But the stakes are getting higher.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.

The boost in polling that Democrats have enjoyed since U.S. President Joe Biden dropped out of the race would not be shared by the Liberals if Justin Trudeau were to do the same.

By Sheila Copps
First published in The Hill Times on September 2, 2024.

OTTAWA–The post-Biden bump for the Democrats in the United States has not passed unnoticed in Canada.

One of the first questions asked of Prime Minister Justin Trudeau at the summer cabinet meeting in Halifax last week was just that: Could the Liberals get a similar bump if the prime minister were to step down, and the voters were presented with a different face at the head of the party?

Trudeau sidestepped the question, and continued to insist that his job was to “be there to invest in Canadians.” But his close friend and cabinet colleague Marc Miller did say that robust conversations were taking place within the confines of the caucus, without public disclosure.

Other ministers, including potential leadership candidates Mélanie Joly and Chrystia Freeland, were quick to support the prime minister’s leadership. But the party is roiling, as ministers and Members of Parliament seek their own Canadian bump.

It has been a year since the Conservative lead entered into double-digit territory, and nothing the government does seems to narrow that gap. But the notion of a parallel result if Trudeau were to resign is misdirected.

First of all, the hike for Democratic presidential candidate Kamala Harris has resulted in an increase of three to four per cent for her party.

Three to four per cent in Canada would not be enough to return to government, as the current polling differential between the Liberals and the Conservatives is much higher.

The United States is essentially a two-party system, so a small shift can make or break a victory. Even an independent with the name recognition of Robert Kennedy Jr. managed only six per cent support at the apex of his campaign. It is doubtful that six per cent would even follow him into an election. Now that he has thrown his support behind Republican candidate Donald Trump, his supporters will probably split between the two main parties.

Also, a two-party system lends itself to a smooth transition. In the U.S. case, the Democrats were able to replace U.S. President Joe Biden with Harris without a full leadership convention because opponents were edged out by the current vice-president.

The fact that she would have replaced Biden in the event of a presidential illness or incapacity made it simpler to rally around her at a national convention less than three months from the election.

In Trudeau’s case, his succession would trigger a full leadership process. Contrary to some media reports, Mark Carney is not a putative leader in waiting. There are several current cabinet ministers who have been quietly setting the stage for their own leadership ambitions.

Pundits would suggest that it is better to have someone from outside the current crop of politicians, and Carney certainly has a polished Canadian and international pedigree. But the Liberal Party’s previous experience with global pedigree has not been positive.

Michael Ignatieff is a brilliant scholar with a renowned global reputation who was supposed to be the party’s saviour. Instead, he was quickly rejected as someone who came back to Canada only to run for office. Carney has declined multiple offers to run for office, and that doesn’t sit well with those working in the trenches.

While the public may be tired of Trudeau, the party’s volunteer base is actively working to explain why his leadership and the current government are worth supporting.

The checklist is long for Liberals. National childcare, dental care, pharmacare and school lunch programs send a message that the party is working for all the people.

But the government has been telling that story for several months, and so far, it seems to be falling on deaf ears. Party members are ready for a leadership change, but also realize that the decision is in the hands of the prime minister.

Meanwhile, from François-Philippe Champagne to Dominic LeBlanc, many are weighing their future chances. Former parliamentarian Frank Baylis, who sold his heart-device business for $1.75-billion in 2021, is also actively assessing a potential campaign for the top job.

Baylis, son of a Barbadian immigrant, served in Trudeau’s government for one term, from 2015 to 2019, as the member of parliament for multicultural Pierrefonds-Dollard in Montreal, Que. If successful, he would be the party’s first non-white leader.

All of the foregoing means Liberals will not follow the American example and force out their leader. Multiple candidates are already planning their own robust campaigns, so there would be no shoo-in for Carney.

No huge bump, and multiple candidates rule out a smooth post-Trudeau transition in Canada.

Vive le Canada.

Sheila Copps is a former Jean Chrétien-era cabinet minister and a former deputy prime minister. Follow her on Twitter at @Sheila_Copps.