Canada’s Economy Overlooked Impact of Trump

February 26, 2025 TruthUSA

News Analysis

On the same day this week that New Brunswick’s Irving Paper said it’s closing half of its operations in the province, Apple announced a US$500 billion investment in the United States.

Apple’s announcement came on the heels of Saudi Arabia committing to a US$600 billion investment in the United States in January, and an Emirati businessman pledging US$20 billion to build data centres in the country earlier the same month.

Meanwhile, the Tissue subsidiary of Irving, whose Paper division cited rising energy costs for cutting operations in Canada, announced a US$600 million expansion to its operations in Macon, Georgia, in late November.

While the threat of Donald Trump’s tariffs on Canadian exports is garnering most of the attention, whether in the news cycle or amid the Liberal leadership race, an issue that isn’t getting as much attention is how the U.S. president’s focus on cutting taxes and regulations and using other tactics to attract business is impacting Canada’s competitiveness in attracting investments.

“Our real problem in Canada is our anti-business culture,” says Philip Cross, a former chief economic analyst with Statistics Canada, and now a senior fellow with the Macdonald-Laurier Institute.

Cross told The Epoch Times that since tariffs will also carry major burdens for U.S. consumers, the likelihood of the United States maintaining high tariffs on all Canadian exports for an extended period of time is low.

“Apart from tariffs, [Trump] is doing a lot of other things, like cutting corporate taxes and regulations and everything else that make the U.S. a much more attractive place to operate as a business. That’s the real threat, not the tariffs,” he said.

US Focus on Business

Trump has signed a number of executive orders to cut regulations and boost energy production since his Jan. 20 inauguration, and has also said he plans to cut taxes.

He has created a White House panel focused on achieving “energy dominance” while saying his agenda will “unleash American energy.”

An Apple logo adorns the facade of the downtown Brooklyn Apple store on March 14, 2020. AP Photo/Kathy Willens, File

A survey by The Conference Board released last week said that optimism among U.S. CEOs surged in the first quarter of this year compared to the previous one, rising by 9 points to 60, marking the first time since early 2022 that the index had a value “well above 50.”

During a Feb. 7 meeting between Trump and Japanese Prime Minister Shigeru Ishiba, the two leaders announced a joint venture for a liquefied natural gas (LNG) project in Alaska.

Meanwhile, as energy-deprived Europe is looking for new energy sources amid conflicts with Russia, Prime Minister Justin Trudeau sa d in 2022 that there was no “business case” for an LNG export terminal to Germany, and that the focus should instead be on “cleaner energy sources.”

“Trump is definitely focusing on energy,” Ross McKitrick, a professor of economics at the University of Guelph, said in an interview. “It was central to his approach in the first administration, but even more so now with his stream of executive orders. And he has signalled that he’s going to get energy costs even lower in the U.S.”

The combination of these activities is making the United States an attractive destination for investment, whereas Canada’s regulatory and taxation environment is having the opposite effect, he says.

A Bank of Canada analysis last March said that by 2022, Canada’s productivity had fallen to 71 percent of that of the United States. McKitrick says the gap has widened even further from this figure.

In terms of foreign direct investment, Canada has continued to be among the top-ranked countries, thanks to its educated workforce, rule of law, natural resources, and proximity to the United States.

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