🇨🇦 When the U.S. Gets a Sniffle, Canada Gets the Flu — And Ottawa Spent a Decade Making It Worse

With U.S. recession odds now sitting at 49 per cent according to Moody's broader AI model and Goldman Sachs at 30 per cent, Canadian consumer confidence has hit an 11-month low, with only 15 per cent of Canadians expecting a stronger economy in six months. Johns Hopkins economist Steve Hanke puts it plainly, as reported here: if the U.S. gets a sniffle, Canada gets one hell of a cold. Canada's trade exposure equals two-thirds of GDP. The U.S. equivalent is one quarter.

This vulnerability was not inevitable — it was constructed. Successive Liberal governments chose not to diversify trade corridors, blocked pipeline infrastructure that would have opened Asian markets, and spent the Trudeau years antagonizing the one trading partner Canada cannot afford to lose while running up debt that eliminated fiscal room to absorb a shock. The Canada-U.S.-Mexico Agreement, which Trump has now dismissed as irrelevant, was supposed to be the foundation of Canadian economic security. It turns out the foundation was always the relationship, not the paper, and that relationship has been badly mismanaged. Canada is walking into a potential recession with no diversification, high debt, and a prime minister whose entire worldview was shaped by the institutions that created this dependency.

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