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Down to business: The next chapter of the Canada-U.S. relationship

Down to business: The next chapter of the Canada-U.S. relationship

After tumultuous final weeks, the Trump era ended on January 20. With daunting challenges in front him, President Biden finally takes the reigns of the U.S. executive branch with a promise to fundamentally change the tone of political Washington, while signaling to foreign allies that the U.S. is once again ready to engage on the international stage.

The inauguration last week left no doubt how he plans to lean into bipartisanship, science, and a full 180 degree turn on addressing climate change. With a slew of executive orders, and detailed commitments on how to comprehensively bend the country’s steep COVID-19 curve, President Biden knows that the importance of moving quickly in the proverbial “first 100 days” has never been more important.

Furthermore, with shades of Obama-era messaging, President Biden’s inauguration address and the multiple speakers leaned into the need for hope and change to underpin how his government will lead. And just in case the point wasn’t already obvious, the brilliant Amanda Gorman exploded on to the world stage, and eloquently found a way to convey and amplify what is required.

For Canada, as important as the what—the key objectives of his administration out of the gate—the how will matter just as much. Including to Ottawa and various provincial capitals.

The President has picked an experienced, diverse cabinet. In Kamala Harris, he has chosen the first black and Asian-American woman as his Vice President and de facto Chief Operating Officer. He is also seemingly going to double down on a bet that his deep experience as a Senator and former Vice President will translate to legislative wins with Republican law makers who represent still-skeptical red 2020 voters.

The President’s first foreign call was to Prime Minister Justin Trudeau on Friday, January 22. The symbolic importance of Canada being at the top of call sheet cannot be underestimated: the last four years of the bilateral relationship have been nothing short of miserable. Now the world’s largest trade relationship will receive the attention it deserves. Nothing covered through the standard “read out” of their first call is a surprise: the two leaders covered the wide gamut of key bilateral issues, including trade, defence cooperation, softwood lumber, and an early critical disagreement on the President’s decision to walk away from the Keystone pipeline.

Moving forward, NATIONAL submits that “granularity” of the refreshed Canada-U.S. is of critical importance to monitor for Canadian businesses. Getting beyond assessing the initial symbolism—in line with our previous post—is critical. We will be watching for various angles to emerge, including the following:

How Biden Administration priorities (instantly) become top Trudeau Government issues:

The new “Buy American” commitment from the White House was discussed between the leaders on Friday. The minutia of what this commitment means to Canadian businesses needs to be clear given the deeply entrenched business links in multiple sectors. This is not merely a PMO-White House discussion: the Canadian government—and our embassy in Washington—will be raising this issue with key members of the U.S. House and Senate in the coming days. This will be a full court press, and the voice of Canadian industry will need to be clear and compelling.

The Biden team announced a “Buy America” theme today, January 25, with new executive actions, as part of the second week roll-out on top areas of focus. One such new measure is a new senior position in the White House’s Office of Management & Budget who will focus on “made in America” initiatives and U.S. jobs; in other words, a centralized function under the President to coordinate across the U.S. government. This will only serve to amplify the degree to which the Trudeau Government will need to move quickly.

The parallels of a minority Canadian parliament and a tight “red and blue” U.S. Congress:

From a distance, the Democratic-controlled House of Representatives, and the now evenly split U.S. Senate, might seem like an easy path for President Biden to move on key mandates. It won’t be. The balancing act on the pending rules of the Senate—and how power is shared—will inevitably impact all legislation. Much like the Trudeau Government needing the support of the opposition parties to remain afloat, or to move a key issue through parliament, the Biden White House will need to ensure careful steps are taken with Democrats and Republicans alike before pushing forward. Canadian sectors—manufacturing, energy, and clean tech, for example—will need to carefully assess whether their bottom line will be impacted on delays or partisan bickering, and how government engagement both north and south of the border will help.

Cabinet to Cabinet links:

The tone of the Canada-U.S. relationship is unquestionably set at the top with the Prime Minister and the President. But Canadian businesses should be equally interested in initial outreach between Canadian cabinet ministers and their respective U.S. colleagues. Such early “bilats” will start to take shape in earnest when the President’s various cabinet appointees are confirmed by the U.S. Senate, and start to look at their key international components of their mandates. Canada will be at the top of the list for the new Secretaries of the Treasury, Defence, Health and Human Services and State—to cite only a handful—and those relationships need to be premised on seeing what the two governments can accomplish together.

On a related note, NATIONAL will also be watching to see how the dynamic between Deputy Prime Minister Chrystia Freeland and U.S. Vice President Kamala Harris takes shape. Both are widely viewed as potential future leaders of their respective parties, and both play a similar, critical “whole-of-government” roles. More importantly: both are instrumental to their respective leaders and cabinet colleagues on all key strategic decisions, including those impacting the Canada-U.S. relationship.

NATIONAL will be carefully reviewing how both governments position areas of disagreement and friction in the coming weeks. Our Firm’s team of Canadian public affairs and government relations experts are well situated to provide strategic counsel as the Canada-U.S. relationship evolves under President Biden and his cabinet. We stand ready to help.

Gordon Taylor Lee is Managing Partner of NATIONAL’s Ottawa office. He was formally an official within Global Affairs Canada’s North American Bureau and Canada’s Consulate General in Seattle.