We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
Former Canadian Prime Minister Brian Mulroney reacts to a standing ovation at the Canadian Club in Ottawa, Canada, on Sept. 14, 2007.
Mulroney’s passing sparks an outpouring of grief in Canada and US
Americans don’t pay much attention to Canadian politics for the simple reason that they are a less exciting version of what is going on in the US – with added snow.
However, the passing of former Prime Minister Brian Mulroney at the age of 84 has prompted a flood of glowing obituary articles in many American media outlets. Politico’s headline referred to Canada losing its “Washington Whisperer” – a man who gave eulogies for not one, but two former US presidents – Ronald Reagan and George H.W. Bush.
In 2004, at Reagan’s state funeral, Mulroney said the late president possessed a “rare and prized gift called leadership.” At Bush’s funeral in 2018, he said every head of government who dealt with the former president knew they were dealing with “a gentleman, a genuine leader, one who was distinguished, resolute and brave.”
Canada’s 18th prime minister spent much of his time in office strengthening the ties with the US, efforts that culminated in the Canada-U.S. free trade agreement (which later broadened to include Mexico as the North American Free Trade Agreement).
Mulroney became a valued friend of Reagan, with the two men of Irish heritage singing “When Irish Eyes Are Smiling” with their wives at a 1985 meeting in Quebec City, which became known as “the Shamrock Summit.”
Mulroney’s popularity did not always prosper domestically because of his friendships. He was succeeded by Liberal Prime Minister Jean Chrétien, who was once caught on a hot microphone telling Belgium’s prime minister that he liked to stand up to the Americans: “It’s popular … people like it, but you have to be careful because they’re our friends.”
Mulroney had no truck with such posturing and would reap the rewards of his close relationships by being able to speak frankly to his US counterparts at crucial moments.
During free trade negotiations, the clock was ticking down on a deadline, with Canada’s red line issue – an independent dispute resolution mechanism – still unresolved. Mulroney called Reagan and asked how the US had been able to strike a nuclear arms reduction deal with the Soviets yet could not get a free trade deal with their best friend over the line. Reagan subsequently instructed his negotiating team that the dispute resolution mechanism had to be included.
When George H.W. Bush politely told Mulroney that the Europeans were tired of Canada speaking up on the future of Europe, Mulroney’s notes of the call revealed he told Bush: “Tell the Europeans we’re not renting our seat in Europe. Tell them to go to the graveyards in France, Italy, and Belgium. We’ve paid for our seat.” Bush was so moved by the response he referred to it in his memoir.
After he introduced a national sales tax in 1991, Mulroney’s approval rating plummeted. “Popularity is bad for you. I try to avoid it like the plague, and I’ve been reasonably successful,” he joked.
Yet, his political opponents kept the tax in place, and it now yields a tenth of all revenues.
Former President George W. Bush issued his own tribute to Mulroney last week, saying he was “a great man … smart, charming, funny and kind.”
Anthony Wilson-Smith covered Mulroney for many years as a reporter and wrote a touching tribute in Canada’s Policy magazine. “Mulroney was most beloved and trusted by those who knew him best,” he said, feelings that reflected his regular acts of “quiet kindness.”
Mulroney will be laid to rest in Montreal on March 23, and it is expected that some senior American public figures will attend.
He was a consequential, transformative leader, as the outpouring of appreciation on both sides of the border shows.
Bracing for blizzards – soon a thing of the past?
The highlight of winter in frosty Ottawa – one of the world’s coldest national capitals – is the annual opening of the Rideau Canal Skateway, when the waterway at the heart of the city is transformed overnight into the world’s largest rink. Every year since 1970, when it first opened, thousands of hardy skaters have glided to and fro on it, stopping for hot chocolate and deep-fried treats on the ice.
Every year, that is, except 2023. Last year, for the first time in five decades, the canal did not freeze hard enough for skating to be safe, delivering a blow to the tourism industry and depriving frostbitten citizens of a chance to enjoy their city when they otherwise would be huddled indoors against the bitter cold.
With a dangerous storm hammering the Northeast United States and Eastern Canada, and a blizzard hitting the Northwest, this week, readers may not be pining for more opportunities to shovel snow or slog through slush, but winters are getting warmer, which has disturbing and unpredictable implications for agriculture, water security, public safety, and winter sports.
A world with less snow
This year, Ottawans hope that a looming cold snap will last long enough to get the skate sharpeners busy, but it’s no guarantee. The Rideau Canal needs a foot of ice to be safe, and that only happens if the city is well below the freezing mark for a week or two.
“It’s probably not going to happen,” says Gerald Butts, vice chairman of Eurasia Group, who lives in Ottawa and looks forward to skating on the canal every year. “It takes a week at minus 10 degrees [Celsius], and that’s not in sight.”
While not every city has a symbol of climate change running through its downtown, many other places are also having to adjust to a world with less snow and ice. Last year was the first year that Charlotte, NC, had no snow, while New York City only got 2.3 inches, a record low. And a stronger-than-usual El Niño – a naturally occurring upwelling of warm water in the Pacific – has disturbed normal weather patterns this year, leaving ski hills bare in British Columbia and the Sierra Nevada.
The tip of the iceberg
These are not the exception, so much as the (new) rule – a rule that only becomes clear by looking at the aggregate. According to the US Environmental Protection Agency, the snowpack diminished at 93% of the American sites the agency tracks between 1955 and 2022. Canadian data shows the same — less snow in most places over the decades – and while there is huge variability, this is playing out around the world.
A major Dartmouth College, New Hampshire, study published this week in “Nature,” found that natural variability has masked the impact of emissions on the snowpack, and warned that continued temperature increases are all but certain, leading to “widespread and accelerating snow losses,” with worrying implications for water security.
Wilderness snowpack is a source of spring runoff, filling wild rivers, wetlands, and lakes. When temperatures rise and precipitation falls as rain instead, the natural balance that sustains ecosystems is disrupted. Municipal reservoirs get low. Farmland gets parched. Wild fish hatcheries get disrupted. Forests get torched by wildfires. Ski hills get abandoned.
The resulting water insecurity can impact everything from our food supply and health to the global economy. And as for those ski resorts? Sure, some can make snow or sell visitors on “all-weather activities,” but they can’t all survive on the fake stuff alone.
Finding the base case
Scientists are working hard to track the variability and predict outcomes for ecosystems and communities, both by collecting better data and by figuring out what to do with it, using AI, for instance. The Canadian Space Agency is working on a satellite that would use radar to measure snow across the whole northern hemisphere.
But “a model is only as good as the base case you put into it,” says Butts. “And a huge part of the problem that we have in everything from weather predictions to crop forecasts to market predictions is, who knows what the base case is anymore? Because what was normal for most of the time we've been measuring these things is no longer normal.”
That may help us figure out what is happening, but the key to reversing the dangerous and unpredictable process is cutting the fossil fuel emissions that are causing climate change.
Snow and ice act as natural reflectors, bouncing sunlight off the surface of the planet. When they melt, the earth absorbs more sunshine, accelerating warming effects, which has scientists fearful about runaway warming, as wildfires increase and burning forests and peat bogs release vast stores of carbon.
Affordability: The political challenge remains
The governments of both President Joe Biden and Prime Minister Justin Trudeau are pushing policies to reduce emissions, but around the world, governments are finding it hard to convince voters to pick up the tab for those policies.
In Canada, the UK, and Germany, governments have had to backtrack on measures that put pressure on households struggling with a rising cost of living, says Graeme Thompson, a senior analyst with Eurasia Group's Global Macro-Geopolitics practice.
“When you ask people, do you want to do something to mitigate climate change and accelerate transition to clean energy, people generally say yes. But then if you attach a cost to it, support for those measures becomes very soft. And that's where the politics kicks in.”
The politics tells us that everyone, including skaters in Ottawa, will have to think harder about adapting to a world where there is less snow and ice.
Logos of mobile apps, Google, Amazon, Facebook, Apple, and Netflix displayed on a screen.
Canada averts a Google news block, US bills in the works
The act, which is modeled on Australian legislation, led Google to threaten to de-index news from its search engine. In protest of the law, Meta, the parent company of Facebook and Instagram, blocked links to Canadian news in the country on both platforms. It’s currently holding out on a deal as Heritage Minister Pascale St-Onge tries to get the company back to the bargaining table.
The Online News Act kerfuffle is a symptom of a bigger issue: the power of governments to regulate large tech firms – a fight that is playing out in Canada, the US, and around the world. California is considering a law similar to Australia's and Canada’s. The bill passed the Assembly but is now on hold in the state senate until 2024. In March, a bipartisan group of lawmakers, led by Sens. Mike Lee and Amy Klobuchar, introduced a similar bill in the Senate, casting it as an anti-trust, pro-competition measure. Meta has made similar threats to pull news in response to the US push to mirror the Australian and Canadian laws.
Tech giants are resisting attempts to extract funds from them to support news media, a tactic that is part of a broader strategy to oppose regulation. But the Australian and Canadian successes may encourage California, the US Congress, and other states to move forward with similar efforts. The coming months will be a test of whether governments are able – and willing – to regulate these powerful companies. All eyes should be on the progress, or not, of the California and Congressional bills along with Canada’s negotiations with Meta since these cases will help decide the future of tech regulation itself.
Canadian Liberals cry “Trump”… at their peril
Less than a year out from the US presidential election, concerns about Donald Trump’s potential return to the White House now include warnings of a possible slip into dictatorship. Last weekend, in the Washington Post, Robert Kagan wrote of a “clear path to dictatorship in the United States,” one that is “getting shorter every day.” Liz Cheney, a former Republican member of Congress and potential 2024 third-party presidential contender, echoed the concern, warning that the country is “sleepwalking into dictatorship.”
Meanwhile, north of the border, a desperate Liberal Party and Prime Minister Justin Trudeau, way down in the polls, are doing their best to paint their main rival, Conservative Party leader Pierre Poilievre, as a MAGA North incarnation of Trump, with everything that implies. As Politico reports, Trump’s influence over Canadian politics is significant, a potential “wild card” for Trudeau and a force that will shape the country’s next election, which is due by the fall of 2025 – but could come sooner.
MAGA-fying Poilievre
The Liberals have been working to tie Poilievre to Trump for months. They tested online attack ads ahead of an anti-Poilievre campaign back in November, and Trudeau claimed Poilievre was following Trump’s lead in abandoning Ukraine.
The logic of a Trump-Poilievre connection is simple. Trump is viewed poorly in Canada. The Liberals are drawing on Poilievre’s conservatism and faux-populism to cast him as a norm-busting, phony anti-elite politician hellbent on waging culture wars, demeaning the press, and attacking the country’s core institutions, such as the Bank of Canada and the Canadian Broadcasting Corporation.
So far, efforts to MAGA-fy Poilievre appear to be failing. The Conservatives are comfortably ahead in the polls by double digits, including two recent surveys – one by Abacus Data and one by Nanos Research – that found them ahead by nearly 20 points.
The Liberals are more than eight years into government and showing their age. And while they managed to come back from polling deficits ahead of the 2019 and 2021 elections – and retain government, despite winning fewer votes than the Conservatives – so far Poilievre has proven a stronger leader than either Andrew Scheer or Erin O’Toole, who led the Conservatives in the last two outings. Poilievre has better control over his caucus than his predecessors. His messaging and focus is on economic issues, particularly the housing crisis, and that resonates with Canadians.
Trump vs. Trudeau, Take Two
Americans worried about Trump 2.0 believe they are staring down a real threat to the republic. As CNN’s Stephen Collinson wrote earlier this week, Trump’s “increasingly unapologetic anti-democratic rhetoric” seems likely to foreshadow a threat to the country’s constitution and its checks and balances. There are fears he will stack appointments with cronies and ignore limits on presidential powers while finding willing accomplices in Congress and state legislatures. Will the man who refused to accept the 2020 election outcome accept 2024’s results if he loses? And, if he wins, will he leave quietly in 2028?
If Trump wins, the US might not be the only country in trouble. Trudeau may face Trump’s wrath – especially after being used as a punching bag ahead of the Canadian election. In 2020, John Bolton detailed how much Trump dislikes Trudeau, an account that rings true in light of how rocky the relationship between the two leaders was. Those years included awkward bilateral meetings, summit showdowns, rebukes over policy decisions including Canadian military spending, and an acrimonious renegotiation of the North American Free Trade Agreement. There is little chance the relationship will improve if Trump wins in 2024, and voters are taking note.
An October poll by Abacus Data found that Canadians believe Poilievre would better manage Trump than Trudeau – 37% to 28%. The polling firm’s CEO David Colletto explained to the Toronto Star that a Trump win would not necessarily boost Trudeau’s reelection chances, as Liberals seem to believe. He noted that respondents see Poilievre and Trump as sharing certain conservative affinities and perspectives. In this way, at least, Poilievre’s alleged proximity to Trump for them is seen as a potential asset.
What’s next?
Americans must consider what a Trump 2024 win would mean. Graeme Thompson, senior analyst at Eurasia Group, warns that observers may be discounting the possibility of it hurting US democracy.
“I think people are underestimating – as they did in 2016 – the odds that Trump wins the next election and the potentially dire consequences for the US republic that could entail,” he says. “The campaign itself is going to be brutal, and there’s a good chance that the losing side rejects the outcome, regardless of who wins.”
Canada must also prepare for a Trump win, and the Liberals will be doing so while trying to use the former president and the MAGA crowd as an anti-Poilievre cudgel – a strategy that may not even work. While Thompson reminds us that Canada is great at managing its relationship with its southern neighbor, “it will need that skill more than ever if it faces a second Trump presidency.” Moreover, the governing party might wish to rethink its strategy.
“If the Liberals are still in power,” he says “they would be smart to de-personalize the relationship as much as possible – that’s to say, make it transactional and interest-based, especially given the bad vibes between Trump and Trudeau.”
Unless something changes, given the current polling data, the Liberals, despite their best efforts, might not be around long enough to take that advice.
Canada's Prime Minister Justin Trudeau.
Google throws Trudeau a lifeline
Canada’s Online News Act, introduced last summer to force revenue-sharing on tech giants, backfired badly when Meta decided to block Canadian news outlets from their platforms rather than pay up.
Bill C-18 and the tech giants’ response to it spelled trouble for a media industry already in crisis – traffic and revenue plummeted. It was bad news for PM Justin Trudeau, whose revenue-sharing law was intended to improve things for media outlets, not make things worse, and it opened him to criticism that he was incompetently wrecking an industry he was trying to help.
But this week brought a turn in fortune. Canada reached a deal with Google that will see the tech giant compensate Canadian news outlets for linking to their stories. The deal, which requires Alphabet to pay between $100 million and $172 million a year, is a huge relief to Trudeau after months of withering criticism.
Facebook and Instagram are still blocking news links from Canadian publishers, and there is no indication that Meta wants a deal under any circumstances.
Google and Meta were undoubtedly nervous about an open-ended requirement to pay what could set a pricey precedent for them in other jurisdictions. However, according to the CBC, Ottawa will introduce regulations allowing Google to negotiate with a group representing all media organizations, thereby limiting its arbitration risk. Similar laws are being considered in Washington state and California.
The money in question – well below $200 million – is not huge considering that Google has about half of all of the $14-billion digital advertising revenue in Canada in 2022.
Reaction in Canada is mixed. The deal comes as a relief, but it will not save the industry. In both Canada and the United States, the rise of digital advertising has bled revenue from traditional media, leading to job losses and growing news deserts, or areas without a local newspaper. The Trudeau government responded with this bill and with government subsidies: The recent fall economic statement included $129 million, for example, for news organizations through a tax credit for up to $29,750 per journalist.
But such government backing may come at a price. Increasingly, Conservatives are warning that news organizations will be motivated to support the Liberal government in order to keep the money flowing.
Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland.
Will Trudeau’s digital services tax lead to trade dispute?
After all, US Ambassador David Cohen warned in July that if Canada introduces such a tax, his country would have “no choice but to take retaliatory measures in the trade context, potentially in the digital trade context.” Canadian Finance Minister Chrystia Freeland, no stranger to trade disputes with her American friends, appears determined to proceed.
"It's really a matter of fairness," she said. "There are other countries, our partners, who are today collecting DST. That DST is helping make essential investments in their countries, and it's just not fair for Canadians to be deprived of that revenue."
The Canadian argument is that tech companies collecting billions of dollars of revenue in Canada — like Netflix and Amazon — are able to shelter their profits in low-tax jurisdictions and are not contributing meaningfully to the economy. The Americans, unpersuaded by these arguments, don’t want to see Canada break from an OECD consensus, which is to wait until there is an international tax agreement. Business groups in both countries have asked Canada to hold off to avoid the uncertainty and disruption of a trade dispute.
The new legislation introducing the tax did not include a date, which means the government could implement it when it sees fit. Freeland may be hoping that it gives her leverage in trying to convince her American counterparts to accept the tax without imposing countervailing duties.
The Graphic Truth: Where immigrants to US & Canada come from
When it comes to immigration policies, Canada and the United States often go in opposite directions. Ottawa’s per capita total towers over Washington’s – 1.05 to 0.30 – because it strategically positions immigration as a cornerstone of its economic growth plan. In short, it bolsters the labor force.
But last week, we told you that 44% of Canadians (up from 27% last year) now think that immigration levels are too high, the biggest change in sentiment pollster Environics has seen in more than four decades. While this has prompted a new government cap on newcomers, the cap is high: 500,000 a year.
In stark contrast, US immigration policies are subject to the winds of changing administrations, and immigrants are often cast as a strain on the economy, limiting the number of jobs and resources available for Americans.
So where do most immigrants to the US and Canada come from? India tops the list for Canada, with the number of Indians who have become permanent residents in Canada tripling since 2013. India is No. 2 on the US list, beaten by more than twice as many migrants from Mexico.
We look at the top 10 countries of origin for immigrants to both countries.
Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks to journalists on Parliament Hill.
Expect a ‘big fight’ over digital service tax
The US ambassador has once again warned Canada that it should expect consequences if it proceeds with a plan to impose a digital service tax on the tech giants. David Cohen, in response to an audience question at a Canadian Club luncheon in Ottawa, signaled that it could get nasty.
“That will be an area of contention unless it is resolved," he said. “There’s a place where we’re either going to have to have agreement, or we’re going to have a big fight.”
Finance Minister Chrystia Freeland surprised observers, and her friends in the United States, when Canada refused to agree with other countries to delay adopting such a tax at a meeting of the OECD this summer, complaining that it had waited long enough.
The tax would impose a 3% levy on big tech firms — many of them American — that earn revenue from Canadian customers without paying tax in the country. It is scheduled to kick in on Jan. 1.
On Wednesday, Freeland said that after a recent trip to Washington, she was “cautiously optimistic” that she would reach a deal with the Americans and avoid a showdown.
Neither side would benefit from a high-profile dispute over the matter, so a face-saving compromise would be welcomed by both countries’ business communities, which have warned Freeland against forging ahead in the face of opposition from Washington and Silicon Valley. If a showdown has been averted, Freeland may reveal as much in her department’s Fall Economic Statement, due for release later this month.