In confidential memo, LeBlanc asks for ideas on how to fight back against U.S. protectionism
Finance minister says he wants new spending geared to shoring up Canada as it grapples with U.S. threats
Finance Minister Dominic LeBlanc has asked his fellow ministers to draw up a list of ideas he can deploy in the planned spring budget to fight back against U.S. protectionism, a threat that shows no signs of going away even if Canada has secured a pause to President Donald Trump's planned tariffs.
In an undated, confidential memo sent to cabinet ministers and obtained by CBC News, LeBlanc writes he is only willing to consider spending more money on initiatives that respond to the "current Canada-U.S. context" and those that "strengthen our national unity."
He's also open to projects that make life more affordable for Canadians or those that spur the country's growth, competitiveness and productivity.
"Team Canada must be ready to respond to the threat of unprecedented tariffs from the new U.S. administration and mitigate their impacts on the Canadian economy," LeBlanc wrote.
"We are at a crucial moment for our government and for our country."
While Canada got a reprieve Monday when Trump agreed to pause his promised 25 per cent tariff on virtually all of our goods, that's likely not the last the country has seen of the unpredictable president.
Trump said in a social media post that the pause was just an "initial outcome" and he's still looking for some sort of "final economic deal" with the country down the line.
There is a possibility Trump drops the push for a 25 per cent tariff and goes ahead instead with a 10 per cent universal tariff on goods from all countries after his administration wraps up a study on global trade in April.
Even a 10 per cent levy would be hugely disruptive to Canada given just how intertwined the two economies are after decades of liberalized trade.
There's also a possibility LeBlanc never tables a federal budget. Prime Minister Justin Trudeau is set to step down after the party picks his replacement on March 9.
The next prime minister may choose to go to an election right away rather than test the confidence of the House of Commons when it's scheduled to return on March 24. The federal budget is typically tabled sometime in April.
Still, LeBlanc told his fellow ministers that, if he's writing the next budget, it will be laser-focused on responding to expected "trade disruptions" and how the government can "provide temporary support" to impacted workers and businesses.
LeBlanc asked ministers to submit "no more than three priority funding proposals" to the Finance Department by Feb. 2 — a deadline that has already passed and one that fell before Trump's threatened tariffs were set to take effect.
He also mentions the most recent cabinet retreat, which suggests this letter was written sometime at the end of January.
That means ministers had only days to put forward concrete proposals to help the country weather the expected fiscal and economic storm with Trump back in the White House.
"Our focus is on advancing and defending Canadian interests. Therefore, I am relying on each of you to think of our collective needs, beyond the interests of your ministries, and be disciplined in putting forward items for consideration," the memo reads.
The Globe and Mail was first to report on LeBlanc's memo.
LeBlanc also said in the "current fiscal climate, it is more important than ever to focus on no-cost approaches," like cutting red tape, removing barriers to internal trade and investment and "streamlining government processes."
Trade barriers under review
While LeBlanc considers ideas for a federal budget that may never come, there is some other action underway to shore up the economy if a trade war materializes.
Trudeau and the premiers have agreed to break down some internal barriers to make trade freer within Canada now that the U.S. relationship is less solid than it once was.
The Committee on Internal Trade is meeting to draw up a list of burdensome regulations that could be dismantled to boost the flow of goods and workers between provinces.
Alberta Premier Danielle Smith and Conservative Leader Pierre Poilievre, among others, are also pushing the government to green-light prospective energy infrastructure projects like pipelines.
The Trans Mountain expansion project, funded and built by a Crown corporation, opened last year but oil sector boosters are calling for even more capacity.
To achieve energy independence from the U.S., Smith and Poilievre want to revive projects like the now-defunct Energy East pipeline to move Western Canadian crude to points east where refineries are still heavily reliant on foreign sources.
In 2023, Canada imported nearly 500,000 barrels of oil a day from countries like Saudi Arabia and Nigeria even though this country has the third-largest oil reserve in the world.
Pipelines to help funnel oil to Europe and Asia is also a way to diversify Canada's customer base because, as it stands, more than 95 per cent of the country's oil exports go to one market: the U.S., according to federal government data.
Speaking at an event in Washington on Tuesday, Natural Resources Minister Jonathan Wilkinson said the "shock" U.S. trade standoff has prompted some "reflection" in Ottawa about pipelines.
"Perhaps, in some areas, we are too dependent on infrastructure that flows only through the United States," he said.
Meanwhile, the Conservatives are renewing their push to get the federal Liberal government to recall Parliament right away even if there's a Liberal leadership race underway to pick Trudeau's replacement.
"Canada is facing a crisis, but the Liberal Party has shut down our Parliament. President Trump has put a 28-day pause on his tariffs, but nothing can be taken for granted. There is no time for rest. Canada must take back control of our border, strengthen our economy and put Canada First," the party said in a news release on Monday.
Under Canadian trade law, the government can impose retaliatory tariffs on the U.S. without Parliament's approval.
The government also maintains the federal cabinet can roll out parts of an aid package for workers and businesses — if it comes to that — without MPs.
Still, the Conservatives say they want to have a say "debating and considering responses" to Trump's threats.
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