Trump rekindles Quebec's Problems: A Return to Troubled Times
Donald Trump's trade wars have left Quebec scrambling to address pressing issues that were already a concern for the province.
Quebec and its businesses didn't require Donald Trump and his tariffs to understand their reliance on the United States was excessive, and it would be smart to capitalize on Canada's free trade agreements with the European Union, as well as countries belonging to the Trans-Pacific Partnership to expand their business horizons. According to Mia Homsy, Investissement Quebec's vice-president of strategy, workforce, and sustainable development, a team had already been working daily with companies interested in diversifying their trade.
Diversifying trade might be easier said than done, Homsy pointed out. Markets and rules differ noticeably from one another, making a smooth transition far from assured. And, in some cases, timeframes of three to five years might be necessary.
Moving some production to the United States might be another option, but the ever-changing environment brought about by Trump's unpredictable trade policy has left many companies uncertain about their future, Homsy noted. As a result, businesses are hesitant to make any moves, deciding instead to suspend expansion plans and find temporary strategies to mitigate the impact of the tariffs and the uncertainty.
Beyond Trade Diversification
Trump's tariffs haven't just brought attention to Quebec's trade situation; they've highlighted other pressing issues as well. For example, Quebec and Canadian businesses have struggled to improve productivity, an issue exacerbated by Trump's policies. "Investing in production means, technologies, innovation, and workforce training" will be crucial to correcting the issue, Norma Kozhaya, chief economist of the Quebec Employers' Council, believes.
Regarding the labor force, Quebec will face a shortage of workers in the coming years, leaving them no choice but to boost their productivity or attract immigrant labor to fill the gap. In fact, Quebec businesses rely heavily on immigrant workers.
However, the immigration debate in Quebec is over-simplified, according to Emna Braham, CEO of the Quebec Institute. The sudden changes in immigration policies, both permanent and temporary, along with the influx of asylum seekers, have led to a chaotic situation, leaving businesses and governments scrambling to deal with the situation.
Uncertainty is the real enemy for businesses, according to Pierre-Carl Michaud, professor at HEC Montreal. However, businesses can adapt to labor shortages by operating differently or more efficiently. Nevertheless, that requires a clear and stable situation, something Ottawa and Quebec are not providing by maintaining ambiguity and frequently changing policies.
Dealing with Uncertainty
In a context where more asylum seekers are arriving in Quebec, it's essential the province prepares for possible immigration surges, particularly from French-speaking Haitian migrants. In theory, they'd be willing to welcome these migrants, but Quebec must also develop rules, targets, and mechanisms to deal with the situation if needed.
At the same time, Quebec can't ignore climate change, Mia Homsy reminds us. The impacts on all aspects of life will be substantial and costly if we don't take action to reduce greenhouse gas emissions and mitigate effects.
All in all, Trump's trade policies have exposed Quebec’s vulnerability due to heavy reliance on the U.S. market, prompting proactive provincial measures to diversify trade links, support affected sectors, and reduce economic risk in the face of ongoing trade volatility. Moreover, trade disruptions caused by tariffs have led to increased productivity-boosting efforts, immigration policy reevaluation, and climate change mitigation strategies.
- Concerned by Donald Trump's trade policies, Quebec has been analyzing the need to capitalize on Canada's free trade agreements with the European Union and countries part of the Trans-Pacific Partnership to expand their business horizons.
- Mia Homsy, Investissement Quebec's vice-president, warned that diversifying trade might be easier said than done, as markets and rules differ significantly, making a smooth transition far from assured.
- In the face of Trump's unpredictable trade policy, businesses are hesitant to make any moves, deciding instead to suspend expansion plans and find temporary strategies to mitigate the impact of tariffs and uncertainty.
- Beyond trade diversification, Quebec businesses have struggled to improve productivity, an issue exacerbated by Trump's policies. Norma Kozhaya, chief economist of the Quebec Employers' Council, urged investing in production, technologies, innovation, and workforce training to correct this.
- Emna Braham, CEO of the Quebec Institute, pointed out that the immigration debate in Quebec is over-simplified and the sudden changes in immigration policies, both permanent and temporary, have led to a chaotic situation.
- Pierre-Carl Michaud, professor at HEC Montreal, stated that businesses can adapt to labor shortages by operating differently or more efficiently, but this requires a clear and stable situation, something Ottawa and Quebec are not providing by maintaining ambiguity and frequently changing policies.
- Aware of the growing number of asylum seekers, particularly French-speaking Haitian migrants, Quebec needs to prepare for possible immigration surges, develop rules, targets, and mechanisms to deal with the situation, and also not ignore climate change, as its impacts will be substantial and costly if no action is taken to reduce greenhouse gas emissions and mitigate effects.
