Trump Tariffs? Let’s Not Get Angry; Let’s Innovate

Published in The Gazette.

Faced with people who constantly threaten others, my father used to say: bien faire et laisser braire, which literally translates as “do a good job and let them bray.” The old British wartime directive “keep calm and carry on,” now so popular, would be the equivalent today.

We should heed this advice in the face of trade threats from U.S. President Donald Trump, which are now more than threats, with tariffs on our exports coming into effect. With Canadians and their governments starting to put together a strong coordinated response, let’s take advantage of this Pan-Canadian momentum and pursue the necessary digital, structural and sustainable transformations to enhance our country’s capacity to innovate.

The best way to deal with these threats is to invest, collaborate, innovate and build a more resilient supply chain within successful innovation ecosystems on this side of the border and with like-minded countries. We have everything we need to innovate here: natural and human resources, plentiful sources of energy — including low-emission ones — and under-exploited domestic market and trade diversification opportunities.

We have a long history of being inventors and tinkerers. The speed with solutions were found during the COVID-19 pandemic is a testimony to this. However, we are not maximizing this innovative potential. We are not translating it into expected economic gains, in part because we often sell our companies to foreign interests instead of investing and growing them domestically.

As people are fond of saying, necessity is the mother of invention, and we should not let a good crisis go to waste. How? Let’s look at some concrete examples:

We continue to look to reduce our carbon emissions intensity, and this crisis is forcing us to think about self-sufficiency in key areas including food and energy. We have a vast expanse of unused — and usable! — flat roofs. These spaces could be used for urban agriculture and solar panels.

As these will likely need stronger structures to support the weight, why not add a storey or two and at the same time more housing? Prefabricated home and building designs have progressed by leaps and bounds globally over the past 60 years, and yet, are not being used to their full capacity here.

Our critical minerals lack a robust domestic market, leading to their export at low prices without local processing. In general, extracting value from resources through research and development and transformation into non-commodified, specialized products (such as “green steel”) is an excellent way to escape the so-called natural resource curse. Minimizing the distance that minerals travel, from extraction to refining and transformation, also helps reduce greenhouse gas emissions.

On transportation, the recently announced high-speed rail between Quebec City, Ottawa and Toronto will improve much-needed long-distance labour mobility, which can be constrained by family ties. But we also need to move with greater urgency on public transportation, including trams, trains and subways. Workforce mobility, which fosters idea exchange, is crucial for driving innovation, including business process innovation, leading to increased productivity.

We need to imagine what future places of manufacturing, business, leisure and housing will look like. For example, how do we repurpose the seven warehouses Amazon is leasing in Quebec, which the company will vacate in the coming months? They are typically well-located — the one in St-Hubert, for example, is located near the railroad.

We must, of course, be prepared for any eventuality, but the dangers emanating from south of the border must not distract us from what we can accomplish when we set our minds to it. Looking beyond this constant cacophony, let’s concentrate on building a stronger, innovative Canada. We have our work cut out for us but also the resources to do it.

Catherine Beaudry is Fellow-in-Residence at the C.D. Howe Institute and a professor at Polytechnique Montréal, where she holds the Canada Research Chair in the Management and Economics of Innovation.