Why Business is Reluctant to Rally Around the Flag. It’s not 1988

Dale Eisler is a former Assistant Deputy Minister and Consul General in the U.S. He is currently a Senior Policy Fellow at the Johnson Shoyama Graduate School of Public Policy.

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The complex issues and their consequences of the new uncertain, even threatening, relationship with the United States can easily turn one’s mind to 1988. It was an election year in Canada, and the ballot question was whether to support a landmark free trade agreement with the U.S. Negotiated by the then Progressive Conservative Brian Mulroney government, the trade initiative had been the central recommendation of a Royal Commission led by former Liberal cabinet minister Donald MacDonald. One could argue it had a bipartisan imprimatur. It was also a time when trade liberalization and globalization was driving much of the international economic debate.

One moment in the election campaign stood out. During the televised leaders’ debate Mulroney faced off against Liberal leader John Turner, who staunchly opposed the agreement. Free trade was an emotional issue that struck at Canada’s identity and sense of nationalism. The division between the two leaders was sharp, even tense. But it was also long before the arrival of social media and its corrosive effect on the public dialogue. It was a time when political rhetoric was still civil and respectful.

The two leaders were little more than arm’s length apart when they verbally dueled. Both were eloquent. But an interjection by Turner has stood the test of time and its echo seems especially relevant in today’s fraught environment.

“We built a country east and west and north. We built it on an infrastructure that deliberately resisted the continental pressure of the United States. For 120 years we’ve done it. With one signature of a pen, you’ve reversed that, thrown us into the north-south influence of the United States and will reduce us to a colony of the United States, because when the economic levers go, the political independence is sure to follow.”

The election handed Mulroney a majority and the free trade deal was quickly consummated. It would be a gross overstatement to suggest that Turner’s fears have come true. More than 35 years later, Canada remains independent and sovereign. You could even argue that Canada has never been more united in its will to stand up to the challenges and threats to our economy and nationhood from the Donald Trump administration. That very sentiment led to the election of the Mark Carney Liberal government and maintains Carney’s huge personal favourability in today’s opinion polls.

But there is another measure to judge the effects continental free trade has had on Canada. It might be less visible than today’s public and political posturing of Canadian nationalism, but it reflects how Canada has changed since the advent of free trade with the U.S. as part of what was the arrival of broader globalization.

In the original free trade debate, the Canadian business community played a central and vocal role advocating for the trade deal. The then Business Council on National Issues was front and centre, as were individual senior business leaders in the financial, natural resource and energy sectors. There were some outliers who were less enthused, particularly in the cultural and air transportation sectors. But the point is business community voices were being heard loud and clear. There was little inhibition to engage in the political and economic debate and rally around the flag, however a business leader might interpret it.

Fast forward to today. In the face of crude economic threats from Trump, what seems remarkable is how measured and less prominent the voice of business has become. That’s not to say that business hasn’t taken a position on the challenge of trying to secure a new free trade deal with the U.S. It has, largely through the Business Council of Canada, which strongly advocates a stable trade relationship with the U.S. coupled with diversification. “When I say strategic diversification, I mean a ‘U.S. plus’ – not a ‘minus U.S.’ – trade and investment policy,” BCC head Goldy Hyder says. There is no mistaking the emphasis on not rocking the boat and doing what’s necessary to retain Canada’s special trade status with the U.S.

But what you don’t hear from senior business leaders are voices expressing the kind of resistance and resentment to the bullying and threats from Trump that is felt by the vast majority of Canadians. The reason relates to how the original Canada-U.S. free trade agreement has changed the culture and priorities of the Canadian business sector. We’ve witnessed over the last three decades the Americanization of large Canadian business, much of it driven by investment and expansion opportunities in the U.S. Long gone are the days of the Walter Gordons, Ted Rogers and K.C. Irvings, when Canadian economic nationalism represented a strong current of thought within the business community.

Forty years ago, like today, the captains of Canadian industry were mostly located in the natural resource and financial sectors. In those days, their focus was largely on the Canadian market. Other than telecommunications, which remains shielded from foreign competition by government regulation, the banking, natural resource and parts of our transportation sector have dramatically taken on a U.S. identity. Simply put, there are fewer national champions and they are less national in terms of their shareholders and their market share in Canada. This has created a situation where the fiduciary responsibility of the corporate sector pushes it to avoid, and at least not aggravate economic and geopolitical issues between Canada and the U.S.

Consider the Canadian banking sector. By the late 1980s, it had reached the limits of growth serving solely the Canadian market. With globalization and free trade opening new markets, it saw the U.S. as a huge growth opportunity. A prime example is TD Bank. Today it has more than 1,100 bank branches in the U.S., compared to 1,060 in Canada. TD’s revenue in 2025 was evenly split between the two countries and it is reported to be the 10th largest bank in a country with more than a 10 times larger economy. TD is also considered the third-largest retail bank in New York. Other Canadian banks, RBC, Scotiabank, CIBC and BMO have pursued their own aggressive expansion into the U.S. Business Profile In the case of Scotiabank, it has also expanded heavily into Mexico and Latin America. Scotiabank: Leveraging Scale And Reach To Create Global Connectivity

In terms of natural resources, and in particular the energy sector, Canadian oil and gas companies are now deeply integrated into the U.S. market. Enbridge is a prime example. As a result of its acquisition of U.S. energy assets, Enbridge moves about 30% of the crude oil produced in North America, transports nearly 20% of the natural gas consumed in the U.S. and operates North America’s largest natural gas utility by volume.

Enbridge has the world’s longest and most complex oil and liquids transportation system, with nearly 30,000 km of active crude pipeline across North America—more than half of it in the United States. Enbridge and the energy transition - Enbridge Inc.

Similarly, TC Energy is the midst of a US$8.5 billion expansion program. The company says: “For decades, TC Energy has helped power America’s rise, delivering the infrastructure that fuels growth, supports energy security, and connects communities. Today, we’re supporting the next chapter in America’s energy story,” It explains its U.S. capital allocation decisions in terms of stronger returns and faster permitting than in Canada. Energy for a Growing America

Other prime examples of the U.S. focus taken by major Canadian companies are Canada’s two historic railway companies. Almost five years ago, Canadian Pacific, bidding against CN Rail, purchased the Kansas City Southern rail network for US$31 billion to become CPKC Rail. CPKC - Canadian Pacific and Kansas City Southern combine to create CPKC Meanwhile, CN maintains an extensive US rail network that carries goods from Chicago and the U.S. Midwest to the Gulf of Mexico.

Canadian investment in the U.S. comes into greater focus when considered in the aggregate. Canada is the largest foreign investor into the U.S., with Canadian capital going south over the last nine years exceeding flows north into Canada. After 30 years of massive growth, total Canadian investment in the U.S. now exceeds $1.25 trillion. The Daily — Foreign direct investment, 2024

This geographic expansion by the business community has yielded important dividends to the Canadian economy. But where John Turner described Canada in terms of having been built “east and west and north,” south is just as important today. In fact, trade with the United States is significantly larger than interprovincial trade.

As a consequence, Canada’s cross-border companies are more muted in expressing their Canadian identity in the face of the Trump administration’s challenges to Canada’s economy and sovereignty. The economic nationalism that was once proudly expressed by business leaders seems missing in action four decades later.

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