This is Canada’s carpe diem -- an historic moment to build a new economic model that is national, resilient, sustainable, modern, and green. Transitioning away from trading with the US to a pan-Canadian trading model from coast to coast to coast can be quickly implemented by transforming our soft and hard infrastructures, especially for energy when it is combined with conservation measures.
Strengthening Canadian internal trade and soft infrastructures
The Trudeau government’s lightning response was to shore up the domestic economy by increasing competition and productivity for Canadian businesses from the immediate removal of a significant number of provincial trade barriers, the soft infrastructures, that will add $200 billion to the more than $530 billion worth of goods and services that moved across Canada in 2024. This was done a month after Trump’s inauguration on 20 January 2025. The additional removal of the 20 federal exceptions to the Canada Free Trade Agreement (CFTA) means that 64% of the federal exceptions have been removed by the federal government since its inception in 2017.
The provinces and territories have to do their part to facilitate trade, labour, and regulations across Canada, and work cooperatively to connect the hard infrastructures that transport energy and goods across the country.
Realigning and renewing our hard infrastructures such as electrification
Energy has been a big part of Canada’s trade with the US for more than sixty years when Canada had an over-abundance of resources and a small population. With taxpayers’ money, the government invested in the expensive and expansive infrastructures for transportation, electrification, and pipelines that were often built at a loss of hundreds of billions of dollars for the privilege of selling raw materials, energy, and goods to the US, often at a discounted price; but these investments provided good Canadian jobs, and businesses benefited from access to the larger market, and having income outside of the purview of the CRA.
When Canada proposed the terms of the Canada-US Auto Pact that was signed on 16 January 1965, it mostly benefited Ontario, which became Canada’s manufacturing hub. To support that growth, Ontario Hydro built 4 nuclear power stations and 130,000 km of transmission and distribution lines that eventually bankrupted the crown corporation that had been started by Sir Adam Beck in 1908.
In addition to the excessive costs and time overruns, knowing there had been several nuclear accidents at the Chalk River facility, the ongoing escalating costs and dangers from operating the nuclear reactors left Ontario Hydro bankrupt with a $40 billion debt and sell-off by the Harris government in 1998. The “debt retirement charge” on every electricity customers’ bills took decades to repay the $40 billion debt. However, regardless of the industry’s current slick marketing, the concerns and costs about nuclear energy still remain today, and its legacy remains an unfunded financial and safety liability.
Even before Trump, it was clear the Auto Pact had run its course. At its peak in the early 1990’s, there were 175,000 workers directly employed whereas by 2021, it was 117,000 with several actual, and threatened plant closures. Competition from cheaper labour markets abroad, and the use of more automation have further eroded the number of workers in Ontario’s automotive sector.
Facing Trump’s threat, it is clear that more nuclear energy is the wrong way to go as it is not needed in the modernized pan-Canadian energy model. What Premier Ford needs to do is tear up another Ontario government contract, but this time it’s to stop the building of the SMR nuclear reactors.
The realignment of hard infrastructures can be done quickly and cheaply
To protect Canada against Trump’s economic and sovereignty threats, Canada needs to swiftly dismantle the old infrastructures that transport energy to the US, which will also create thousands of Canadian jobs. The government of Canada’s North American Energy Map shows there are 25 cross-border transmission lines, and also 27 natural gas (methane) and 20 liquid (petroleum) pipelines.
By redirecting the infrastructures from the US to connect from coast to coast to coast in the new pan-Canadian economic model, there is more than enough energy that only needs to be connected. For electrification, new nuclear reactors are not needed. Consider that Quebec’s separation bid was viable because it was generating enough revenue selling its hydroelectricity from James Bay to New York. Ontario often sells its excess electricity from the nuclear baseload at a loss to the Americans. Most of Canada’s energy exports sold to the Americans are resold at a profit because Canada has been in a captive position, but that can change now.
For electrification, the energy generation systems and infrastructures that we have are old, and were built when conservation and efficiency were irrelevant so as a result, about 75% of the energy generated is wasted. Trump’s threat is the opportunity to rebuild with new technology that is smaller, more efficient, resilient, and better.
Energy conservation has not been discussed, but it needs to be if we are to be responsible for our immediate energy needs during this transition, and also plan for the next sixty years. This is the opportunity to assess our current energy needs and look at ways to conserve energy instead of just replacing the old infrastructures that may no longer be needed. This is also an opportunity to look at things with fresh eyes taking into consideration the severe weather events and other environmental issues that we’ll be facing. We need to make our energy generating systems and infrastructures more decentralized, resilient, and cheaper.
Renewable energy such as wind and solar are the cheapest and fastest types of energy generation to install and operate. Renewable energy is also at the forefront of modern technology for decentralized energy generation and storage. These important features make Canada’s new pan-Canadian energy realignment possible. If funding is needed, the Canadian public and private sector pension funds are always looking for long-term investments, and investing in Canadian hard infrastructures at this time would be appropriate.
It makes sense for Canada to seize the day and disengage from the US as a trading partner to be more self-reliant because it offers more stability and certainty for investors, businesses, and governments. Not knowing how a mercurial president is going to act is worse, but what is certain is that he has had no qualms in destroying a friendly country’s economy.
Sharolyn Mathieu Vettese
President
SMV Energy Solutions
www.smvholdings.com
SMV Energy Solutions provides simple smart solutions that conserve energy