Jim Stanford is one of Canada’s leading economic commentators and thinkers. He spent 20 years as the director of policy at Unifor, Canada’s largest private sector union, and is currently the director at the Centre for Future Work, which conducts research on labour issues.

Stanford’s 2008 book Economics for Everyone: A Short Guide to the Economics of Capitalism, which was updated in 2015, is a guidebook for everyday people to sharpen their economic literacy and learn what it takes to build a fairer economy.

The week before U.S. President Donald Trump’s January inauguration, Christopher White spoke to Stanford about how the administration’s drastic trade and geopolitical decisions will impact our economy and what we need to do to stand on our own. At the time of publication, the United States had imposed 25-percent tariffs on a variety of Canadian goods (but later paused some) and Canada had responded by slapping 25-percent counter-tariffs on $30 billion worth of items from the U.S. This week, the U.S. hit Canada with additional tariffs on steel and aluminum and Canada retorted with more counter-tariffs worth $29.8 billion on American steel and aluminum as well as more U.S. goods.

CW: What impact will President Trump have on Canada?

JS: It’s hard to tell what is in his head at this point. It may be just bluster and threats to get what he wants, but the problem is that once he gets his first demand, he won’t stop, he will just threaten us again and again. And that is the optimistic view. The pessimist in me believes that he is serious about territorial expansion and actually wants Canada to be part of the United States and is determined for that to happen. We cannot rule that possibility out.

CW: Everything seems fragile right now. Should we be worried about our economy?

JS: I don’t think that people realize the fragility in our current economic system. Our banks are fragile and it wouldn’t take much to create a financial crisis. It could start with cryptocurrencies melting down or the real estate market crashing or a failure in the emerging markets. It is, I’m afraid, only a matter of time before something happens. We have built a system where the profit motive is a core part of the problem. Housing is a perfect example of this: by commodifying housing and allowing investors to drive the market, it totally distorts the system and makes housing unaffordable for working people.

CW: In your book Economics for Everyone, you write about socialism as a viable alternative economic arrangement.

JS: As I say in the book, capitalism is based on private greed and we only have to look at the current state of our world to see its failures. Whether it’s the climate crisis or the deprivation of millions of human beings in both the Global North and South, clearly, we need to do better. There is a new socialism arising in parts of South America, like Ecuador and Uruguay, and we should watch the results very carefully.

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CW: So what could a different economy look like in Canada and what are the steps to get there?

JS: One of the first steps is to increase unionization in the workplace. Without unions, there would be no middle class in Canada. The union movement is making important inroads in manufacturing and transportation. But right now there are too many places where the employer has all the power and we need unions to redress that balance.

Corporations have a huge advantage over workers today. In fact, they have never existed in such a pro-corporate environment. In 2022, the petroleum industry reaped over $60 billion in excess profits. The banking sector and housing scooped up similar profits that year. And let’s not forget Canada’s grocery chains also posted large excess profits. Working people are the ones who pay for these profits through higher prices, and then life becomes unaffordable for more Canadians.

We need to regulate corporate power, through the means of price controls, anti-monopoly laws and even public ownership of key parts of our economy. Our current system has engineered unemployment and has intentionally created the precarious jobs environment that so many face today. This is not accidental and we need to demand much better, especially full employment.

When it comes to housing, we have to move it out of the market as a place of speculation and profit making. We can build more non-market housing through the use of co-ops and community trusts. These trusts own the land or property as a nonprofit entity and can be funded by both government and social investors. The residents form the governance and build their own equity in the project. There is also a direct role for government to play, as a builder of public housing.

This is not a time for austerity, which makes us all poorer, but for investing in those key areas that benefit everyone. Given the record profits that corporations are making, not only in Canada, but around the world, they have the capacity through taxation to pay their fair share. Increased taxes on corporations are an investment in a healthy society, which benefits them as well.

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CW: This all seems achievable in a normal world, but our world is far from normal. What will be the impact of Trump’s tariffs and what do we need to do to respond to them?

JS: This is exactly the time that we need to take the steps I just outlined. But this doesn’t mean that we are not facing a huge challenge with Trump. What he is doing threatens both our economy and our actual sovereignty. Let’s start with understanding that his claims about Canada and the supposed trade deficit are bogus. Trump claims that the U.S. subsidizes Canada to the tune of $200 billion when in reality, we subsidize them. He changes the numbers constantly, but here are the facts. Trump never includes services as part of his calculations, which totally changes the numbers. Nor does he ever add in the $20-billion savings in below-market-price oil that the United States purchases from us annually.

The federal government’s plan has been a good response. But let’s do more, such as increasing the digital services tax to a full 25 percent to match his tariffs and look for other ways to impact the United States. [EDITOR’S NOTE: Canada has responded with counter-tariffs on billions of dollars worth of U.S. goods as well as American steel and aluminum].

We need to accept the reality that the old economic order has disappeared and we are in a new world. The result is that we will have to reorganize our economy to manage these changes. Trump’s actions have put a chill on investments in Canada and we need to act quickly.

CW: So what will we need to do to get through this?

JS: To start with, emergency measures will be needed to protect our exporters who are going to be hurt by these tariffs. We will need a new CERB-like support for workers impacted by job losses when American customers look for internal options to avoid these tariffs. But in the longer run, we are going to have to restructure our economy from north to south to east to west. Three-quarters of our GDP is not exported, which is very important to remember, and this is not the first time we have faced threats like these. We can create a new national policy, as we did back in the 1870s. This was done in response to an expansionist movement in the United States which threatened our sovereignty. While the economies are completely different, the threats are almost identical. This policy will need to include investment by Canadians for Canadians and will focus on our own infrastructure such as housing and social services. As I said before, we can even use a return to public ownership as an economic tool.

In the 1870s and 1880s, we built a national railroad to protect our sovereignty. Today, we could create a fully integrated electricity grid, among other things, to create an independent and viable economy.

Back in the 1980s I, with many other Canadians, protested the original free trade agreement and it turns out that everything we predicted would happen, has actually happened, such as the integration of our economy north to south and not east to west. That has resulted in the loss of sovereignty seen in the restriction on how much we can trade with other nations without the permission of United States in the Canada-United States-Mexico Agreement. The good news is that Canada will now have the chance to stand on our feet again. We have a G7 economy, 40 million people and amazing resources. There is no reason that we can’t build a fair and prosperous future for Canada.

This interview has been edited for clarity and length.

***

Rev. Christopher White is a United Church minister who lives in Hamilton.

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