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By Dean Brown.
Good morning,
For decades, Canada built its economy around one huge advantage:
easy access to the United States.
That relationship is still incredibly important.
But Canada is starting to build more options.
Europe is becoming a bigger partner in defence, technology and critical minerals.
Canadian lumber is facing a much higher wall at the U.S. border.
And some Canadian car buyers say they are willing to wait for Chinese EVs instead of buying what is available today.
None of this means Canada is walking away from the United States.
It means Canada is starting to see what a more diversified economy could actually look like.
Canada and Europe Are Getting Much Closer
Canada and the European Union are preparing for an October 29 to 30 summit, and a draft joint statement obtained by Canadian Press points to a much deeper relationship.
The draft reportedly includes:
greater access to European cloud and AI contracts
Canadian participation in Europe’s Galileo satellite system
more European investment in Canadian critical minerals
plans involving 50 Canadian-built De Havilland water bombers
The important caveat:
It is still a draft.
The summit has not happened yet, and the final agreement could change.
But the broader direction is already clear. Canada and the EU have been deepening cooperation in areas including digital trade, defence procurement, critical minerals and economic security.
The Galileo piece is especially interesting.
Europe built Galileo partly so it would not have to depend entirely on an American-controlled navigation system.
If Canada becomes more integrated with Galileo, this becomes more than trade diversification.
It is also:
strategic infrastructure diversification.
The goal is not replacing the United States.
It is making access to one country less indispensable.
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America’s Lumber Wall Is Getting Higher
Canadian softwood lumber entering the United States now faces a combined trade burden of roughly:
34.75%
But that is not one giant new tariff.
It is several measures stacked together:
14.11% countervailing duty
10.64% anti-dumping duty
10% Section 232 tariff
The dispute itself is old.
American producers argue Canadian lumber receives an unfair advantage because much of Canada's timber comes from provincial Crown land.
Canada disputes that and has challenged U.S. calculations for years.
This fight has survived several U.S. administrations.
The more interesting question is:
Who pays?
Canadian producers can absorb some of the cost.
Mills can reduce production.
Some facilities can close.
But U.S. builders can also face higher lumber costs if tariffs make Canadian supply more expensive.
That does not mean a 35% lumber duty makes a house 35% more expensive.
Lumber is only one part of construction costs.
But restricting a major source of supply can still put upward pressure on building costs.
For Canada, the biggest pressure falls on forestry communities already dealing with high costs, mill closures, fibre shortages and weak market conditions.
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Are Canadians Actually Waiting for Chinese EVs?
This one surprised me.
An Abacus Data survey commissioned by Clean Energy Canada found 48% of respondents said they were considering an EV for their next vehicle.
Among that group:
42% said they planned to wait until more Chinese vehicles became available before buying.
There is an important distinction.
That does not mean 42% of Canadians are waiting for a Chinese EV.
It means 42% of the people already considering an EV said they may wait.
Still, that is a meaningful signal.
Canada also changed its Chinese-EV policy this year.
The previous 100% surtax was replaced with a controlled quota allowing 49,000 Chinese EVs per year to enter at Canada’s normal 6.1% tariff, with the quota increasing over time.
That is still less than 3% of Canada’s new-vehicle market.
So Canada is not throwing the doors wide open.
This is controlled entry.
The bigger effect could be competition.
If enough Canadians are willing to wait for cheaper Chinese vehicles, existing automakers may have to respond with better pricing, features or financing.
You would not necessarily need to buy a Chinese EV to benefit from that competition.
One caveat: Clean Energy Canada commissioned the survey and supports faster EV adoption.
Consumer intentions are also not the same thing as actual purchases.
Price, financing, insurance, charging, resale value and service networks will ultimately decide what Canadians buy.
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Quick Things Worth Knowing
Pacific Link has its first serious consultation challenge.
Ottawa says it consulted more than 110 Indigenous communities and organizations before listing the pipeline as a Project of National Interest.
Cold Lake First Nations is now seeking judicial review of that decision.
The key distinction is that Ottawa says consultation was completed for the listing decision. More consultation is still required before later project conditions are finalized.
Alberta is not voting to leave Canada on Monday.
Question 10 is non-binding.
Voters are deciding whether Alberta should remain in Canada or whether the government should begin the legal process required for a possible future binding separation referendum.
Even a future successful separation vote would trigger negotiations, not automatic independence.
Ontario has now fined SeatGeek a total of $47,500 in publicly listed administrative penalties.
Ontario law prohibits live-event tickets from being resold above the original all-in purchase price.
SeatGeek argues that identifying the original price can be difficult when tickets have already changed hands or came through packages such as season tickets.
One thing before I go…
I think there is a bigger story developing here.
For years, Canadians talked about U.S. dependence as though it were simply something we had to accept.
Now we are starting to see actual behaviour change.
Ottawa is building deeper European relationships.
Canadian companies are dealing with higher U.S. trade barriers.
Canadian consumers are showing interest in vehicles that would slightly diversify where we buy from.
None of this means Canada is replacing the United States.
We probably could not even if we wanted to.
But relying less on one customer, one supplier or one market gives Canada something valuable:
options.
Until next time,
Dean
P.S. Which one should I dig into next: Canada-Europe, Chinese EVs or the softwood-lumber fight? Hit reply and tell me.