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With the escalation of the trade war of US President Donald Trump, the leaders of the federal parties are photographing Canadians on plans that could re -imagine the country’s economy and the basic supply chains.
But can they work?
Trump announced another round of tariffs this time on car imports, earlier in the week, prompting Prime Minister Mark Carney to stop his campaign as a liberal leader to focus on Canada’s response as the tariff date approached April 2.
Carney called for the construction of the “independence of the economy” in Canada by building the entire integrated Canadian supply chain.
Speaking to correspondents on Thursday, Carney said he had planned to “integrate” the Canadian supply chain after it was said that the “old relationship” in Canada with the United States “has ended.”
Carney said that the strategic response plan in Canada included “integrating the supply chain here locally”.
He said: “I am using a great term – backward from steel, in aluminum to help our steel and aluminum industries that are used, and I encourage me to integrate back into the critical minerals and minerals that we will develop.”
The concept of making more effort here at home is a concept that continues to appear in the campaign path.
Conservative leader Pierre Polilifer spoke on Friday about the increase in housing production in Canada, using Canadian wood, a sector that faces tariff threats.
“We can build millions of new homes with Canadian wood that will get workers in this mill and in the forests of Canada, they can make greater salaries, which they can bring to the homes they can buy,” said Poilievre.
“The National Democratic Party You will use “each legal tool” To prevent American companies “that took public funds (and) will not be allowed to be beaten by Canadian factories or shipping machines and tools that Canadians pay.”
A party statement says: “The National Democratic Party will explain that the federal departments and agencies-including Canada Post and RCMP- Canadian-made vehicles,” says a party statement.
“To support good jobs here at home, American companies that want to sell vehicles in Canada will be asked to use Canadian spare parts or collect some vehicles in Canada. Singh also committed to exempt Canadian cars and trucks from commodity and services tax to support local manufacturing and encourage Canadians to buy Canadians.”
What does “merging back” mean?
Irnan Haroyvi, Professor of Marketing at the Dishotils College of McGill University, holds a doctorate. In the economy, it is clear what the term “backward integration” means.
“The backward integration indicates only the integration between the different suppliers and the supply chain,” he said.
“Basically the completion of different parts of the supply chain in one coherent central unit doing everything.”
Carney said of his campaign as a liberal leader on Wednesday, before Trump announced the tariff of cars, Carney said that his government would build “a network all in Canada for car manufacturing components.”
Average car around it 30,000 individual pieces Which passes through several steps on the one supply chain.
Raw materials, such as steel and aluminum, are manufactured in one facility, made from another and added to the car part in a separate facility before making its way to the assembly factory to be installed inside the car before it comes out of the agency.
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According to one estimate, one part The border crosses seven to eight times Before collecting it in a car.
“The essence of this (plan) is the construction of the auto sector and the supply chain of cars in Canada as much as possible, instead of going to cars back and forth across the border six times and getting a tariff each time,” said Carney, who explains his plan to respond to Trump’s tariff.
The term “underdeveloped integration” may mean linking a later stage of the supply chain, such as a car assembly factory, with a previous stage, such as the steel, aluminum or critical mineral factory, so Canadian supplies in these strategic sectors become part of the supply chain for other strategic sectors.
“The backward integration, as I will understand it, is: Let’s start in the consumer and work slowly on our way back through the supply chain and make sure that the things closest to the consumer will be produced here in Canada,” said Moshe Lander, an economist at the University of Concordia, said, “The backward integration, as I will understand it, is: Let’s start with the consumer and work slowly on our way back through the supply chain and make sure that the things closest to the consumer will be produced here in Canada,” said Moshe Lander, Economist at Concordia University.
Can this be done in a modern economy?
Lander said it would be “very difficult” to have a separate supply chain in the modern economy.
“If we go back to the fifties of the last century, it is not difficult at all. But the fact is that since we have a free trade with the United States, Mexico and other countries, we realize that there are certain parts of the production process that we should not do,” he said.
Dennis Darby, President and CEO of Canadian manufacturers and exporters, said that the supply chain is very integrated, it would be painful for the industry to separate it from the industry.
Darby said: “Steel may be made in Canada, sealed in the United States and then returned it, it was assembled in a car here,” Darby said.
Drew Vagan, a professor at the Monk College for International Affairs and Public Policy at the University of Toronto, until the sixties of the last century, said the Canadian economy produced goods and services primarily for local consumption, as well as some exports to the United States and the United Kingdom.
“This has changed in particular with regard to cars in 1965 when Canada and the United States concluded a free trade agreement in the sector (auto agreement) and then changed more again in 1988 with the NAfta Free Trade Agreement,” said Vagan, a senior consultant in the McMillan Vantage Group.
Vagan was also a deputy assistant minister of strategic policy and planning at the Ministry of Foreign Affairs and International Trade, before it became Canada’s global affairs.
Lander said before the fifties of the last century, the car manufacturing process in North America was ineffective and ineffective. Cars were made in one factory, and they start at the end.
The height of the stock in a timely manner means that car companies did not need to store spare parts and thousands of factories, each focusing on two main parts or parts that grew up across the continent.
Trump’s trade war threatens to dismantle this simplified infrastructure.
Experts say it will take a great deal of investment to re -equip some companies and build the entire local industries.
“The entire companies need to restructure the way they run their operations,” Harvey said.
Flavio Volb, president of the auto parts manufacturing association, hopes that Canada will continue to obtain a car industry even with American definitions.
He said: “We do not have a huge market, but we have enough to provide our own request. All this is somewhat complicated (and it may take from 12 to 18 months to transfer the offer.”
Folp said that making everything inside Canada was the most expensive choice, but it is a good emergency plan if Trump’s tariff did not disappear.
Can Canadian aluminum make cans or bicycles here?
Harvey said that the idea of building an inner supply chain begins to look much easier when you think outside the car.
For example, many Canadian beer factories use cans that are manufactured in the United States using Canadian aluminum.
Although there are still several steps in the supply chain, the aluminum travels from Quebec to boxes before returning to Canada, it is not just like making the car.
“It may be possible to make boxes in Canada because they are now more economical due to the customs tariff to make these boxes in Canada more than sending aluminum to the United States to find and restore boxes,” Vagan added.
Haroy said that Canada’s competitive advantage is that it is a source of raw goods and intermediate goods. When it comes to consumer goods, Canada produces relatively little.
“We are not sources of ready -made commodities, we are importing ready -made goods. So, all those imports that we can replace with our own production. But it will take a great political pledge to whom the Prime Minister is to encourage local production.”
Recently, Vagan said that the Canadian economy has proven very smart and was able to convert to local production with one specific product – N95 masks.
He said: “We have seen during Covid, for example, that there is importance for Canada or other countries to produce their own masks.”
“We did not have mask producers. Suddenly, masks would become the issue of national security.”
