(OTTAWA) The Republican wave in the midterm elections in the United States finally did not materialize two weeks ago, contrary to what many observers expected.
Donald Trump was counting on this wave to give impetus to his campaign in order to run again for the votes in the presidential election of 2024.
Even though the Democrats limited the damage by retaining control of the Senate and the Republicans won a narrow majority in the House of Representatives, Donald Trump confirmed his candidacy last week. In the circles of power in Ottawa, there is fear of a return of the ex-president to the White House. And we prepare for it cleverly, in case the unthinkable happens.
“We must build an economic fortress in North America. And we must lay a solid foundation for it by 2024, ”drops a high-level government source, who requested anonymity in order to be able to speak more freely about this file.
Concretely, the purpose of such a fortress is to strengthen the supply chain between the two countries in strategic sectors to such an extent that it would resist the mood swings of an unpredictable and impetuous president.
A trio of ministers are working on this strategy: the Deputy Prime Minister and Minister of Finance, Chrystia Freeland, the Minister of Innovation, Science and Industry, François-Philippe Champagne, and the Minister of Natural Resources, Jonathan Wilkinson.
Together, they strive to show American leaders, investors and business leaders that Canada has the critical minerals and metals needed for tomorrow’s electric cars, cellphones and new technologies, among other things. Better still, they remind us that Canada can supply factories with clean energy such as hydroelectricity.
In this regard, Minister Chrystia Freeland’s speech last month in Washington at the Brookings Institution takes on its full significance.
In this speech, which had echoes in many foreign capitals, the minister took up a concept first mentioned by the Secretary of the Treasury of the United States, Janet Yellen, “friendshoring”. This concept invites allied countries that share the same democratic values to establish a supply chain that will reduce their dependence on authoritarian regimes such as Russia and China.
However, it turns out that Minister François-Philippe Champagne has been advocating for the regionalization of supply chains for almost two years, following the COVID-19 pandemic. This health crisis has highlighted the importance of reducing the heavy dependence of Western economies on China. The invasion of Ukraine by Russia has reinforced the need for this approach, which reverses decades of globalization of trade.
“The integration of supply chains in North America is irreversible,” maintained Minister Champagne in an interview with The Press.
There is a big movement. Supply chains that were global are becoming more regional. There is more emphasis on resilience than efficiency.
François-Philippe Champagne, Minister of Innovation, Science and Industry
Changing supply chains is a long-term job for companies and, by extension, governments. “But when they change, it becomes irreversible. And I think it goes well beyond the administrations in office, ”he said.
“I would not see, strategically, how it could serve the Americans to backtrack. This is even more true today as a transition in major sectors such as aeronautics, automotive, biomanufacturing, etc. Since the election of Joe Biden, we have really integrated. And we are in the process of bringing other crucial elements into the supply chain. The more we do this, the more indispensable we become in this vision of “friendshoring”, “he submitted.
According to him, this reorganization of supply chains works in Canada’s favor on several fronts. “We have proximity to resources, proximity to markets and proximity to assembly plants. This is also a message that he hammers home in Washington. According to him, if the United States wants to reduce its dependence on China and increase its resilience, Canada becomes essential. “The critical minerals are here in Canada,” Mr. Champagne said again.
“Friendshoring”
The Minister gave a concrete example of “friendshoring” which is well under way on the North American continent: the Rio Tinto Fer et Titane plant in Sorel-Tracy, which produces scandium. This critical ore is used to increase the resistance of certain metals, including aluminum, and is therefore essential for aeronautics, the military sector, 3D printing or telecommunications.
“We envisage that 100% of Sorel-Tracy’s production will go to the American industrial-military complex. So, in their case, titanium and scandium will come from Quebec instead of Russia or China. This is a concrete example that resonates in Washington. »
Minister Champagne also cites the manufacture of semiconductors as an example. In September, President Joe Biden inaugurated the construction of a semiconductor factory in Ohio where Intel plans to invest 20 billion dollars. The president then argued that the manufacture of these electronic components found in vehicles represented a matter of “national security” against China.
With a view to a reliable and secure supply chain, Mr. Champagne believes that it would be in the Americans’ interest to carry out the testing and packaging of semiconductors at IBM’s Quebec plant. in Bromont.
“We have the Detroit-Windsor corridor for the automobile. We can do the New York-Bromont corridor for semiconductors. We are building strategic chains. »