US-Canada Trade Deal Is Within Reach in 2026, Ontario Envoy Says

Article content

(Bloomberg) — Ontario’s representative to the US said he’s confident an agreement to resolve trade frictions between Canada and the US is possible in 2026. 

Article content

“I think yes, we’ll get a deal,” David Paterson said at an Ontario Securities Commission event in Toronto. “I would even venture to say that if we want it, it might happen this year.”

Article content

Article content

The US-Mexico-Canada Agreement is set for a review this year, and President Donald Trump’s administration has signaled that it’s looking for a series of concessions and changes from its North American partners. Canada and Mexico, meanwhile, want the US to back down on tariffs on aluminum, steel and autos. 

Article content

Article content

Ontario, which has a larger economy and population than any other Canadian province, is home to all of the country’s automotive assembly plants and much of its steel industry. 

Article content

Article content

Paterson said it’s good news that Canadian policymakers are well aware of US trade irritants, such as access to the dairy market, digital taxes and rules around car parts. 

Article content

Mexico will begin its bilateral negotiating round the week of May 25 in Mexico City, a date set after US Trade Representative Jamieson Greer met with Mexican President Claudia Sheinbaum and Economy Secretary Marcelo Ebrard on Monday. 

Article content

Paterson suggested Canadians shouldn’t worry that there’s no date yet for US negotiations. “Mexico is a much harder list than we are, so it makes sense that they’re further along,” Paterson said. “You’re dealing with cartels, you’re dealing with borders, you’re dealing with all kinds of really important things.”

Article content

Paterson, a former General Motors Co. executive, said he believes pressure from American businesses, which are seeing higher costs as a result of tariffs, will help Canada’s case. As for the auto sector, it’s still reliant on cross-border supply chains — and Canada remains the largest export market, by far, for US-made cars and trucks. 

Article content

Article content

“It would be the equivalent of closing down four full auto plants and seven times that in parts if we denied them access to the Canadian market,” Paterson said of the US. 

Article content

But he said there’s more to be gained by having trade peace. 

Article content

“We can either turn our back on the United States and have the big hedge, or we can engage with the United States,” he said. And a deal will “be the biggest lift in the American economy that you could possibly come up with before the midterms. To me, that’s a compelling reason for the president of the United States to say, ‘Okay, let’s get busy and let’s get a deal.’”

Article content

In response to a question about whether he trusts China or the US more to honor trade commitments, Paterson chose the latter.

Article content

“I find it staggering that I’m sitting here being asked,” he said. “My vote: I’d rather stay with the guys that we’re geographically hooked to and the guys that, when the chips are down, will be there to protect us.”

Article content