Québec Facing a New Economic Reality

Since Mark Carney’s election as Prime Minister, Canada’s political and economic dynamics have undergone a profound shift. Québec, which had long benefited from federal trade preferences, now finds itself in a relatively weaker position. The province’s growing budget deficit limits its ability to act both domestically and in its dealings with the federal government. This new reality is forcing Québec to reassess its priorities and adapt its approach, particularly in terms of economic diplomacy.

Historically, Québec has sought to play a distinct diplomatic role, asserting its uniqueness on the international stage. However, the current economic climate combined with the impact of President Trump’s tariff policies, makes this posture more difficult to maintain. The imposition of new tariffs on aluminum and steel will severely affect Québec’s economy, which partly relies on these strategic industries. The protectionist measures from the US are deepening the vulnerability of a province that is already struggling to balance its finances.

Moreover, Québec has failed to build strong enough ties with other provinces in recent years, particularly Ontario and Alberta. These two provinces, now in a position of strength, have taken the lead in negotiations with Ottawa. Québec, meanwhile appears increasingly sidelined in interprovincial discussions, and this marginalization further weakens its negotiating power amid economic transformation.

In this context, greater economic integration at the Canadian federal level appears not only desirable, but necessary. The recent tabling of a Québec bill aimed at simplifying interprovincial trade barriers is a step in the right direction. It represents an initial official recognition that Québec could benefit from a more fluid domestic economy—especially as this would help offset the impact of international trade tensions.

For the first time in decades, Québec is facing powerful incentives to liberalize its economy within the Canadian framework. By choosing to collaborate more actively with other provinces and ease internal trade restrictions, Québec could not only strengthen its own economy but also play a leading role in enhancing the country’s overall economic cohesion. Letting this opportunity slip away would be at the province’s peril.