The review of the Canada-U.S.-Mexico Agreement (CUSMA) that begins this week carries significant implications, particularly for provinces like Alberta. While the full complexity of the negotiations cannot be captured in a single op-ed, three critical aspects stand out for understanding the stakes.
CUSMA does not die if talks fail
Contrary to popular belief, the failure to reach an agreement on extending the treaty in July would not kill CUSMA. Instead, the agreement would continue under an annual review mechanism, effectively lumbering on like a zombie—neither dead nor fully alive—dragging uncertainty with it. To actually terminate the deal, a country must give six months' notice, after which the agreement remains in force between the remaining two members.
According to Carlo Dade of the Calgary Herald, this possibility of ending the agreement is not new; it has existed in every trade agreement Canada has signed with the United States. What has changed is the public's awareness of this feature.
Two parallel negotiations underway
The review encompasses two distinct but related negotiations. The first is the CUSMA review itself, which is quietly evolving into a renegotiation focused on changes that do not require ratification by the U.S. Congress or Parliament. These include adjustments to supply management provisions that predate a Canadian law preventing new negotiations on the topic, as well as modifications to labour rules.
The second, parallel negotiation concerns the imposition of tariffs without congressional approval. In February, the U.S. Supreme Court struck down emergency-powers tariffs imposed by the Trump administration on Canada and most other nations. The administration then reverted to a temporary tariff valid for 150 days while increasing its use of national-security tariffs.
Permanent tariffs likely despite renewed CUSMA
Barring a miracle, permanent tariffs are coming, and a renewed CUSMA will not prevent them. Evidence from the roughly 19 trade “arrangements” the second Trump administration has already struck with other countries shows a pattern: these are not traditional free-trade agreements but managed arrangements—ranging from formal agreements to frameworks to news releases—that exchange threatened high tariffs for “more reasonable” 10 to 15 per cent tariffs.
For Alberta, this presents a relatively favorable picture. Tariffs are not applied evenly across the country. Section 232 tariffs already cover 37 per cent of everything Canada sells to the United States, but the burden is wildly lopsided. Research at the School of Public Policy indicates that Ontario has 58 per cent of its U.S. exports exposed, Quebec 55 per cent, Nova Scotia 44 per cent, Manitoba 43 per cent, and British Columbia 35 per cent. These five provinces account for 95 per cent of the country’s exposure, leaving Alberta among the least affected.
