How Trump's foreign policy could shape Canada's approach to aid, trade and intel

Attendees listen to a virtual speech delivered by U.S. President Donald Trump at the annual meeting of the World Economic Forum in Davos, Switzerland on Thursday, Jan. 23, 2025. THE CANADIAN PRESS/AP-Markus Schreiber

OTTAWA — U.S. President Donald Trump’s “America First” changes to foreign policy could have drastic consequences for Canada’s approach to aid, trade, intelligence and diplomacy.

David Perry, president of the Canadian Global Affairs Institute, said that while the implications of the policy shift in Washington are still shaking out, it’s clear Ottawa will need to spend more and act quickly to defend its interests.

“We’ve got to be able to move fast, not just announce things fast,” he said.

Here are seven ways Canada’s approach to the world — and its place in it — could change during Trump’s second presidency.

1) Foreign aid

Trump has ordered a 90-day freeze on foreign aid to determine which of the United States' thousands of humanitarian, development and security programs will keep getting federal funding.

“We are rooting out waste. We are blocking woke programs. And we are exposing activities that run contrary to our national interests,” says a Monday news release from the U.S. State Department that targeted programs funding abortion.

Trump has pulled the U.S. out of the World Health Organization, which helps monitor for emerging pandemics and funds projects to prevent them.

Perry said that with the U.S. pulling back from United Nations agencies and some aid programs, authoritarian states like China are likely to fill the gap and gain more influence over how the world responds to pressing issues.

That could further undermine the rules-based international order that Ottawa has worked to shore up over the years.

2) Refugees

Fen Osler Hampson, a Carleton University professor and president of the World Refugee and Migration Council, said the Trump administration is “essentially sealing off the U.S.-Mexican border” for asylum claims while ramping up deportation raids and flights.

He said this will have “a cascading effect” on Canada at a time when wars and climate change have driven the number of displaced people worldwide to a record high.

Immigration lawyers have warned that Trump’s policies could void the Safe Third Country Agreement, a Canada-U.S. pact that blocks most asylum claims from people leaving the United States on the assumption that the U.S. is a “safe” country for migrants.

Hampson said some asylum seekers will try to make it across the border into Canada, while global agencies might call on Canada to resettle more refugees — even as the federal government works to curb immigration to ease the housing crisis.

Hampson said Trump might terminate programs launched by the Biden administration that promoted governance reforms and job creation in Central American countries to discourage people from fleeing to the U.S.

Leaders in Haiti say U.S. deportations and cuts to aid could be “catastrophic” and further fuel the gang violence that has caused thousands of Haitians to flee their homes.

3) Feminism and equality

The federal Liberals have embraced a feminist foreign policy and built on the Harper government’s national action plan on women, peace and security, which promotes gender equality in armed forces worldwide and preventing sexualized violence.

The Trump administration is bent on ending diversity, equity and inclusion (DEI) policies. Hampson said the president could see Canada’s promotion of these causes as an irritant.

Perry said that this could affect the outcome of the G7 summit in June, which Canada is hosting. Trump has been invited. Last year’s G7 communiqué included clauses on gender equality, disabilities, climate change and universal health coverage.

“I have a hard time thinking that the American administration would be eager to sign up to a statement that looked like that,” Perry said.

4) Trade diversification

Canada is facing “a national and global reckoning with Trump,” Hampson said — a choice between deeper economic ties with the U.S. and a loss of independence, or a push to ramp up trade with countries in Europe and the Pacific Rim.

Conservative MP Randy Hoback wrote in his Substack newsletter that the Harper government tried with limited success to get Canadian businesses to take advantage of the trade deals Ottawa signed with numerous countries.

“Canadian businesses have a unique opportunity to reduce our near-suffocating reliance on the United States, and the coming years may be that very moment,” he wrote on Jan. 14.

Perry said that’s a tall order.

“The Canadian reality, basically since Confederation, has been a series of attempts, that have largely failed or underwhelmed, to diversify out of linkages with the United States either in a security context or an economic context,” he said.

But Foreign Affairs Minister Mélanie Joly said Monday in French that Canada’s trade deal with the European Union is “very important and is part of our vision for diversifying our markets.”

5) Intelligence

As a member of the Five Eyes intelligence alliance, Canada might need to fill gaps in American reporting, according to a recent episode of the Secure Line podcast from the Canadian Association for Security and Intelligence Studies.

Jessica Davis, head of Insight Threat Intelligence, said that much of Canada’s counterterrorism work is driven by American leads. “Our U.S. partners often identify to Canadian authorities individuals who might be acting in Canada,” she said in the podcast episode released Jan. 26.

Davis said she expects the Trump presidency will lead U.S. intelligence agencies to focus less on the threat of ideological violent extremism, despite a rise in far-right groups.

“I think we’re going to see a lot less of that leads-identification from our U.S. counterparts, so Canadian authorities are going to have to take on more of that responsibility,” she said.

She said that while signals intelligence is often shared automatically among the Five Eyes partners, human intelligence — reports from spies, informants and military attachés — is “disseminated based on who has a need to know.” The flow of intelligence from Washington to Ottawa, she said, could vary based on whether Trump sees the subject as a legitimate security threat.

University of Ottawa national security expert Thomas Juneau said Trump loyalists — such as his proposed FBI chief Kash Patel and his nominee for national intelligence director Tulsi Gabbard — “are a lot crazier this time” than those in his first administration.

That could shape how the U.S. gathers and uses intelligence, Juneau said.

6) Ukraine

While Prime Minister Justin Trudeau has made support for Ukraine a primary foreign policy initiative, Trump has been ambivalent on how he wants the war to end.

Last week, Trump said Russia will decide when the war ends — and also threatened damaging sanctions on Russia if it doesn’t end the fighting.

“Ukraine is right now a cork bobbing on an ocean of confusion,” Hampson said.

He said Canada might ramp up its existing campaign to get countries to seize Russian assets and bank holdings in Europe, and use the revenue for Ukraine’s defence — especially if the U.S. stops or slows funding for that defence.

“We have a very large Ukrainian diaspora that doesn’t want to go soft on Ukraine. But without American support, particularly military support, there’s no one that can really pick up the slack,” Hampson said.

7) Security spending

Trump recently called for members of the NATO military alliance to spend at least the equivalent of five per cent of national gross domestic product on defence — up from the two per cent guideline NATO set in 2014.

Canada has never met that original target and Perry said there is still no credible plan to get there, despite the Liberals saying they want to meet the target in 2032, or even 2027.

He said Trump’s musings about a five per cent target — a benchmark not even the U.S. meets — is “in part bluster” but shouldn’t distract from the need for NATO allies to spend more on their defence.

“We have been and are overly reliant on the American security umbrella,” Perry said, adding that allies' patience with Canada’s underfunding of defence has worn thin.

Hampson pointed out that NATO’s requests for more member state spending on defence come as Trump expresses “21st century imperial ambitions” of making Canada a U.S. state, a goal he repeated last week to the World Economic Forum.

“It may be a joke the first time,” he said. “When he says it to an international forum in Davos, it means he’s got something up his sleeve.”

This report by The Canadian Press was first published Jan. 31, 2025.

Dylan Robertson, The Canadian Press