VANCOUVER — A strong economy is allowing Canadian officials to push for a better deal in negotiations on the North American Free Trade Agreement, Finance Minister Bill Morneau said Tuesday.
Talks on the deal are "critically important" but Canada will remain firm in getting the best possible agreement, he told the Business Council of British Columbia.
"Are there challenges? Yes. Do we need to be prepared to deal with them? Yes. We think that having our economy in the best possible position is the place from which we can do that, make decisions in a measured way, considering all the facts at hand," he said.
The government's latest budget included measures to expand trade around the world, particularly in Asia, and the financial plan is fiscally responsible, which means Canada can hold out for a better deal on NAFTA, Morneau said.
"We are going to continue to put forth why we don't agree with some ideas that were put forth on the table by the United States. We've been pretty firm in that approach. We think that Canadians support us, that getting to a better deal is the way we should address this."
Ottawa is taking a similar approach to possible U.S. plans for tariffs on steel and aluminum imports, arguing Canada should be exempt from them, Morneau said, adding the tariff issue shouldn't be linked to the free trade deal, as President Donald Trump suggested Monday.
"From our perspective, the way to deal with a partner, to deal with our neighbour, is to be constructive," Morneau said later after an event at the University of British Columbia. "We're going to continue to be strong allies of the United States, we're going to continue to be neighbours. And we're taking that as our frame to negotiate for better outcomes."
Conservative MP Erin O'Toole couldn't be reached for comment but in a statement he said he found Mourneau's comments on tariffs and NAFTA "troubling."
"To suggest a failure of NAFTA or a trade war would not have a major impact on Canada is naive," he said. "It's deeply concerning that (Prime Minister Justin) Trudeau unveiled a federal budget that doesn't contain a contingency plan if NAFTA is terminated, or promote policies that make Canada a more attractive place to invest and do business."
Mourneau said challenges to the economy come from within Canada as well, including the ongoing battle over the future of Kinder Morgan's Trans Mountain pipeline expansion between the Edmonton area and Metro Vancouver.
"I'll acknowledge that the current challenge between B.C. and Alberta is one of those frustrating things that happen in a democracy, but we need to deal with it," he said.
The skirmish began when B.C. proposed limits on shipments of diluted bitumen, a move that Alberta said would effectively kill the $7.4-billion project. Alberta retaliated by banning imports of B.C. wine, but called off the boycott when Premier John Horgan announced B.C. would ask the courts to decide whether it has the authority to bring in the restrictions.
Morneau said the battle is unlikely to sway foreign businesses looking to invest in Canada.
"As international investors look to Canada, I think they see positives. Democracy is a positive, which sometimes presents some messy aspects. That's positive," he said.
He said the federal government is overhauling the approval process for similar projects. The changes are aimed at giving potential interveners an opportunity to voice their views as early as possible and implementing timelines that will give businesses certainty.
"What we can say is that the previous process wasn't working," Morneau said.