(Bloomberg) -- Canada needs to be “super proactive” about the looming review of the North American free-trade agreement given that it’s a junior partner in the deal, its former central bank chief warned. 

Stephen Poloz, who was governor of the Bank of Canada during the 2018 talks that resulted in the US-Mexico-Canada Agreement, called the continental pact a essential “building block” that’s at the core of Canada’s investment and value proposition.   

“If we don’t have that tool as a little guy, we’re just not going to make it,” Poloz said Thursday in a BNN Bloomberg Television interview. The deal comes up for review in 2026, and Prime Minister Justin Trudeau’s government has begun mapping out its strategy — though much hinges on the result of the US election in November.

“We really have to invest a lot in that next negotiation,” Poloz added. “We shouldn’t be waiting in defensive mode, getting ready. We should be down there knocking on the door right now saying: ‘Here are our demands.’” 

Poloz is now an adviser at law firm Osler Hoskin & Harcourt and was tapped last month by Trudeau’s government to examine how Canadian pension funds can invest more at home. He noted that when former President Donald Trump first emerged as a candidate vowing to “rip up” the North American trade pact, investment in Canada began to contract.

With Trump now taking another run at the White House, the “uncertainty still hasn’t gone away,” said Poloz, who ran the central bank from 2013 to 2020.

Canadian companies are already diverting capital from their domestic operations to focus on existing and new projects south of the border, Poloz added, which has been a “drain” on overall investment.  

Asked about his pension review, he said his working group wants to see a “clear and level playing field” so is looking for barriers and impediments to investments within the country. “If we can make improvements in that, then we can increase the scope for pensions to invest in Canada,” Poloz said, adding that “they already do invest quite a lot in Canada.”


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