Jan 4, 2023
U.S. politics, China and COVID-19 could challenge Canada in 2023: Gerry Butts
Immigration is Canada's secret sauce: Gerry Butts
A polarized United States, a strained relationship with China and potential COVID-19 rebounds are among the global risks facing Canada in 2023, according to a former adviser to Prime Minister Justin Trudeau.
Gerry Butts, now vice chair at political risk consultancy Eurasia Group, said in a Wednesday interview with BNN Bloomberg that there is little policymakers in Canada can do domestically to ease global economic pressures, due to the size of the country’s economy.
He described Canada’s global dilemma as a “double-whammy,” with “a world that has no cohesive global leadership and a fractured United States.” Added to that is Canada’s still-tense relationship with China stemming from the 2018 arrests of Canadians Michael Spavor and Michael Kovrig after Chinese tech executive Meng Wanzhou was arrested in Canada.
Butts pointed to more stability in the U.S. after the midterm elections last fall as a “good sign for Canadian investors,” but noted that polarized politics in the U.S. will likely remain an issue into the next presidential election.
“The polarization in the United States hasn't abated,” he said.
Some of those trends have seeped into Canadian media and movements like the Freedom Convoy that occupied Ottawa last year, but Butts argued that Canadian politics has overall resisted the deep divisions that have emerged in the U.S.
Canada also stands out in the world in its approach to immigration, Butts said, pointing to record-breaking annual immigration numbers that contrast with the political resistance to immigration seen south of the border and in Europe.
“It's more than a labour market issue. It’s good for the country,” Butts said.
“I always describe it as Canada's secret sauce, the fact that we've been able to maintain immigration as a third rail of Canadian politics, that neither the left nor the right has organized an anti-immigration political movement, is one of the very best things we have going for us as a country.”
Despite movement away from strict economic COVID-19 controls that affected much for the world’s economy for the last few years, Butts also raised the virus as “yet another force for disruption,” particularly with the massive surge in cases in China amid the country’s swift reopening.
“If we end up in a situation where large manufacturing regions of China have to be shut down because people are sick and can't go to work, that's going to create all of the supply chain problems that we lived through during the height of the pandemic,” he said.
The “done with COVID” attitude held by most westerners could creep up on people yet, he added.
“We may be in for a few downsides, surprises because of that,” he said.