Strategic partner of choice: Canada’s role in enhancing North American supply chain resiliency

Canadian flag against a lake
Editor's note:

This is a viewpoint from the USMCA Forward 2023 report where experts dive into the opportunities and complementary actions needed to build more integrated, resilient, and secure supply chains in North America.

Cover art for USMCA Forward 2023, featuring images of transportation by ground, air, and sea.Around the world, the COVID-19 pandemic has exposed weaknesses in global supply chains. Changes to consumer demands, labor shortages, and other structural factors have created a perfect storm of bottlenecks and back-orders. Families and businesses around the world are feeling the impact, as the cost of consumer goods—food, energy, and everything in between—is rising. Russia’s invasion of Ukraine, as well as other major geopolitical challenges, have since compounded this already difficult situation.

In this climate of uncertainty, jurisdictions around the world are looking for stability and predictability. They are turning to their most trusted allies, choosing to localize manufacturing capacity in locations with partners who are reliable, safe, and secure. As members of the world’s largest free-trade zone, Canada, the United States, and Mexico know that they have no better friends than each other. Since 1994, free trade agreements among our three countries have raised the fortunes of all North American businesses, workers, and families, as our economies have become more integrated and prosperous.

By working together to improve the reliability and fluidity of our supply chains, we have a chance to seize the moment and enhance the overall North American value proposition–and each partner has a role to play. Domestically, Canada is making strategic investments in key sectors to make essential supply chains more accessible and secure. Our Critical Minerals Strategy, for example, is securing the key inputs in batteries and semiconductors needed to support the world’s transition to the green digital economy of the future. In world markets driven by demand for microchips and batteries, Canada’s critical minerals, coupled with our reputation as a safe, reliable, and secure supplier of goods and services, make us the strategic partner of choice. That is why we have already secured investments from globally leading companies, including battery manufacturers, and continue to put into place a domestic battery ecosystem that will help meet the global demand for cleaner transportation alternatives.

When I was in Washington recently for a meeting with U.S. Secretary of Commerce Gina Raimondo, we discussed, among other things, our commitment to improve supply chain security in North America, including in the semiconductor industry. This includes work to strengthen domestic research and development, commercialize emerging technologies and innovations, and ramp-up manufacturing capacity in both countries to support our mutual goals for supply chain resilience and industry competitiveness. The Canada-U.S. Supply Chain Working Group, launched in 2021, is also central to our efforts to strengthen supply chain security and reinforce the deeply interconnected and mutually beneficial North American economic relationship.

I was also pleased to launch the Canada-Mexico High-Level Economic Dialogue in August. This was an opportunity to discuss ways that we can strengthen our North American competitive advantage through enhanced collaboration and cooperation. We also discussed the importance of supply chain resiliency as a means of fostering a more collaborative business environment and working with the private sector to enhance economic ties. Strengthening our competitive advantages as USMCA economies also requires us to grow our shared innovation ecosystems. In this regard, we also discussed ways to increase research collaboration to meet the complex challenges of our age.

As a friend, neighbour, and trusted partner, Canada is well positioned to help strengthen North America’s supply chain resiliency and industry competitiveness. What is more, we can take pride in knowing that our highly-integrated North American economy, founded and built upon the principles of transparency, diversification, security, and sustainability, allows us to offer an excellent value proposition in world markets. Canada will continue working with like-minded partners—especially our North American friends and neighbours—to help build a cleaner, greener, and more resilient global economy that is founded on the principles of free and open trade that has served us all so well.