The "51st State" Insult
December 30, 2024
President Donald Trump’s suggestion that Canada become America’s 51st state is totally off-base. For starters, a new State of Canada would be geographically as large as all 50 US states combined and more valuable. In 2013, I wrote a book called “Merger of the Century” about why the two countries should join forces, fully or partially. I worked with an investment banker to quantify the value of each nation’s assets. We used metrics provided in the CIA’s World Factbook and compared their respective GDPs; land and total areas, including offshore rights; debts; foreign reserves and gold assets; renewable resources such as water and farmland; and fossil fuel production plus proven reserves. In rough numbers, Canada was worth $16.943 trillion more than the US, equivalent to $492,529 per Canadian. Today, North America’s two democracies need not merge politically into one entity, which would be difficult, but can and should form an economic union as countries in Europe and other regions have done. If they do so, both will become richer and more secure.
The United States and Canada are compatible and complementary and already have become one another’s biggest customers, suppliers, and investors. Each has what the other needs: The United States has capital, manpower, technology, and the world’s strongest military; and Canada has enormous reserves of undeveloped resources and ownership of a vast and strategically important Arctic region. Collectively, they have more oil, water, arable land, and resources than any jurisdiction on Earth. But they have developed differently. Canada has a hostile climate and vast regions that are uninhabitable. Economically, it remained a sleepy British colony until 1867, then missed the Industrial Revolution until the Second World War when it retooled with America for the Second World War effort. It diversified, but has sputtered in the past decade. Prime Minister Justin Trudeau’s inept and anti-capitalist regime has governed, without majority approval, and neglected the economy, resource development, borders, and military responsibilities.
The two have become more economically entwined than ever since the Free Trade deal in 1988, but now need to bolster their relationship to realize synergies as well as to face increasing geopolitical challenges from China, Russia, and criminal elements. Canada’s security and border shortcomings angered Trump and resulted in his recent threat to impose 25 percent tariffs on Canada and Mexico. Both neighbors have become backdoor entries into the United states for drugs, crime, illegal migrants, contraband, and guns. Another concern is that Canada has virtually no military or naval presence in its Arctic, leaving the continent vulnerable to strategic hazards and attacks from predatory nations.
Trump taunts Trudeau about Canada becoming the “51st state” and calls him a “governor”. But an outright political merger would be difficult to pull off because the two have incompatible political and social systems. Canadians enjoy superior publicly-funded healthcare and safer streets due to stricter gun laws. These differences are why the best option is to adopt the European Union model because it would erase the border to enhance trade and investment, but allow each nation to retain its sovereignty and policies.
Many Canadians were offended by Trump’s 51st State suggestion, but “Shark Tank” TV star and wealthy Canadian financial expert Kevin O'Leary came out in support of a U.S.-Canada “economic union”. He told The New York Post: “So secure [the northern territories], give a common currency, figure out taxes across the board, get everything trading both ways, create a new, almost EU-like passport – I like this idea and at least half of Canadians are interested…Nobody wants Trudeau to negotiate this deal. I don’t want him doing it for me. So I’m going to go to Mar-A-Lago. I’ll start the narrative.”
Many will support O’Leary’s initiative, but a deal won’t happen if Washington holds a tariff gun to Canadian heads or if Trump, and Americans, fail to understand how valuable Canada is. It was insulting to dub Canada a prospect for mere statehood given its staggering resource base and geological potential. However, Canada must agree to clean up its act. Creating a customs union would require that Canada guarantee, and pay billions to provide, adequate security along its entire perimeter, including its Arctic region. And creating a monetary union would also involve tough negotiations over swapping Canadian dollars for U.S. dollars at an as-yet undetermined premium.
Mexico must be excluded from a full-blown economic union. Frankly, its involvement in the North American Free Trade Agreement since 1994 is why the United States and Canada have not already taken steps toward creating a borderless customs union or monetary union as have many European, African, and Caribbean countries. Currently, Mexico cannot participate because it is a failing state that has been unable to control corruption, criminal cartels, or its border.
An economic union will also better position these two countries geopolitically. China nibbles away globally, and Russia is a terrorist state that has declared that the Arctic is Russian. The smuggling of humans and drugs has been weaponized. Immigration reform is needed in both countries. Energy demands must be addressed. Crime increases. To meet these and other challenges, the status quo is not an option. By marshaling their economies, Canada and America will remain prosperous and be better able to protect their citizens and shared values from enemies, competitors, and predators.
Salient facts:
In 2023, Canada’s GDP was $2.173 trillion and America’s was $27.72 trillion
Canada’s GDP/capita was $53,607 and America’s was US$82,715
Unemployment was 6.6% in Canada and 4.2% in US as of November 2024
Population: Canada has 40,097,781 people and America 335,135,000
Healthcare expenditures in Canada are 11.2% of GDP and in America are 16.5%
Canada’s homicides in 2022 totaled 874 and America’s totaled 19,796 in 2023
Canada is 9,984,670 square kilometers in size and America is 9,826,675 square kilometers in size. (Russia is 17,098,242 square kilometers and China is 9,596,961 square kilometers.)
Total taxes collected in 2021 were 28.38% of the GDP in Canada and 19.96% in America. (One-third of Canadian tax totals pay for healthcare).
"For starters, a new State of Canada would be geographically as large as all 50 US states combined and more valuable." And therein lies the rub - Canada is the richest country in the Western Hemisphere yet it has not paid its way in defending itself as part of the larger Western effort. It supports no Navy, no Air Force, and no mechanized Army. And given that it is more valuable than the US, it does not even make the top ten in terms of military aid provided to stem the current invasion of Europe.
Agree with most comments - a very informative article today, Diane. I almost feel like waving the Canadian flag again but ----- when trDOPE leaves, the flag is up!!!