The Agenda with Steve Paikin (Audio) - How Will a Canada-U.S. Break Hurt Border Towns?

Episode Date: March 14, 2025

Since Donald Trump launched his tariff attack, towns and cities along the border between Canada and the United States have faced enormous economic and political challenges. Just how are the leaders of those communities dealing with the pressure of being on the frontlines of a trade war? Matthew Shoemaker, mayor of Sault Ste. Marie; Drew Dilkens, mayor of Windsor; Corinna Smith-Gatcke, mayor of the Township of Leeds and the Thousand Islands; and Jim Diodati, mayor of Niagara Falls, join Jeyan Jeganathan to discuss what they are seeing in their communities.See omnystudio.com/listener for privacy information.

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of Leeds in the Thousand Islands and Warden of the United Counties of Leeds in Grenville and Jim Diodati, the mayor of Niagara Falls. Welcome everyone to our studios and joining us on the line of course, Mayor Shoemaker, I'm going to start with you since you are the furthest away. Algoma Steel just recently laid off 20 people in Sault Ste. Marie because of the tariffs on steel and aluminum. Wondering how is the community reacting to that? Well we are expecting difficult times to continue for as long as the steel or aluminum tariffs are in place. In 2018-19 we saw this story play out for 11 months that steel and aluminum tariffs were placed on Canadian

goods and it was hundreds of millions of dollars out of the local economy. I would say the plant is in an even more precarious position this time around because we have made the decision or they have made the decision to transition from coal-based steelmaking to electricity-based steelmaking and they're right smack dab in the middle of that process. So they've got all the costs of the traditional way

of making steel and lots of the costs of the new way of making steel added on top of that is the 25% tariffs. So it is a difficult time for them and for the community at large to deal with that. Alright, Mayor Dilkens, we have to talk automotive of course. This is the automotive capital of Canada when we talk about Windsor. The area is going to be hit hard with respect to tariffs. How are the people in your city feeling these days? Listen,

there is a lot of angst out there right now. Folks are really just worried. The uncertainty is causing a lot of worry for businesses, for families, for workers. I think folks are cancelling vacations to the United States. They are starting to save their

pennies for the rainy day that they don't know whether it's going to come or not. But they see the clouds starting to fly overhead and they're getting ready for that So it's a it's a tough time here But you know, we're gonna make it through or we're used to ups and downs in manufacturing in the auto industry And we'll make it through this this trade war as well. All right another city that has you know Really close relationships to the border town is Niagara Falls. Of course Mayor Jaddi What's being felt in city that you know, we know boasts one of the province's most popular

tourist attractions? Well, Jane, the obvious is tourism, where Canada's number one leisure destination with upwards of 14 million people, 40,000 people count on tourism to feed their families. And typically 25% of the visitation does come from the US and they represent 50% of the revenue. And it's been a trend that's been going more toward the US coming because of the exchange rate. Last year was a record year for American visitation and this year with all the geopolitical things happening we thought potentially this could be a have it have your cake and eat it too kind of year. The fact that a lot of Canadians are doing

staycations and a lot of Americans are going to follow the exchange rate and come here and spend their money. So right now we're hoping that calmer heads will prevail, we'll come to terms and everybody will feel that fluidity of the border that we usually have. All right, Mayor Smith-Gatkey, you are part of a township that has roughly 10,000 people, but it's undoubtedly feeling the pressure. How are people in your community feeling right now? I think the main concern is much like Niagara Falls, we depend on tourism a lot, but we actually have a lot of Americans who own property here as well. So it's also that of managing them coming back up here in the spring to open their properties

and they put a lot of money into our economy. So our regular population would be 10,000, but we have, it swells a lot in the summertime due to the seasonal residents that come to join us. And we, luckily at this point, I have not heard of any layoffs in our region at the Port of Prescott or any of the manufacturing facilities that are at the crossing at Prescott or in our Gananoque area right here in the Thousand Islands. So I think people are really trying to ride this out because who knows what

tomorrow's news might bring. Tariffs might be gone, there might be double tariffs, nobody really knows and it's just the uncertainty that's really bothering everybody. All right as mayors it's important to keep your communities together that's priority number one but on the other hand you are making decisions that hopefully have some effect on the other side and get people to notice. you are making decisions that hopefully have some effect on the other side and get people to notice. Mayor Dilkens, you recently used strong mayor powers to veto a council vote on the tunnel bus service to Detroit because of these tariffs. You've gotten some heat from people on your side of the border and on both. I'm curious, probably not an easy decision for you, but how did you come to that one? Well, it really started as a budget decision.

And so there was a $1.6 million expense that was placed on the tunnel bus service overnight by our federal government. And it became a budget issue that city council had to deal with. And so I had never vetoed another decision of city council. But I had to look at this because the business decision

that was made during the budget deliberations certainly I didn't think was a sound one. And although I was thinking that I might just let it through and let the course play out over time and City Council could look in 2026 to see whether they wanted to move forward or not, Donald Trump and the threat of the tariffs just put me to the other edge. I just said there's no way I can support subsidizing and using taxpayer dollars, 1.6 million of them, to subsidize a service that brings 40,000 Canadians to spend their money in Detroit every year.

I just can't do it. And so I did veto it. It's the first time I've done it. I don't regret doing it. I did take some heat for it, but I still think it's the right thing to do in the circumstances that we find ourselves in. What is it like making a decision like that? You know this I know you had mentioned a this was a business

sort of a budget conversation at first now it turns into sort of a tariff topic. But I imagine as mayor that that must be a difficult decision to make. Really Windsor and Detroit are the two largest metropolitan areas this close on either side of the US-Canada border. We have deep relationships and connections with the City of Detroit, folks on the other side of the border, and we celebrate their successes. When the Detroit Lions are doing well, Windsorites are proud. And the Detroit Lions send the drone show over to Windsor because they have so many season ticket holders. There's just a great affinity for folks in Michigan by people in my community. And so having to do that, I take no pleasure in having to do that, but I looked at that decision. I looked at sponsorship that we provide annually to the Detroit Grand Prix.

And I just said, if tariffs are put in place, I only have a couple arrows in my quiver as a mayor. I have to make, I have to look at this and just make the decisions that I think are right for the community and the times that we're in. And, you know, in typical Canadian fashion, I said, I'm sorry, I'm sorry, I have to do this. I don't want to do this. But I'm left with no other way to sort of vocalize the concern that we have, except looking at where we're spending our money in the United States and how we're subsidizing things and being able to turn back that dial at this particular time while our country is under economic attack. Very good. Mayor Shoemaker, let's talk about the Suites.

St. Marie, Ontario is close to about 77,000 people. And just across the river, I know some people will make the comment that it is really just one town that's separated with some water in between it. But when we look at St. Marie, Michigan, we're looking at about 13,000 people. Many people in your community cross the border to shop for groceries, and recently many Saultites have decided not to entertain that idea any longer. What's the long-term impact that that's going to have on sort of managing that relationship with your neighbors down south?

Yeah, well, you know, I think that the American community on the other side of the border, Sioux, Michigan, understands that they are reliant on Canadian shoppers and Canadian retailers to go across there and spend their Canadian dollars to help them help with their existence. So it has long been, you know, that they have shopping available that is beyond what a city of 13,000 or 15,000 would be able to

sustain on their own, and that is because Canadians have been going over there to buy their gas, to buy their milk and cheese over the years, camping across there is very popular, people go regularly for dinner or lunch and so their economy and this is what we've been saying, their economy is going to suffer because of things that their government is doing to the Canadian side. I mean there are people who live in the American suit and work at Algoma Steel so there are direct ramifications to the American economy on that side of the border that their government is

imposing on them. Now, of course, we will feel the pain as a country, and as a community long term, if there are, you know, economy wide tariffs put on and if there are steel tariffs that are sustained. But we also have the buying power and the spending power of being able to have an impact on the American economy in the twin sues because of our significantly larger geographic and population base. All right, Mayor Diodati, what decisions have you had to make

that affect those across the border, but keeping the interests of your constituents? Well, the key, Jan, is that, of of course we're all patriotic and we want to be pro-Canadian, we don't ever want to be anti-American. I think that'd be a tactical error. We count on them, we're allies, we're friends, and there's lots of reasons why. I do believe this too shall pass. We just need to get through this bumpy road that President Trump has put us on.

I think also when you look at the economy, not only tourism, but even manufacturing, sometimes our manufacturing base gets overlooked. We've got 600 companies in Niagara Falls that represent 30,000 jobs. 72% of their exports do go to the U.S. So we're watching it both ways. And the message that I'm sending to my counterparts in Niagara Falls, New York and Buffalo, and we have that same relationship as the other mayors do, we're watching it both ways. And the message that I'm sending to my counterparts in Niagara Falls, New York and Buffalo, and we have that same relationship as the other mayors do. We're very close with our mayors.

And we also see it as, as one big city with this border that goes between us. And we just want to send the message that Canadians love Americans and Americans love Canadians. We understand that. This is just like a family squabble that we have to get through. And, and as I say, when this is behind us and it will get behind us, we understand that. This is just like a family squabble that we have to get through. And as I say, when this is behind us and it will get behind us, we look forward to the way it used to be. Mayor Smith-Gatke feeling the same thing? I would say so.

You know, it really comes down to the fact that we understand that this, despite the overwhelming results of their election, this is one person's, seemingly, of personal agenda. And everyone's feeling the pain, but we know that these relationships with our American counterparts are very deep. As I mentioned earlier, we have had American families who own property here who spend their summers with us for decades, if not a century. And the Thousand Islands and many of our lakes and that where they own property, they're very connected to us. So we have no desire to sever those ties with those individuals who support our communities in the summertime. However, to the point about

tourism, we are seeing more staycations, more people planning not to spend their money in the U.S. because they're choosing to support Canadian businesses and we won't ever turn that down. But Thousand Islands, City Cruise Lines, Rockport Boat Lines, they have so many tourists that come from the United States every summer to join us, it will be very interesting to see what is happening on the other side and whether they're still coming to join us. All right.

I'm very curious. I'll start with Delkins, Mayor Delkins. If we restructure our economic alliances, a lot of conversations about, you know, supporting Canadian and supporting local, and we are no longer dependent on the US for many things like food manufacturing, travel. What impact will that have on your communities? Well I gosh that it's a good question but I think the answer to that is that such a long term prospect that I hope that in a long term case here and with the situation we find ourselves I'm looking at the midterm elections in the United States.

A wholesale restructure of our economy is going to take a generation to achieve. I mean, this is a very complex and very difficult prospect. And I think if you look at the executive orders that the president has put in place with the tariffs against Canada, he's also acting in a very punitive way with respect to the duty drawbacks and the unavailability of those drawbacks. And so it's really complex to think that we can just wholesale make the change.

I think what we need to do is look internally. And I think I hear that from all political leaders at the federal level, that they're willing to look internally, remove the internal trade barriers. Let's look at our productivity here in Canada. Of course, we have to look at pipelines. We have to look at how we can get our goods to market to be able to sustain our economy. And I think this is a good opportunity for us to pivot and look at other trading partners long term. But still, we still have to have our eye on the United States. They're our closest friend. They're our ally. This is, as was said, a speed bump, a hiccup in the relationship. We will get back to some whatever that new normal looks like, we'll find that new place. I

think they'll always be our largest trading partner because of geography and proximity. But this does cause everyone to say, what should we do now, much like we did during COVID? Where should we should we be reliant on Chinese supply chains for certain goods? This will have business leaders making those calculations and trying to find out where they set up their factories, where they draw their supply chains for certain goods. This will have business leaders making those calculations and trying to find out where they set up their factories, where they draw their supply chains from

and where their new markets might be. Mayor Schumacher, I'll get your take on that as well. Yeah, I mean, it would be these, the integrated supply chain is not going to be disintegrated, at least not over the next generation, as Mayor Duncan has said. There is little economic sense to turning a blind eye to the fact that there's 300 million customers or 300 plus million customers, you know, less than a couple of kilometers from

each of our border cities, right? So we will always have that market that is in need of Canadian products. And, you know, I've been saying this for a while now, the Canadian manufacturing industry does not exist because Americans felt like giving us a piece of the pie. It exists because raw materials are here. It exists because we have been productive contributors to the manufacturing process. And we make different types of things than Americans.

Yes, there is some duplication. There are steel mills in the US and in Canada. There are car plants in the US and Canada. But we make good, high-quality product that Americans want, and that's why we have become an integral part to supplying them the goods that they need. And that will continue, and it's not going to change likely ever because of the proximity and the convenience and the good trade relationship that we have had over several hundred years and that hopefully continues for the next several hundred. Very good. Mayor Diodati, I'm going to come to you. President Trump has changed his tune quite a few times. But when it comes to tariffs, the reasoning at the time was about border security and fentanyl.

And as we know, the Canadian government has responded, appointing a fentanyl czar, putting $1.3 billion into beefing up security at the border. That has been addressed. Now it's about bringing a manufacturer back into the US. And I'm curious, on those phone calls that you're having with mayors and other leaders on the other side

What are you hearing from them as to what this is all about? Well, I think he's listening too much to his trade advisor Peter Navarro Who's telling him that tariffs are a good thing because you can go back in history You know 1930 when President Hoover was doing the same thing with 20% tariffs And it was Henry Ford who called that economic stupidity. And the U S went from a recession into the great depression and all those that were involved were unelected. So I'm hopeful they're looking back in history and realizing

tariffs, a fancy word for taxes. And it doesn't actually help anybody. And I think the markets have been responding, you know, S and P, NASDAQ. If you look at all the markets, they're following the discussions. And thankfully, premiers in Washington with Howard Ludnick, and I'm hopeful, and it seems it's obvious, they want to find the common ground. They want to find that watermark.

They need to find it because all the markets are responding and waiting. So I'm a little frustrated with what's gone on, but I'm glad now that things seem to be calming down a bit. But this is a very mercurial president. He's hard to predict, and this is his strategy. It's shock and awe, and then see what happens and see what sticks to the wall. So it's a it's a tough one to ever get comfortable. You always have to be on guard. Alright Mayor Smith-Gackiel, I'll get you on that as well. In those conversations

that you're having with mayors and leaders on the other side, I know there's been a joint effort to kind of stick together and kind of see this through. But what are those conversations and where are we pointing at sort of the president's frustrations at? Well, I think the real frustrating part for myself having the knowledge that I have, I shared with the border mayors alliance

at one of our calls, we had a meeting with the Border Mayors Alliance at one of our calls, we had a meeting with the Solicitor General in regards to what's happening at our borders and what's getting through, what's not getting through on either side. Homeland Security was part of that meeting. It's such a minute amount. When you're talking about fentanyl, it's really hard to grasp why he's sticking to that messaging because we know that it's 0.2% or something like that. But the point was was that the access through our borders and I'll just

only speak in regards to the two border crossings we have here in the United Counties of Leeds and Grenville but like the seizures were minute. We do have a challenge here in Eastern Ontario with human trafficking, human smuggling, further on down the seaway, but that is because of some challenges with Indigenous areas that have a bit of a different way of getting in and out of Canada. But the bottom line is that if you take it all into context, it's such a small piece and the safety of our borders, we've seen massive ramp up of RCMP presence, as well as OPP, as well as air helicopters. They are watching our borders very closely, the

people who are watching our borders very closely. And really there's been no spike that I understand here at hill island. We're not seeing, we're seeing some people wanting to come here and live here, seeking asylum, seeking immigration. But all in all, the illegal activity is really a very small

piece of what's happening day to day. Mayor Dill. Can I jump in and just add something? Because I was reading the Australian newspaper this morning and the headline was really interesting. I called Donald Trump the misleader of the free world. And so when I hear, every time I hear about the issue being border security and fentanyl, we know that that wasn't the case.

When we hear about national security issues with respect to Mayor Schumacher's commodity and the steel industry, we know that Canada is a fair market for steel. If we have a Chinese steel being dumped here, guess what, it's in our best interest to resolve that issue as well. And now when you look on the horizon

and you see the issues with respect to our dairy industry and our supply management, or you look at softwood lumber, these are all red herrings. And the facts really matter in the conversation. And the sooner, you know, we're all entitled to our own opinion, but we're not entitled to our own facts. And so this shotgun approach of continuing to cherry pick one or two issues, ramp up the rhetoric and the pressure and hopes of trying to find a resolution on those one or two issues, ramp up the rhetoric and the pressure in hopes of trying to find a resolution on those one or two issues,

and then moving to the next set. That's no way to negotiate. We need to get around the table where there are points of friction or dispute. Let's resolve those issues and come to a common agreement that allows us to get back to business. It's in the best interest of Canadians,

Americans, Mexicans. It's the best interest of all of the stock markets and the economies. And guess what? We've proven it over the course of decades here with the free trade agreements we've had with these partners. And so let's not buy. And it's really important that, and the calls that I have with mayors in Michigan, they all understand this. This is a lot of rhetoric and a lot of untruthful information that is being shared in an effort to create a crisis that really doesn't exist. All right. Well, speaking of calls, I want to pose this question to all of you.

And I'll start with you, Mayor Dilkens. If you had the ear of Donald Trump right now, what would you say to him on that line? Well, I don't think it would matter. I think he has whatever agenda he has in his mind. He wants Canada and Mexico and the rest of the countries around the world to be his marionette. And again, we're dealing in a world where facts don't matter to him. And so it's hard to have a conversation and find resolutions when at the end of the day, it's just all about winning. But it's not even that we know where the goalposts are

in order to hit the ball through the goalposts and win the game, it's that we don't even know where the venue is at this point. So at the end of the day, we need some clarity on what it is we're trying to resolve as opposed to being reactionary to every one or two issues that come forward every other day with these threats that causes all some uncertainty. You see what's happening, trillions of dollars of economic loss in the US stock market. At some point, folks in the US are going to say, listen, I supported Donald Trump, but I don't want to support this approach. And when it hits them in the pocketbook, that's where you're going to hear the noise ramp

up on the US side of the border. All right. Mayor Shoemaker, you got 30 seconds on that phone call. What are you saying to the president? Well first off, this is going to cost American people when they go to the grocery store, when they buy a new car, whatever it is. I mean, Algo-Masteel goes into Teslas, it goes into Ford Broncos. These are things that millions of Americans buy.

And so it's going to cost them more to put those items in their driveways or in their fridges when there are tariffs on Canadian goods. But the reality is if this is sustained over a long period of time, friends like Canada aren't going to be friends anymore, and we are going to have to turn to other markets. And they might be markets that the president's not fond of, markets in the Pacific, markets in Asia, markets in the Middle East or in Africa,

that the president would rather have us align with states than he would with other countries that are hostile to the United States. So I think it is in their best interests to get through these problems, resolve whatever friction does exist, but in the long term, Canada is their greatest ally and an ally in protecting the borders of North America. All right, Mayor Smith-Gatkey. I would have to be bleeped out if I said what I really want to say, but what I will say is that you have an opportunity to mend fences. We are here to be partners. If you choose not to do that,

we're going to have to go a different way. This is like a bad marriage. If you continually emotionally batter us, eventually we're not going to come back. And I realized that our economies are so intertwined, but at the same time we cannot, we cannot for the Canadian people continue to be the people that are taking all the bad parts of the marriage. So I would say that I don't want a divorce, but I want some counselling, and I want to see us come back to the table and find that middle ground. Very well put. Mayor Diodati, you get the last word on this. Well, Jane, I feel like I'm living in a reality TV show, and with this guy it's all about ratings and ego and

And it seems the only thing that seems to work is when you pump his tires So I think I would say something like, you know President you have a chance to go down in history as a great president if you can lock arms with us and we can Create the hugest economy right here in North America. Why don't we get it done? And then I'd quote I'd say, know, brush the teeth you want to keep. All right, we are going to leave it there. That's the reason why you guys are the mayors and I just ask the questions. Always really appreciate it. Thank you so much for joining us on the program and we'll see you next time.

Thank you. Thank you. Thanks very much.