The Peter Zeihan Podcast Series - Canada, After America || Peter Zeihan

Episode Date: December 25, 2023

Today, we're looking at the Great White North. While they're near the US, they still have plenty of issues to sort out before seeing a clear path to success in a deglobalized world.Full Newsletter: https://mailchi.mp/zeihan/canada-after-america

Hey everybody, Peter Zine here coming to you from Colorado. And on this chilly morning, I thought it would be a great time to talk about our neighbors to the Great White North, the Canadians. Specifically, this is an entry in our post-American series about what happens in the world where the United States becomes less interested in really everything. Now, Canada today has three major problems. The first one's immigration. Now, this is the most pro-immigration country in the world because they faced a German or an Italian or Korean-style demographic decline and collapse. as recently as 20 years ago, but unlike the Germans or the Italians or the Koreans,

they decided to reach towards immigration as a way to address it. And so over the course of the next 15 years, they brought in something obscene like 4 million migrants, more than 10% of the population, with most of them being under age 35. So unlike the immigration diet

they had been on before, where everyone came in their 50s and they retired, and the Canadians never got more money out of them in taxes and then they paid in services for pensions, these are people who are going to pay into the system and contribute as workers and consumers for decades before they become a liability. And that has changed the demographic of Canada because they're bringing in people who have already been through primary and secondary education and are ready to work and spend and pay taxes.

So it's kind of the best of all deals from a demographic point of view. The complication, of course, is that these are people who are coming from places they don't intend to return to, and so they have to have a place to live. and if you have to have a place to live, you will pay whatever you have to do it. And that has driven up housing costs in all of the gateway cities in Canada, most notably Montreal, Vancouver, and Toronto. And he's now even reached into the secondary cities, places like even Winnipeg. And that's made a lot of social tension in Canada that didn't exist before. Nowhere near the nativist sentiments that were seeing a lot of the rest of the world, because this is still Canada.

But it is notable. The second problem is income imbalance. Now, this is something that has also gotten a little bit better. If you go back 15, 20 years, you will be in a situation where there was only one province, Alberta, that was in effect paying for everyone. All the other provinces were aging towards mass retirement with the Quebecois the furthest along, and the Ontarians not far behind that. And the whole compact that had allowed Canada to exist was basically that Ontario taxpayers would pay for Quebec to not secede. Well, that only works until the Ontarians start to hit mass retirement. And that left it to the Albertans to pay for everything, and they were pretty cheesed off about it.

Well, because of that immigration surge, suddenly there are more people in British Columbia and Ontario, and to a lesser degree, Quebec, to pay for that compact. And that's bought the Canadian state a lot of wiggle room. But the third problem is one that's definitely not going to get better, and that's the United States. Now, Canada has always benefited from the fact that it is, from the population point of view, very small, and has it posed a threat to the American mainland since the war. of 1812. However, they have managed to ring concession after concession after concession out of Washington simply because they're not all that important. So when the United States gets embroiled in like the Cuban Missile Crisis or the Berlin Wall fiasco or the Iraq, whatever it happens to be, Canada can say, you know, we're here, we will help you. But if in exchange, could we get a little

concessions on auto parts? That worked throughout the Cold War and into the post-Cold War period. But when you get into the post-9-11 period, and especially Trump and beyond, where the United States starts to equate trade issues with national security and more directly, all of a sudden Canada doesn't have anywhere to run. And as the United States steps back from maintaining the world, there are less things like the Berlin airlift that we care about. And Canada goes from being like number 23 on the American watch list to like number three or four. And in that sort of situation, the Canadians have lost their wiggle room. So good for them. The Canadians have found a way to at least manage their immigration issue, and they've found a way to kind of deaden. Think of it like geopolitical Novakane, their internal imbalances.

But that's coming at the cost of a much harsher, more direct, more bare-knuckled relationship with the United States. Because the United States that is really only concerned with North America must put more of its attention towards Canada. and since the Canadians have always been a confederacy where different provinces basically set different free policy even, that makes Canada as a whole one of the most protectionist countries that the United States deals with on a regular basis. And now we're paying attention to that. And we have a lot more lovers than they do in the relationship.

All right. I don't know who's next. We'll get back to you.