Trade war, transportation, and you: A Halifax budget season preview

At the 11th hour, a temporary ceasefire deal was reached in the dumbest trade war in history. Hostilities between Canada and the USA are set to resume next month. Should the cold trade war become hot, it will have catastrophic impacts on the Canadian economy, although since most of our economic models are designed to predict small fluctuations instead of major changes, we don’t really know just how catastrophic things could be.

This next month is crucial for Canada to prepare for the end of our American dependence and regaining Canadian sovereignty. And believe it or not, the front lines of this battle are where American national security and Canadian municipal budgets meet. But to understand how these things are interconnected, buckle up because we need to take the scenic route through almost a hundred years of history.

The year was 1935, and Canada and the USA were emerging from a period of economic depression. To stimulate the economy by removing some friction from it, the United States and Canada entered a trade treaty and dropped tariffs on food and automobiles. The experiment worked well enough that in 1965, we entered the Canada-US auto pact. Even though this was unpopular with some US companies for driving manufacturing jobs to Canada, bolstering our auto sector, America pressed on with freeing up international trade. In the 1990s, China joined the World Trade Organization in a campaign led by America’s then-president Bill Clinton, who sold the world on the idea that if China joined the global economy, it would become a more liberal state with fewer human rights abuses.

Instead, thanks to the near-complete state control of its economy and its willingness to allow horrible working conditions, China used the power of its low-wage workforce to undercut American manufacturing; cheap labour was all the incentive companies around the world needed to send their manufacturing to China. In 2019, the United States Senate Intelligence Committee heard from then-director of national intelligence Dan Coats, who told the committee, that giving China so much economic power and access to industrial and corporate leaders also allowed China unparalleled power in the world of espionage. Coats told the committee that “while we were sleeping in the last decade and a half, China had a remarkable rise in capabilities.” Lisa Van Dusen, in Policy Magazine, writes that this is “sort of like admitting that you snored through a home invasion during which someone hacked your laptop, stole all your money, slept with your wife and poisoned your dog—only you’re not Rob Petrie living in an unlocked New Rochelle bungalow in 1964, you’re the most well-funded, technologically omniscient, covertly omnipotent intelligence behemoth in history.”

Sending most North American manufacturing to China had some additional national security risks, as revealed by the COVID pandemic. During the lockdowns the global economy slowed, as did global manufacturing. Like practically every other industry, the manufacturing of microchips also slowed down but the demand for microchips didn’t, and there was a microchip shortage. Taiwan is the main manufacturer of microchips in the world, and the United States realized that China’s regional dominance over Taiwan meant the USA’s microchip supply could be, and was being, put at risk by China. Since the American economy relies heavily on microchips and isn’t super friendly with China, then-president Biden’s administration jumpstarted domestic microchip manufacturing to ward against the risk to American computing sovereignty.

Don Trump’s “America First” administration is trying to ward against the same risk in American transportation. As outlined in Trump’s platform, Project 2025, chapter 19 explains American transportation policy for at least the next four years. The platform makes the case that American prosperity is tied to American transportation, and the backbone of American transportation is roads and cars. The platform argues that roads are dangerous, because people can’t afford to buy new cars that have more automated driving technology. The reason Americans can’t afford to buy these cars is because they aren’t made in the USA. (As an aside, this platform also says that gas is too expensive because it’s too clean.)

At any rate, the short version of Trump’s transportation plan is this: The USA needs more roads. In order for those roads to be safe, Americans need to buy new cars with new technology. In order for those cars to be affordable they need to be cheaper by being made in the USA. If the USA doesn’t manufacture the vehicles required for its transportation system in the USA, that is a threat to American sovereignty. The easiest way to bring the manufacturing exported to Canada back to the USA is to kill it with tariffs or bring it in-house by making Canada the 51st state.

Canada has spent the better part of the past 90 years attempting to forge a path through the world in the wake of American dominance. The American economy gives us a lot, like the auto sector, and Canadian politicians have been willing to do a lot for a little bit of access to American economic dominance. We have historically been a good ally. When they asked us to arrest a Chinese citizen for their trade war with China, we did. When they asked us to ban a Chinese company from our telecoms, we did. When they asked us to ban Chinese EVs even though it makes cars more expensive for Canadians and undercuts Canadian climate policy, we did it. When they asked us to sacrifice Canadian lives to root out terrorism in the wake of 9/11, 159 Canadians did.

And still they demand more than our pounds of flesh? This is the America that has made up flimsy excuses to invade countries from Vietnam to Iraq, and is now using a flimsy excuse to threaten its closest ally. This trade war threat tells us loud and clear that our past sacrifices haven’t been good enough, so you’d better believe prime minister Justin Trudeau’s promise to spend more than a billion on border security and appoint a “fentanyl czar” won’t be enough to satisfy Trump longterm, either.

This is without even touching the fact that USA’s treasury department was commandeered by a half-dozen fresh-out-of-or-still-in college interns on behalf of Elon Musk’s “Department of Government Efficiency” while American lawmakers and judges sat on their hands and watched it all happen. Musk is already unilaterally using this power to stop federal payments to aid programs.

Whether Trump’s poor treatment of the rest of the world is malicious intent or a self-implosion, it is clearly folly to plan our economy around modern day America. We need to start building a Canada where we can maintain our transportation and economic sovereignty. This trade war will be fought and won by Canadian streets and municipal budgets.

Halifax’s budget committee meets Wednesday Feb 5, to debate the Budget Introduction and Capital Plan Recommendation. Here’s a high-level overview of how things were shaping up according to those two linked reports, written before we moved so close to a trade war.

Since the city is unsustainable, we need to increase taxes to cover our expected $69 million operating deficit this year. Which is a property tax increase of 2.7%, for an average of $189 per property tax bill. City staff have written that if council wishes, council can keep taxes low by gutting the library’s strategic reserves, not paying down debt, cutting services, shifting the revenue burden to companies and removing the HalifACT tax. Staff recommend against doing all of this because these strategies “are not fiscally sustainable and will create long-term challenges,” including but not limited to: not achieving council’s priorities, not having any money tucked away for emergencies and higher taxes in future years to cover the shortfall of keeping taxes low this year.

The risk analysis section of the budget preview staff report reads in full:

All budgets deal with a level of uncertainty, the 2025/26 Budget Outlook is no different. Budget assumptions changing can pose a risk to the overall financial plan. Changes in assumptions could stem from unforeseen economic fluctuations, geopolitical events, or even internal factors like major projection shifts or unexpected expenses. Such changes can quickly make even the best budget obsolete. As of the timing of this report, the Q2 financial report projected that the municipality is running a deficit in 2024/25. If the municipality does run a deficit, it will need to be funded in the 2025/26 fiscal year. Funding any deficit would require a further increase to the average tax increase.

It’s not clear exactly what the effects of a “USA-CAN go fuck themselves” trade war will be. Still, based on the proposed tariffs and counter-tariffs, it is pretty safe to assume that our budget assumptions must change due to geopolitical events causing foreseen economic fluctuations. As a result, the city will need to change internal factors and major projection shifts to offset an expected spike in expenses that have already made this budget obsolete. Remember, this report is being presented to council one day after the dumb, devastating trade war was set to start in earnest.

Whenever hostilities resume—whether that’s in a month or later into Trump’s reign—for good Canadian leaders in this trade war, there are two main considerations: How do we fight back to protect our sovereignty, and how do we protect Canadians from the coming hardships? On the municipal level in Canada, there is a relatively easy way for the city to raise money and save Haligonians’ money, while taking substantial economic shots at major American companies and start reclaiming Canadian sovereignty. The only downside is that the policies to do this would have been incredibly unpopular before the trade war, and even with the trade war, they probably won’t be welcomed with open arms.

But this is a trade war, and we need to start enacting market-based economic attacks on any public subsidy that primarily benefits American policy goals at the expense of our own. If we want to win this trade war, we must eradicate the scourge of American car culture and its costly public subsidies. We must free ourselves of the shackles of nationalist American transportation policy.

By reminding Trump about promises made last October, the feds have bought the city a 30-day extension to do this homework of freeing ourselves from the economic prison we’ve accidentally built for ourselves. Like the Americans, we too need to reclaim our transportation sovereignty.

On a personal level, pre-trade war automotive transportation costs the average Canadian about $1,300 a month. With the “catastrophic” impacts to the auto sector forecast for the first hot week of the trade war, transportation costs are going to skyrocket alongside the cost of other imported necessities, like food.

Money people spend on transportation is money they can’t spend on food. But in Halifax, almost everyone needs a car to move around because the buses suck, and biking isn’t safe because almost everyone needs a car to move around. So there are a lot of cars making the roads dangerous for bike riders and slowing down buses. The best way to give people more money to spend on food is to reduce the amount of money they spend on transportation. City councils, with their almost absolute power over the physical world through zoning and transportation infrastructure building, are the level of government best positioned to do this. However, Halifax doesn’t have the money to make major transportation changes because of the excruciatingly high cost to our municipal government of almost everyone needing a car to move around.

Thanks to huge portions of our budget going to subsidize American oil and car companies and American policy priorities, the city can’t make substantial investments in non-car alternatives. Unless things change, over the next seven years, Halifax will spend at least $1 billion on automotive transportation infrastructure, of which the city will recoup about $50 million in parking fees if historic fee trends continue. This gives automotive infrastructure a sustainability rate of about 0.05%.

It is easy to say, “just raise taxes to cover the cost of doing what we need to do.” But such a large tax spike is untenable, even without the expected increased cost of living, thanks to the impending tariffs. So, the question for our city this budget year is how can we prevent spending public tax money to achieve Trump’s policy goals while protecting Haligonians and keeping taxes low.

A (trade) wartime policy framework for Halifax

In order for the city to successfully transition to an economic war policy footing, which has the added benefit of being a more fiscally sustainable city, two things are required: a plan, and policies to make the plan happen. Historically, Halifax has been pretty good at making plans but absolutely abysmal at implementing them.

Part of the reason Halifax’s plans fail in the realm of transportation was revealed during the recent debate where the Windsor Street Exchange was killed. City staff explained to council that they couldn’t prioritize public transit because there is no transportation-network-wide plan to give buses priority space on public transportation infrastructure. However, in the realm of transportation the city does have a few interconnected active transit plans, like the Integrated Mobility Plan’s AAA bike network and the Green Network Plan, which are slowly being built over the next few years.

The city is currently working on a suburban plan. This is also a transportation plan in disguise, because it will dictate where residences and businesses—AKA where people move to and from—can be built moving forward. The city needs to do things like increase density and allow some commercial uses in formerly residential-only parts of the HRM. Adding residential and commercial density will fundamentally change how people around this city live, as more people and more destinations occupy the same limited geographic space. Since the looming economic sanctions (and the HRM’s underlying unsustainability) mean Halifax will have to do more with less, it is vital that city spending on transportation—including Halifax’s budget for paving roads—be frozen until all of the city’s transportation and zoning policies are integrated and working toward the same outcomes. So that when we do spend that paving money, we’re spending it on the streets we need for the future instead of wasting that money on useless speed humps.

Before the city spends any money on roadworks ahead of a trade war this budget season, we need a transportation infrastructure plan in place so that the city we build today is designed to reduce the everyday transportation costs of Haligonians tomorrow. This transportation plan should look at existing road infrastructure, see what is planned for the destinations on those roads with the Suburban and Centre Plans, and then re-allocate road space for more efficient modes of transportation. That is, Halifax needs to go on a road diet.

Road diets have the added benefit of being exactly how council instructed staff to achieve their council priority outcome of an “affordable and sustainable” road network in the 2021 strategic priorities plan. And a meta-analysis of the digging into why road diet studies were so overwhelmingly positive found that “the systematic bias in specifying costs and benefits is consistent with Flyvbjerg’s ‘political-economic hypothesis’, in which it is theorized that planners strategically misrepresent costs and benefits in order to increase the likelihood of a politically-preferred project being advanced.” Or as city staff write in this year’s budget documents, even though six people died on the roads in 2023 and 12 people died in 2024, if you add in the slight increase in serious injury collisions, that represents a total increase in road safety of 13.7% because our population grew by 10,537. In fact, each one of those 52 dead Haligonians correlates to 1.4% of Halifax’s massive 73.7% increase in total road safety. This is how Halifax will achieve zero deaths on our roads by 2030.

Just kidding. The zero-death-by-2030 is the old plan. Since we’re making such great strides in road safety, our new plan is to eliminate preventable deaths by 2038.

Step one in this trade war policy framework is for council to flex its power and demand city staff to do what it has consistently and repeatedly instructed them to do for years. Council should not approve any budgetary spending until an acceptable trade war plan is in place. Now that a trade war has started and been put on pause, maybe staff could stop being so treasonous and start doing what they have been repeatedly instructed to do by the council over the years by the time this thing kicks off again?

But when council and staff rise to the challenge and come up with a comprehensive transportation plan in co-ordination with other planning documents, it will require a massive amount of money. We still don’t want to raise taxes, so we need to raise money via fees, ideally ones that hurt American companies. To give an idea of what that could look like, here’s a few policies Halifax could employ to take back decades of public subsidies from American companies.

An Uber tax: Halifax’s city council is the administrative body that dictates who can be hired to do what on our roads. They control taxi licences and regulate (parts of) the transportation apps like Uber that operate on our roads. One of the big reasons companies like Uber can make so much money is that they don’t have to pay for the cost of the infrastructure required for their product to be viable in the Canadian market. Companies like Uber should be charged an infrastructure maintenance tax, levied at a rate of something like $5 per trip or 50 cents a kilometre. Index the cost of this fee to the cost of road maintenance.
Drive-thru permit: The city has the power to regulate land use, and requires permits and fees to be paid for different types of development. Restaurants and other businesses that operate a drive-thru—that profoundly American invention—are not asked to pay extra for the increased road maintenance required by the city due to the increased traffic generation. But they could be. Halifax should require each company that operates a drive-thru to apply for an annual permit; the fee for this permit should be high, and indexed to the cost of road maintenance.
Increase fees for large American light trucks: American automakers have been pumping out larger and larger pickups and SUVs because it is more profitable for them. These vehicles are physically and environmentally deadlier than their passenger car equivalents. Halifax is considering higher permit fees for heavier trucks; not only should the parking rate for trucks be high enough to discourage buying and driving them, but these fees should apply to all street parking everywhere in the HRM. This has some distinct advantages, like being able to create tourism zones near problem spots like Rainbow Haven, Conrod’s and Crystal Crescent Beaches. On top of the no-parking zones, on-street parking rates near these beaches could be jacked up to reduce congestion. But this one would need to be implemented well in order to increase public buy-in. Halifax would need a holistic, network-wide plan for development, density and transportation to show people what the higher fees were paying for. There would need to be some form of equitable implementation like Parking Benefit Districts, so people could set their own higher fees, and see those higher fees being spent on improvements in their community. It would also allow the city to take back control of our public streets, which, for decades, has been ceded to American car companies.

There is no magic bullet to policy, but there are solutions and ideas out there. The rules, as our former ally to the south is proving, can be changed to suit us if we don’t like them. There are limits to what the city can do, but those limits can be used to our advantage if our council and staff have enough imagination.

But a trade war is still a war, and like every war, this one will also have casualties. If we are lucky, these casualties will be businesses and corporate entities. If we are unlucky, the casualties will be fellow Canadians. Right now, it’s likely to be both. Does the city of Halifax and our rookie council have what it takes to hold down our section of the front in the upcoming trade war? Will we rise up the challenge and fight the American bully with our trademark long, enduring, terrible, skilful patience?

We start to find out at Wednesday’s council meeting, but doing what we need to overcome a prolonged trade war unscathed is a huge departure from what we’ve done in the past. It is extremely likely that unless you tell council that you want to see an aggressive approach to Halifax’s unsustainability, and you want it now, that it will not happen. An economic war like this will come for us all. To prevent the worst of our future outcomes, our councillors need to feel empowered to demand the changes we need to see in things like transportation and sustainability. In order to do that, they need to see that there is support for aggressive action to help Halifax and Haligonians have more money to do things as this trade war drags on. Every budget meeting starts with public participation, and councillors’ email addresses can be found here.

Will you do your part to stand up to Trump and fight for a better Halifax?

This article appears in Feb 1-28, 2025.