What Would Happen To The Canadian Political Economy if it Became the 51st State of the United States of America?

By Melissa Wei

In January 2025, then President-elect Donald Trump threatened to use “economic force” to pressure Canada into joining the United States of America unless the country took substantial actions to strengthen their military and border security. He went on to dismiss Canada’s importance as a trade partner and claim the U.S. has been subsidizing Canadian products to an extent befitting that of an American state due to its $65 billion (CAD) trade deficit.

What started off as mildly concerning memes has turned into 25% tariffs on all Canadian imports delayed to March 4th. Trump’s proposal to make Canada their 51st state is feeling more and more genuine. But how worried should we be? Is this necessarily a bad thing for the Canadian political economy? Theoretically, how would this happen and are there fundamental differences that couldn’t ever be integrated, or are these countries more similar than one could have thought?

In short, if Canada became the 51st state, it would lead to the forfeiting of enduring distinctive Canadian values for short term gains. To understand how this outcome might unfold, a thorough comparative analysis of these two deeply intertwined nations is necessary, tracing their history and exploring their potential futures.

History

The history of the U.S. and Canada can be summarized as a dynamic sibling relationship between an older black sheep of the family and the younger favorite child, both originating from the same Imperial British Empire. Ironically, Canada was created in 1867 out of fear of U.S. annexation. Its political and economic institutions were designed to mirror their British roots while consciously attempting to avoid the aspects of the American system that led to the bloodshed of the American Civil War. Thus, an Anti-American sentiment is embedded in its national identity and has often been invoked for political purposes to bolster unity. Although this historical animosity holds true, both nations have similar founding principles of liberty and equality, federalism, constitutional designs rooted in Western philosophies, the shared English language linking their cultures, and a history of immigration that has been essential to their development.

It was during the first and second world wars when these countries finally found each other on the same side of history and began official cooperation, military coordination, laxed immigration regulations, and increased trade. In the 20th century, these two countries became fierce allies— “American soldiers died for Canada. Canadian soldiers died for the United States”.

Today, the economies and supply chains of both countries are fully integrated. Every day, around 400,000 people and $2.7 billion in goods and services cross the Canada-U.S. border. Canada is the U.S.’ largest export market and the trade deficit is the second lowest among its trading partners. TD Bank reports the deficit is mostly due to energy from the U.S. that it depends heavily on which, when excluded, results in a trade surplus of $60 billion. Nonetheless, Canada depends on the U.S. as a trading partner far more than the latter. Canada’s exports to the U.S. amounts “to more than 20% of gross domestic product” and nearly 10% of total employment. Depending on how extensive the tariff war would be, Canada would need to find alternative markets or, as Trump puts it, Canada could become “the 51st state”.

How Would We Join?

1. The Legal Way: If either Canada as a whole, or some parts of it, wanted to join the United States, it would have to go through Section 41 of the Constitution Act of 1982, requiring unanimous consent of amendment of the constitution given by the Senate, the House, and the legislatures of all 10 provinces. Then, through Article IV, section 3, clause 1 of the U.S. Constitution, which states that after being approved by the U.S. Congress, new territories can become states given some specified set of conditions. A referendum is not required, but it has been included in every state admission since the mid-19th century, which is very unlikely to happen as recent polling and booing of national anthems at sporting events has shown Canadians are audaciously not interested in a merger.

2. The Purchase: A lot of the American states were purchased, for example, Alaska, the western side of the Mississippi, and, most famously, the Louisiana Purchase, making up nearly half of America’s entire land mass. Determining Canada’s price tag would be very difficult as it would have to factor in 1,711 billion worth of natural resources, a GDP of 2.14 trillion USD (2023), land value being $5.824 trillion (2022), and unquantifiable cultural and historical value all of which would be impossible to pay in one lump sum.

3. Invasion: Close to Ottawa in upstate New York is the 10th Mountain Division, an elite troop of the U.S. Army. It honestly wouldn’t take much for them to march up to Parliament Hill and declare the country as part of the United States of America. In fact The U.S. Department of War had drawn up War Plan Red in 1930 on how to invade Canada if ever needed.

Political Shifts

Hypothetically, let's say Canada did agree to the first method; Canadian and American politics would both be fundamentally altered. Canada would be the largest state in terms of population, and the second largest economy. According to Politico, if the American electoral votes were reapportionment, Canada would have 47 electoral votes composed of 2 Senate seats, 45 house seats or more. As a result, around 31 states would lose House seats and Republicans would face a daunting disadvantage—the state of Canada’s Electoral College votes would likely go to the Democrat presidential candidate every time.

Although Canada would suddenly have massive influence over America and hence the world, ultimately this would be a large loss of political autonomy for the nation whittling down 338 House of Commons seats down to 54 and its 105 senators down to 2. Each Canadian would have less of a say in federal matters of foreign affairs, interstate commerce, and taxation. One unified state would likely receive less funding per capita compared to 10-13 states, as smaller states often benefit disproportionately in federal funding formulas. Canada’s political power would be extremely centralized and thus making it impossible to meet the unique needs of all provinces.

Canadian and American constitutions outline different separations of power to federal and state/province governments. Almost all laws and regulations would stay in the Canadian government’s control but they may have to be fundamentally altered in compliance with the American constitution. For example, Canada would lose the constitutional protection of French as an official language, collective group rights, equality between men and women, and uniform criminal law while being given the right to bear arms.

Canadians would need to adapt from a 5 party system to a polarizing 2 party system while gaining more political liberty, as party members often vote for the interests of their constituents rather than party in America. The two branches of government would be voted for separately with fixed terms allowing for more democratic accountability. The Supreme Court of Canada is also considerably less politicized, more impartial and more regulated than the American one which appoints judges at the President’s own discretion, often favoring individuals whose agendas and morals align.

Economic Expansion

On the bright side, a merger would result in a massive net benefit to the Canadian economy. Firstly, aside from the immediate removal of debilitating tariffs, removing the border would allow goods to freely flow without inspection, increasing trade volumes and opening up Canada to the world’s largest markets fostering more competition. This would result in better outcomes overall for consumers, productivity and economic growth. The U.S. power of interstate commerce regulation that is uniformly set throughout the country would replace Canada’s patch work rules with interprovincial trade barriers, growing the economy by 3-7% every year.

However, the border does serve an important role by concentrating economic investment in a region. If there were no trade barriers, much of the investment in companies on the Canadian side would move to the U.S. side. Canada has a greater percentage of small-to-medium-sized businesses, many of which would be unable to compete with larger U.S. companies.

Secondly, Canadians would pay less taxes in the United States, further boosting consumption and wealth, but receive lower quality public services in return. Case in point, Canada's social programs tend to cover a larger portion of the population compared to the US, offer higher benefits, and are more efficient. Thirdly, Canada would adopt the American dollar, leading to less control over monetary policy and a dependence on fiscal policy. However, this monetary union would enhance economic integration, reducing an estimated $3 billion per year of costs brought on by the uncertainties of a floating exchange rate, lowering risk premiums and interest rates. Adopting the American currency would also shield Canada against speculative attacks during high-turmoil periods.

In spite of all these economic benefits, there is more to the picture to consider as economic metrics cannot always capture the true well-being of a population. Ergo, America has had much greater income inequality in the past 4 decades. The World Bank’s Gini coefficient that establishes how equitably income is distributed in a society scored the U.S. a 0.41 (2022) and Canada a 0.32 (2019). A coefficient between 0.3-0.4 indicates that there is adequate equality, and any greater than 0.4 indicates that there is an income gap big enough for social and political instability.

Health

Sadly, Canada wouldn’t be able to keep its Universal Healthcare system, considered one of the best in the world, as it would be a major political challenge to integrate. Instead, Canadians would integrate into the federal U.S. mixed healthcare system which has been notorious for treating healthcare as a market commodity, not a social service. Canada spends half of what the U.S. spends on healthcare per person and yet sees considerably better results in health numbers.

The diets and lifestyles between the countries differ vastly; Canadians tend to eat in smaller portions and slightly more healthier foods. In contrast, Americans have a higher prevalence of obesity heavily attributed to high accessibility to ultra processed foods, which may spread North when trade barriers are abolished.

Security

Unbeknownst to many, the arctic ice is melting and the global giants it once separated are eyeing it for a strategic military presence. Canada, being the closest to the arctic, has long been reluctant to participate in U.S. military operations not sanctioned by the UN. Canada has gradually stopped prioritizing defense spending, falling short of NATO targets, particularly when compared to popular social programs. Canada’s military, ranked 28th in the world by the Global Firepower Index, would be integrated into the American military and its own National Guard, who would then rapidly militarize the north and secure Canada from global military threats for good.

Although Canada would be able to keep its gun regulations, it may be undermined by the American constitutional right to bear arms. Open borders, higher armed crime, and the right to carry in neighboring states may increase fears, accessibility, gun culture, and rates of gun incidents.

Indigenous Relations & Environmental Concern

Indigenous relations in Canada certainly have a stronger voice in political rhetoric. However, compared to the U.S., which has implemented structural recognition and change, these gestures may seem superficial. Indigenous peoples in Canada enjoy significantly fewer Indigenous-specific rights than their counterparts in the United States. This stems from the earliest notions that, while Indian tribes in the United States were domestic, dependent nations, Aboriginal peoples in Canada were simply subjects of the Crown. Under the “Treatment as State” clause, the U.S. federal government recognizes the Native American tribes’ right to self-determination, with the autonomy to self-govern, collect and spend their own tax dollars, to provide their own education, judiciary, and law enforcement without the interference of federal agents.

Canadians are also more concerned and conscious of environmental issues, willing to sacrifice more of their prosperity for the sake of the Earth. In contrast, we have a pretty good indication that we won’t be seeing an activist administration.

Should We?

Canada is a sovereign nation with 10 provinces and 3 territories all highly unique and steadfast in protecting their culture and rights. To whittle down such a diverse nation—larger than the U.S. in landmass—to one state would be impractical and unreasonable on many levels. Some argue a fair merger would involve granting statehood to all 10 provinces so they may retain their distinct cultures and institutions. However, that would essentially dissolve Canada as a nation. Beyond that, Canada’s internal structure is deeply interwoven, with unique political conventions and wealth-sharing mechanisms between provinces that have developed over centuries.

Although Canada will prosper immensely from a merger in terms of the economy, security, and Indigenous policy, the magnitude of what must be forfeited will be equally, if not more profound; such a shift could cost Canada its autonomy, an erasure of distinctive culture and national identity, progressive political values, and fundamental institutions such as universal healthcare, strict firearm regulations, and a focus on Indigenous reconciliation.

That being said, Canada and the United States share an unparalleled bond—be it geographically, culturally, or bilaterally—so much so that a peaceful merger is theoretically possible. While the prospect of economic coercion or annexation is unsettling and offensive, it also presents an opportunity for both nations to reflect on, rethink, and evolve their deeply intertwined relationship. Regardless of shifting borders or renegotiated agreements, the unique connection between these two nations will undoubtedly endure.

Melissa WeiFebruary 28, 20252 Comments