When George W. Bush entered the White House in January 2001, it marked the first time in a decade and a half that Canada and the U.S. did not share governments of the same political philosophy. No longer was there the buddy-buddy world of Jean Chrétien and Bill Clinton, or before that Brian Mulroney and Ronald Reagan, then George Bush Sr.

It's back to the 1984 days of Pierre Trudeau and Ronald Reagan to find the last time the two capitals were governed by different philosophies. Those were pretty rocky days in Canada-U.S. relations.

A lot has changed since then. Free trade has tied our economies together. Canada needs the U.S. and in more ways than it may want to admit, the U.S. economy needs Canada.

But the philosophical gulf between Mr. Chrétien and Mr. Bush means tensions are bound to be higher than the two countries have felt in years.

That's a reason to be skeptical about recent claims that Canada will suffer economically for the Chrétien government's decision not to support the U.S.-led war in Iraq.

Economic retaliation is unlikely because the North American Free Trade Agreement has changed the trading relationship between the two countries. Manufacturers responded to free trade by rationalizing production on a North American basis as the auto industry did after the auto pact was passed in 1965.

Many plants in Canada now have North American product mandates and are producing for the entire Canada-U.S. market, while those in the U.S. operate in the same fashion.

That means a huge amount of cross-border trade is now intra-company trade. That creates a strong incentive for business to lobby both governments to avoid economic disruptions or retaliation no matter what the nature of the relationship at the top.

The Chrétien-Bush relationship isn't great. It's no surprise the president cancelled his planned trip to Ottawa this month. What is impossible to explain is why Canada even announced Bush was coming if Canada had any doubts about whether it would support the U.S. in the Iraq war.

It was the way Canada made that decision as much as the decision itself that strained relations. The first the two countries' ambassadors in Ottawa and Washington heard about Canada's plans was when the prime minister announced it in the House of Commons.

That's hardly the way to treat your friends and the frustration showed. It was the latest of a string of grievances on both sides of the border.

Canada was too slow to recognize the new threat terrorism posed to the U.S. and to respond with security changes at the border. The U.S. was too slow in acknowledging Canada's crucial role in taking in people and aircraft on September 11, 2001.

Sniping like that is precisely what one would expect between a liberal government and a conservative one, overlaid with tinges of 1970s Liberal anti-Americanism and American indifference to and ignorance about Canada.

It doesn't mean that the relationship will grind to a halt. With more than half a million people and a billion dollars worth of trade crossing the border daily that is not going to happen.

Several things will happen though.

Don't expect Canada to receive the benefit of the doubt from Washington on much of anything until Mr. Chrétien leaves office.

A significant part of our relationship relies on that benefit of the doubt. It has made Canadians feel as if they are players on the world stage and gives us a voice in the ear of the world's most powerful country.

It means consulting Canada on international issues because we are such close friends and longstanding allies even if the consultation is merely a courtesy. It means exempting Canada and Canadians from actions the U.S. takes against other counties for precisely the same reasons.

For the next little while, the phones likely won't be ringing and exemptions and special deals will be few and far between.

That happened in the Trudeau-Reagan years, but it was a different world then. No matter what the differences then, Canada and the United States were on the same side in the Cold War.

Now there is only one superpower and we've at least temporarily lost our privileged access.

The Bush Administration may still do things that Canada wants – but only if it primarily benefits the U.S. With Deputy Prime Minister John Manley lobbying Washington, Canada may yet get an exemption for Canadians from the new entry-exit rules Congress has mandated for 2005 that means every person entering and leaving the U.S. must fill out a card so their entry and exit can be traced.

If that happens, it won't signal a successful lobbying effort from a friend. It will be because the U.S. has realized Congress in its haste to pass measures seen to be enhancing domestic security, has imposed a system that is hugely expensive and administratively impossible.

Work will continue on reducing impediments for goods and frequent travellers crossing the Canada-U.S. border. Don't expect the U.S. to be in any rush to implement new proposals that benefit primarily Canada and Canadians.

Talk of renegotiating the North American Free Trade Agreement is likely off the table for the time being as well. It was always going to be a tough sell in Washington – now it is impossible.

Then there's that visit by President Bush to Ottawa. Paul Cellucci, the U.S. Ambassador to Canada, recently suggested the visit might be rescheduled for this fall.

Given a choice, would President Bush prefer to come to Ottawa to meet Jean Chrétien in his last weeks in office or wait until next spring to meet the new Prime Minster Paul Martin, assuming Martin isn't involved in an election campaign?

Canada-U.S. relations have not been irreparably damaged but there will be work for Martin to do. His challenge will be in doing it while not alienating the significant part of the Liberal party that thinks Mr. Chrétien has been right all along.

He writes for CBC News Online on topics of interest in Canadian politics.
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