Commercial trucks cross the Lewiston-Queenston Bridge border into the United States on Feb. 4 from Niagara Falls, Canada.Joe Raedle/Getty Images
Rival Liberal leadership candidates Mark Carney and Chrystia Freeland have both released economic policy plans that pledge to slash red tape, diversify trade and spur investment in Canada as part of what they describe as a necessary response to U.S. President Donald Trump’s tariff threats.
The two pledged to speed up major projects such as mines and reduce internal trade barriers, with Ms. Freeland saying she would use federal transfers as leverage to force provinces to make changes.
Mr. Carney also said he would cut middle-class taxes, stop the capital gains tax hike, “boost” the incomes of young Canadians and speed up increases to defence spending to hit the NATO target by 2030. He provided no details for those policy promises, including the cost of the new proposals. At the same time, he promised to spend less in government but keep new programs such as dental care and child care, in part by shrinking the civil service, which ballooned under Prime Minister Justin Trudeau.
At a news conference in Windsor, Ont., Wednesday, Mr. Carney stressed the need for Canada to diversify its economy and end its excessive reliance on the United States given the “fever gripping America.”
“While America attempts to turn back the clock, Canadians will build sustainability for future generations. Before America’s fever passes, we must seize this moment for Canada,” he said.
Still, he acknowledged that the U.S. remains an important economic partner to Canada and said the two should remain closely integrated while Canada becomes the “essential” trading partner of countries that “share our values,” such as Britain and those of the European Union.
Mr. Carney’s campaign said he would release the details of his policy proposals in the coming weeks.
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Hours after his event, Ms. Freeland’s campaign released a statement outlining her economic plan. She did not hold a news conference and was not made available for an interview with The Globe and Mail.
If she wins the March 9 leadership race, Ms. Freeland said, she will meet with premiers the next day to eliminate trade barriers on agriculture, transportation and alcohol.
She said she would attract business investment to Canada by enacting policies from the now-defunct Fall Economic Statement, such as removing the 30-per-cent cap on Canadian pension fund investments in Canadian entities and reinstating the accelerated investment incentive. The latter program allows companies to write off a large share of the costs of newly acquired capital assets.
Ms. Freeland also said she would fast-track at least 10 major projects a year and enhance tax incentives for the critical minerals sector; make trade schools free to spur housing and infrastructure construction; and restrict American companies from federal procurement programs.
Both Ms. Freeland and Mr. Carney also pledged to increase Canadian defence manufacturing so that more of the Canadian Armed Forces’ budget could be spent domestically.
“Donald Trump declared a trade war on Canada,” Ms. Freeland said in an e-mailed statement. “In the face of Donald Trump’s economic nationalism, we must take bold action to make Canada’s economy stronger and more resilient.”
The former finance minister’s Dec. 16 cabinet resignation spurred Mr. Trudeau’s January resignation announcement and the leadership race in which she and Mr. Carney are considered the front-runners.
Other leadership contenders include former government House leader Karina Gould, who resigned her cabinet post to enter the race, and former MPs Frank Baylis and Ruby Dhalla.
Ms. Gould has previously called for a temporary one-point cut to the federal goods and services tax, bringing it down to 4 per cent, and a two-point increase to the federal corporate tax rate, raising it to 17 per cent for companies earning more than $500-million in profits.
She has also set a shorter timeline than Mr. Carney for meeting NATO’s defence spending target of 2 per cent of GDP. While he would set a deadline of 2030, Ms. Gould has said she would do so by 2027.
This would in part be achieved by increasing the salaries of Canadian Armed Forces personnel and by appointing a military procurement czar to speed up major purchases.
In a statement sent to The Globe, Conservative MP James Bezan dismissed Mr. Carney’s defence-spending promise, saying making such an announcement with no specifics on how to reach the goal or where the money would come from lacked credibility.
Last year the Conservatives said they would “work towards” meeting the NATO spending target, but the party has not set a deadline for achieving the goal.