Dominic LeBlanc, left, told reporters outside of a cabinet meeting Thursday that Canada is pursuing “technical discussions” with the Americans to try to strike deals. LeBlanc and Industry Minister Melanie Joly return to a meeting after speaking to the media, at the Liberal cabinet retreat, in Toronto, on Thursday.Chris Young/The Canadian Press
Michael Sabia, Canada’s top bureaucrat, met with senior American officials this week to try to find common ground with the Trump administration for potential deals on sectors hardest hit by U.S. tariffs, says the federal minister in charge of Canada-U.S. trade.
Dominic LeBlanc told reporters outside of a cabinet meeting Thursday that Canada is pursuing “technical discussions” with the Americans to try to strike deals that would be beneficial to both countries.
He said that Mr. Sabia, Clerk of the Privy Council, met with officials in U.S. Commerce Secretary Howard Lutnick’s office to continue discussions on strategic sectors hit by U.S. tariffs.
Mr. LeBlanc said he also discussed the issue with Mr. Lutnick last week in Washington, alongside Kirsten Hillman – who is Canada’s ambassador to the U.S. and its chief negotiator – and Prime Minister Mark Carney’s chief of staff, Marc-André Blanchard.
“There was an agreement amongst all of us that we would pursue technical discussions in the context of going over different sectors, where Canada believes we can come to an agreement that would be in the economic interest of both countries,” Mr. LeBlanc said.
“Those discussions start by having base understandings, common understandings, of a series of potential options that may ultimately form what the Prime Minister said would be a series of small deals that cumulatively would put us in a better position than right now.”
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Mr. Carney is huddled with his cabinet at a north Toronto hotel for two days of meetings focused on the state of the economy as well as Canada-U.S. relations, fast-tracking major infrastructure projects and crime.
The Prime Minister is also expected to make an announcement in Toronto on Friday focused on Canada’s strategic sectors. “We’re really working on supporting sectors, and there’s more news to come on that,” Industry Minister Mélanie Joly said Thursday.
She added that Canada must ensure that its steel plants can pivot and retool to make steel required for building homes, major rail and port projects, the defence and aerospace industries and shipbuilding.
On Wednesday, Mr. Carney said he spoke at length with President Donald Trump earlier this week and that he is expecting to secure some relief for strategic sectors battered by U.S. tariffs, but he stressed there is no certainty that this will happen.
The Prime Minister announced on Aug. 22 that Canada was dropping its retaliatory tariffs on some U.S. products in a bid to reset trade discussions with the White House that had stalled.
Canada’s trade deficit narrowed in July to $4.94-billion as exports rose
Canada retained its countertariffs on steel, aluminum and autos, industries that have all been hit by U.S. sectoral duties, known as Section 232 tariffs.
Cabinet ministers heard from two pollsters on Wednesday who said fear over tariffs and Mr. Trump has dissipated and that Canadians are more focused on the economic impacts and affordability.
Ms. Joly said Thursday that Canadians want the government to be in “action-mode” and there is a sense of urgency when it comes to the economy.
Meanwhile, Finance Minister François-Philippe Champagne said the government will make tough choices in the coming federal budget, acknowledging that planned spending cuts will lead to staffing adjustments in the public service.
Speaking to reporters earlier Thursday, Mr. Champagne said ministers have submitted their plans to reduce program spending over the next three years.
“Will there be tough choices to make? Definitely. Is the nation ready? I would say yes. I mean Canadians have elected us to do things differently,” he said.
“We said we’re going to spend less so we can invest more. And you know, people understand that. My mother understands that.”
Minister of Finance François-Philippe Champagne said ministers have submitted their plans to reduce program spending over the next three years.Chris Young/The Canadian Press
Mr. Champagne requested this summer that ministers submit plans by the end of August to reduce program spending by 7.5 per cent in the fiscal year that begins April 1, 2026, followed by 10 per cent in savings the next year, and 15 per cent in the 2028-29 fiscal year.
Asked if this had been done, he replied: “It was not an option.”
Mr. Champagne on Thursday would not outline any specific spending cuts but when asked about layoffs to the public service, he said there will be “adjustments.”
“We’ve been adding a lot of people over the last few years,” he said. “You’re looking at adjusting, but at the same time, the point is really about using technology, delivering better services, making sure that Canadians find value for money.”
Mr. Carney told reporters on Wednesday to expect an austerity and investment-focused budget in the fall. The Prime Minister has vowed to both cut spending in the government’s day-to-day operations and increase it on things like defence and infrastructure.
Conservative Leader Pierre Poilievre, however, expressed skepticism that Mr. Carney will rein in spending as promised.
“He’s doing neither investment nor austerity. What he’s doing is even more bureaucracy and spending. As I said, it’s all a show,” he said, adding that the country needs “fewer bureaucrats.”
Sharon DeSousa, the national president of the Public Service Alliance of Canada, which represents more than 185,000 federal workers, lambasted Mr. Carney’s “austerity budget” comment as “reckless” and “short-sighted.”