Prime Minister Mark Carney walks through a manufacturing facility ahead of a press conference in Mississauga, Ont., on Friday.Sammy Kogan/The Canadian Press
When Prime Minister Mark Carney announced a package of industrial supports, retooling for industries hit by tariffs and employment insurance expansions on Friday, there was a subtext: Don’t count on relief from U.S. President Donald Trump’s trade war any time soon.
Mr. Carney had declared in March that the old relationship with the United States is over. On Friday, he was telling Canadians it’s time to get ready for disruption.
“What’s going on is not a transition, it’s a rupture, and its effect will be profound,” the Prime Minister said in a speech at an aircraft plant in Mississauga, Ont.
In June, Mr. Carney was still talking hopefully about making a broad trade deal with Mr. Trump. This week, he and his minister handling U.S. trade talks, Dominic LeBlanc, emphasized a silver lining – that despite damaging tariffs on autos, steel, aluminum and lumber, Canada’s got a better overall trade deal with the U.S. than other countries.
“We’re in a position right now where Canada currently has the best trading deal with the United States of any of their trading partners. Eighty-five per cent of our trade with the US is now tariff free,” Mr. Carney said Friday.
The fight to preserve North American trade
On Wednesday, at a two-day cabinet meeting in Toronto, Mr. Carney had told reporters that trade talks with the U.S. are now focused on trying to strike several smaller deals in key sectors, such as autos and steel, where the U.S. has imposed stiff tariffs on all countries.
Yet the vibe around the cabinet meeting wasn’t optimism that those smaller deals are about to be landed. And on Friday, Mr. Carney announced a series of supports targeted at companies and individuals in those sectors.
When you roll out nearly $1-billion in programs for reskilling and jobs and $1.6-billion in expansions of employment insurance, it’s not a signal that you’re expecting trade peace to be declared tomorrow.
Mr. Carney’s government seems to be shifting gears from let’s-make-a-deal to coping with the fact there is no deal.
The measures Mr. Carney announced Friday included a $5-billion strategic response fund meant to help companies hit by the trade war retool and cope as well as an expansion of federal loans available to small business. He announced Ottawa will delay and review the electric-vehicle mandate that would require automakers to sell larger numbers of electric vehicles because, he said, auto companies “have enough on their plate.”
Now there’s an embrace of economic nationalism, in a Buy Canada policy that Mr. Carney insists will be a sweeping rule for the federal government. He said the government would unveil a defence industrial strategy this fall to ensure that Ottawa’s increased military spending serves to boost the Canadian economy. And the Prime Minister declared the era of free trade over.
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“We’re moving from an age that lasted decades, an age when free trade was a motor of global economic growth to a new age, an age of economic nationalism and mercantilism,” he said.
There were a lot of stark phrases like that in the speech Mr. Carney gave Friday, as he announced the package of support measures. At times, it seemed like the gloom in his diagnosis of global disruption was wrestling with the politician’s upbeat promise to make the country flourish.
The backdrop, with workers lined up behind Mr. Carney at an MHI Canada Aerospace plant making wings and fuselage, was intended to send a visual message about preserving good Canadian jobs. Yet Mr. Carney clearly wanted to deliver a warning about what is coming.
The announcement sent that message, too. Governments don’t usually announce billions for helping troubled companies unless a lot of companies will face conditions that leave their survival hanging in the balance. They don’t add 20 weeks to the employment-insurance benefits of long-tenure workers unless they want to reassure employees of once-stable businesses who might face a long period without a job.
Some of those things were not entirely new. The Liberal election platform promised a $2-billion strategic response fund. On Friday, Mr. Carney announced a $5-billion fund. The election platform promised to make employment insurance more accessible but not the expansion announced Friday.
In the spring, Mr. Carney spoke a lot about doing a deal with Mr. Trump – at first, a comprehensive security and trade agreement, then a trade agreement. Now it’s smaller sectoral agreements but not a lot of optimism. The tone this week was about moving on to what’s next.