Using hockey as a metaphor, the Liberals’ “elbows up” campaign style was clever politics — maybe even legendary — precisely because it meant nothing concrete. Pierre Poilievre didn’t truly lose the 2025 election; he mainly eliminated the NDP as a serious force. Ironically, with ongoing labour disputes, the NDP now has an opportunity to rebuild its brand.
Carney’s Tariff Concession
On Friday, Prime Minister Mark Carney announced that Canada would remove certain retaliatory tariffs on American goods in exchange for U.S. tariff exemptions under the Canada–United States–Mexico Agreement (CUSMA).
Carney said the change takes effect September 1 after a call with U.S. President Donald Trump. According to Carney, Trump assured him that the move would help kick-start broader trade talks.
“We had a very good call,” Trump said. “I like him.”
The White House followed up by calling Canada’s action “long overdue.”
Domestic Reactions
- Ontario Premier Doug Ford insisted any agreement must deliver relief for tariff-impacted sectors like steel, autos, forestry, and copper.
- Pierre Poilievre blasted Carney for “weakness” on the world stage, calling it a “capitulation and climbdown.”
- Small business leaders warned that Canada’s retaliatory tariffs often hurt domestic firms as much as U.S. measures.
- Steel producers expressed disappointment, arguing that the government’s retreat ignored the surge of American steel entering Canada tariff-free.
The message is clear: while some see relief, key industries feel exposed.
The Bigger Economic Picture
Canadians voted for Mark Carney believing he was the right leader for the moment. But Carney didn’t campaign on austerity — quite the opposite. He promised higher spending. To sustain that, Canada will need to eliminate as many tariffs as possible, not escalate trade wars.
Carney actually holds leverage over his base because he doesn’t have a true majority. For Canadians unwilling to back a Conservative government, the alternative is essentially no government at all. This dynamic allows him to maintain support while pushing policies that increase deficits.
The deeper problem is structural: Canada is cash-flow negative. The government can’t balance its books without adding debt. That reality discourages entrepreneurship, because business owners must assume Ottawa will eventually raise taxes to cover the shortfall.
For many Canadian firms, the only viable strategy is to operate here but aim squarely at U.S. consumers. The simple math shows Canadian consumers are getting poorer, while the U.S. market — even under tariffs — still offers more opportunity.
Why Austerity Is Inevitable
Public servants and government workers may feel insulated for now, but they are part of the same welfare-class ecosystem that relies on private sector growth. As that growth slows, their pay and pensions will become harder to sustain.
This is why forced austerity appears inevitable. The timing is uncertain, but the direction is clear: Canada cannot indefinitely rely on borrowing, subsidies, and welfare expansion without triggering a collapse in living standards.
Final Thoughts
Carney is correct to say Canada currently enjoys the best trade deal possible with the U.S. But he should also admit the obvious: without austerity and structural reform, Canada has no leverage.
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