Attacking Carney for the U.S. Attacking Canada Is Less Than Canadian

All references cited in this article are part of the public record. The assertions and conclusions presented, unless otherwise noted, have not been legally contested. Characterizations identified as the author's view are opinion.

Earlier this year, in Governing Through the Storm, this site laid out what Mark Carney inherited: A trade war, annexation talk from the White House, an auto sector under siege and thirty years of military underinvestment coming due all at once. It also examined the demand, led by Pierre Poilievre, that Carney cap his spending in the middle of all of it.

Since then, the storm has not passed. It has intensified. The United States refused to renew the trade agreement that anchors North American commerce, invoked a nearly century-old law to hit Canada with new 50 per cent tariffs, and then, when Canada would not sign a deal rewritten at the last minute, escalated again. Through all of it, a familiar chorus has kept its aim fixed on Ottawa rather than Washington.

Blaming the Canadian prime minister for what the American president is doing to Canada is not tough-minded fiscal conservatism. It is less than Canadian.

What Has Happened Since

February. The U.S. Supreme Court struck down the tariffs Trump had imposed under the International Emergency Economic Powers Act. The administration replaced them with a temporary 10 per cent tariff on global imports under a different law.¹

July 1, Canada Day. At the first scheduled joint review of the Canada-United States-Mexico Agreement (CUSMA), the United States declined to extend the deal for another 16 years. Instead of certainty to 2042, the agreement now faces annual reviews and could expire in 2036. U.S. Trade Representative Jamieson Greer said there were "substantial issues."² For now, CUSMA still shields about 90 per cent of Canadian goods from U.S. tariffs, which the Business Council of Canada has called "the only thing preventing recession."³

July 20. Trump signed three proclamations imposing 50 per cent tariffs on about US$20 billion of Canadian goods, roughly 5 per cent of everything the U.S. imports from Canada, from wine to hockey sticks to cement. It was the first time any president had used section 338 of the Tariff Act of 1930, a law that lets the president punish countries he finds are discriminating against American commerce. The White House cited Canada's auto quotas, provincial boycotts of American alcohol, and cheese quotas. The new duties apply even to goods that qualify under CUSMA.⁴

August. A tentative deal was reached on August 18. Within days it fell apart, the talks collapsed, and the 50 per cent tariffs took effect.⁵ More on why below.

September 8. Canada answered dollar for dollar, with tariffs of 15, 25 and 50 per cent on about $27.6 billion of U.S. goods, concentrated in steel, dairy, appliances, agricultural equipment, wood products and electronics.⁶ The same day, the White House announced import bans on certain Canadian alcohol and dairy products, effective September 29, and added all-terrain vehicles to the tariff list. Its fact sheet complained that only two countries had chosen to retaliate rather than negotiate: China and Canada.⁷

And in the background, the annexation talk has not gone away. It has changed form. Earlier this year it emerged that U.S. State Department officials had met three times with Alberta separatists seeking a $500-billion U.S. line of credit to fund a breakaway Alberta, a story covered in this site's article on Danielle Smith.⁸

Why Walking Away Was Right

The U.S. account is that Canada "declined to finalize the trade deal under the terms agreed earlier this week," and that Canada came back with new requests.⁹ Canada's account is the reverse. On August 22, Carney announced he had recalled Canada's negotiators after the Trump administration introduced late demands on culture, autos and sovereignty. "We cannot accept what they've offered, and we will not give what they've asked," he said. The United States had "asked too much and offered too little."¹⁰

He named three of the late changes. On autos, the U.S. wanted to change how tariffs applied to Canadian auto content, treating Canadian-made parts unfairly and exempting some cars and pickup trucks but not others, terms Carney said would have made building vehicles in Canada "more un-economic over time." On trade, "The U.S. introduced, in the last hours, efforts to restrict our ability to have other trade deals," he said. "Unacceptable." And on culture, the Americans took issue with Canada's support for French-language culture, French-language media online, and even the requirement for bilingual labels on products sold in Canada. "It was unacceptable right from the start, but the Americans kept trying and trying and we said no," Carney said.¹⁰

Carney also pointed to the shifting reasons Washington has given for tariffs on Canada, from fentanyl to wildfire smoke, dairy quotas, aircraft certification and an Ontario ad quoting Ronald Reagan, and concluded that Canada had come to realize "that sometimes, its signature was written in pencil."¹⁰

Canada had already offered a great deal. Carney has written that Canada was prepared to drop its retaliatory tariffs on steel, aluminum and autos if the U.S. substantially lowered its own, to encourage provinces to put American alcohol back on the shelves, and to adjust dairy access without dismantling supply management. What it would not trade was "sovereignty, the protection of the French language, or our culture."¹¹

Even setting aside whose version is right, the lesson is the same. A deal whose terms can be rewritten between the handshake and the signature is not a deal. It is a lever. The United States had just refused to renew CUSMA, an agreement Trump himself signed in his first term. Any concession Canada made in August would have bought no more certainty than CUSMA did. A country that signs away its ability to trade with the rest of the world, in exchange for a promise from a partner that has broken the last one, has not secured its future. It has mortgaged it. Carney was right to walk away.

Walking away was not free, and nobody pretended it was. The federal government estimates the tariffs put about 56,000 jobs at stake, and University of Calgary economist Trevor Tombe estimated that nearly 90,000 could be lost if they remain in place. Carney promised support for affected businesses "for as long as it takes; in other words, beyond the life of this administration."¹⁰ That support costs money too, and it is exactly the kind of spending a country under economic attack should be doing.

What the Critics Get Wrong

"He's spending like Trudeau." Budget 2025, titled Canada Strong and tabled on November 4, 2025, projected a $78.3 billion deficit for 2025-26. It also did something new at the federal level: It separated day-to-day operating spending from long-term capital investment, the way businesses and provinces already do. About $280 billion over five years is capital: Roads, ports, housing, defence and productivity. The government projects it will mobilize more than $1 trillion in total investment from public, private and institutional partners.¹² Treating a new port and a government salary as the same kind of spending is like treating a mortgage and a restaurant bill as the same kind of debt.

"Canada is going broke." Canada has had the lowest net debt-to-GDP ratio in the G7 for 20 years, at 10.2 per cent in 2025, and is expected to keep it through 2031.¹³ It remains one of only about a dozen countries rated AAA by both S&P and Moody's.¹⁴ And investors are voting with their money: In 2025, Canada recorded the highest foreign direct investment inflows per capita in the G7.¹³ Those are not the numbers of a country going broke. They are the numbers of a country with room to invest, and the sense to use it.

"Just make a deal." See above. Canada offered one. The terms moved. A deal at any price is not a deal. It is a surrender with a signature line.

"It's Carney's trade war." It is not. The tariffs were imposed in Washington, under American laws, by an American president, for American political reasons. Canada has responded, as any self-respecting country would. Blaming Carney for the tariffs is like blaming the homeowner for the break-in.

It Takes Money to Make Money

No business ever grew by refusing to invest. Families borrow to buy homes. Farmers borrow to buy equipment. Companies borrow to build plants. The question is never whether money is being spent. It is whether it is being spent on things that will pay for themselves.

That is what the federal capital plan is for. Build Canada Homes launched with $13 billion over five years to build housing at scale; in Ottawa alone, its first eight approved projects will deliver more than 1,100 rental homes, most of them affordable.¹⁵ The Major Projects Office is moving nation-building projects through approvals, including the Alto high-speed rail line, an Arctic economic and security corridor, new nuclear power at Darlington, the Contrecoeur container terminal in Quebec and the Crawford nickel project in Ontario, with listing decisions expected this fall.¹⁶ Defence spending, as the earlier article documented, reached NATO's 2 per cent target in 2025 and is on a path to 5 per cent by 2035.¹⁷

Every one of those is an asset that will still be earning its keep in thirty years: Homes that people live in, ports that move goods to new markets, power that runs new industry, a military that can defend the country. That is not waste. That is investment.

It Is Already Working

The clearest sign is where Canadian goods are going. In 2025, exports to countries other than the United States rose 11.1 per cent and reached 32.8 per cent of all Canadian exports, the highest share in four decades.¹⁸ In July 2026, non-U.S. exports hit a record $25.6 billion, and the U.S. share of Canada's exports fell to 66.3 per cent, the lowest since 1997 outside the pandemic.¹⁹

That progress is real, and it is not finished. Two-thirds of Canada's exports still go to one customer, and much of the recent growth has come from a relatively small number of exporters.¹⁸ Diversification is a project measured in years, not headlines. But the direction is unmistakable, and it is exactly the direction a country facing a hostile largest customer should be heading.

The United States as a Sidecar

In my view, the lesson of the past two years is simple: Canada should drive its own economy, tie it to every reliable partner it can find, in Europe, the United Kingdom, Asia, Latin America and beyond, and treat the United States like the sidecar on a motorcycle.

Canada is the motorcycle, and Canada is the one holding the handlebars. The sidecar is welcome to come along for the ride. When we choose to lean its way, it can even steady us, adding weight and balance to the turn. But it does not steer, it does not choose the road, and it does not decide how fast we go. The moment we hand it control, or lean on it so heavily that we cannot stay upright without it, all bets are off. As soon as they're not supporting us, we tip over. The U.S. can benefit from us and we from them — but they will never steer us again.

For decades, Canada has ridden as though the sidecar were the engine. The goal now is to reverse that: A Canadian economy strong enough to stay upright on its own two wheels, with the United States along for the ride when it suits us both, and never again in a position to decide whether we fall.

That does not mean pretending geography away. The United States will always be our neighbour, and it will always be a large customer. But no country should let a single partner hold two-thirds of its livelihood hostage, least of all a partner that has refused to renew its own trade agreement, taxes our goods under a law it dusted off from 1930, and hosts meetings with people trying to break the country apart. Every new market Canada opens, every pipeline to a coast, every port pointed at Asia and every trade deal with Europe loosens that grip.

Carney has said as much himself: "Building at home and diversifying trade abroad is not our plan B. It has been our plan A from the start."¹¹ He is right. The goal is not to punish the United States. It is to make sure that the next time an American president decides to squeeze Canada, it does not hurt nearly as much.

Less Than Canadian

Most Canadians already understand this. In polling earlier this year, a majority said Carney was meeting or beating their expectations in managing the relationship with Trump, and his approval stood well above half.²⁰

Even across party lines, the decision to walk away was backed. Ontario Premier Doug Ford, a Progressive Conservative, said, "I'm glad he didn't sign that deal because it was a bad deal." Conservative Leader Pierre Poilievre said his party would "support action to protect Canadians and our industries," adding, "Canada cannot accept one-sided tariffs that will deindustrialize our country. Nor can we accept a bad deal."¹⁰ When the Leader of the Opposition agrees that the deal on the table was a bad one, there is no honest case left for blaming the Prime Minister for refusing to sign it.

The critics who remain are not wrong to care about deficits. They are wrong about where to aim. The tariffs, the refusal to renew CUSMA, the import bans and the meetings with separatists all came from Washington. The spending that is building homes, opening markets, rebuilding the military and loosening America's grip on our economy came from Ottawa. A Canadian or American alike who looks at that record and blames Ottawa for Washington's attack has picked the wrong target.

When your country is under economic attack, you do not side with the attacker by default. You invest in making sure it cannot happen again. That is not reckless. That is what it takes to make money, and to stay free.