Mark Carney

Mark Carney is running the most ambitious Canadian foreign and defense reorientation in a generation while fighting to keep the country intact. At the Ankara NATO summit in early July, he announced Canada had met the 2% spending target for the first time since the fall of the Berlin Wall, with a goal of 5% by 2035. He selected Germany's TKMS for 12 submarines in the largest defense procurement in Canadian history, extended Operation REASSURANCE in Latvia to 2031 with 2,600 personnel, and launched the Defence, Security and Resilience Bank targeting up to $133B in financing. He urged middle powers to act together, warning that if they are not at the table they are on the menu, and acknowledged Trump has "won the argument" on allies raising defense spending.

The U.S. formally declined to extend CUSMA on July 1, triggering a 10-year wind-down toward a 2036 expiry. Canada remains sidelined as Washington negotiates bilaterally with Mexico, citing Canadian pursuit of Chinese investment as an obstacle. Carney repealed the Digital Services Tax as a concession, but U.S. trade representative Greer says any breakthrough needs a direct Carney-Trump understanding. Carney says he will not sign a bad deal. A new tariff threat over cross-border wildfire smoke has compounded the pressure, with U.S. lawmakers threatening sanctions; Carney deflected by framing climate change as a shared global responsibility including the U.S.

His counter-strategy is aggressive diversification. He signed a trade pact with China allowing up to 49,000 Chinese-made EVs annually at reduced tariffs, concluded a third round of CEPA talks with India targeting $50B in bilateral trade by 2030, formalized a strategic partnership with the Philippines, launched Germany partnership negotiations, and made the first PM visit to Saudi Arabia in 25 years, signing $1B-plus in agreements with Crown Prince Mohammed bin Salman. He is also seeking to thaw relations with Beijing to increase trade, responding to shifting global sentiment.

At home, Carney co-unveiled a West Coast pipeline with Alberta Premier Smith on July 2, struck a cooperative prosperity agreement with B.C. Premier Eby worth roughly $20B in federal infrastructure funding, and visited the Calgary Stampede to campaign for national unity ahead of the Oct. 19 Alberta separation referendum. He pivoted climate policy away from Trudeau-era emissions targets, saying Canada "can't afford to restrain the growth" of oil and gas. First Nations chiefs at the AFN assembly passed resolutions opposing fast-tracked infrastructure, setting up a high-stakes October summit. B.C.'s Eby publicly criticized Carney for rewarding Alberta's separatist threats with preferential treatment. Carney's Liberals blocked an ethics probe into a $1.4B B.C. condo buyout he admitted was poorly rolled out, and he appointed four senators, abandoning non-partisan appointment rules. His government earned an A-plus from CFIB for internal trade progress, though 70% of small businesses still report no improvement.