Carney pivots to domestic investment and trade diversification as U.S. tariff war drags on
Prime Minister Mark Carney's government is pushing a strategy of domestic investment and trade diversification as formal Canada-U.S. trade talks remain stalled and tariffs on both sides continue to bite.
The Prime Minister's Office said Carney's priorities include affordable housing, new infrastructure, a federal investment summit aimed at attracting foreign capital, and the fall federal budget. PMO deputy director of communications Audrey Champoux outlined those priorities as cabinet ministers prepared to fan out across the country to reassure companies of available federal support during the escalating trade war with the United States (The Globe and Mail).
Industry Minister Mélanie Joly and Finance Minister François-Philippe Champagne planned to step up a media blitz with meetings with businesses and chambers of commerce, guiding companies through applying for support. The Globe and Mail reported the ministers' plans based on two sources not authorized to discuss the matter publicly (The Globe and Mail).
The trade dispute has escalated sharply. U.S. President Donald Trump imposed tariffs on Aug. 22 after trade talks between the two countries collapsed. Canada responded with retaliatory tariffs on $28-billion of U.S. goods, including steel, aluminum, dairy, wood, appliances and electronics. The retaliation was dollar-for-dollar. Trump then fired back with a sweeping ban on imports of some Canadian goods in response to the countertariffs (The Globe and Mail).
In a statement dated Aug. 21, 2026, Carney said the U.S. intends to impose a 50 per cent tariff on roughly $28 billion of Canadian goods (Prime Minister's Office). An economist cited by Reuters estimated the latest U.S. tariffs could eventually cost Canada 90,000 jobs (Reuters).
Carney met with Quebec business leaders on Tuesday to discuss the trade war and how to boost growth and investment. Twenty companies attended, including Power Corporation of Canada, Desjardins Group, Saputo, Metro, Intact Financial and Lightspeed (The Globe and Mail).
The Carney government has set a goal of doubling non-U.S. trade over a decade and said it would continue to focus on "building at home and diversifying trade abroad." The PMO said Budget 2026 would go further to make Canada one of the most competitive and attractive places in the world for businesses and strategic sectors to invest, build, and grow (The Globe and Mail).
The diversification push extends to Europe. Carney attended the Canada-EU Summit in Brussels on June 23, 2025, where he was welcomed by European Council President Antonio Costa and European Commission President Ursula von der Leyen (The Globe and Mail).
Ottawa has also moved to open energy export channels. Carney is looking to export Canadian oil and gas to new markets in response to the trade war (Reuters). Canada faces a two-front trade conflict: as of late September 2025, Carney was dealing with tariff disputes involving both the United States and China (Reuters).
The federal government has rolled out a layered suite of financial supports for affected businesses. On Sept. 5, 2025, Carney launched new measures including a $5-billion fund with flexible terms to help firms in all sectors impacted by tariffs adapt and diversify (Prime Minister's Office). That same day, the government detailed the Regional Tariff Response Initiative, a $450-million fund to support small and medium-sized enterprises directly or indirectly impacted by U.S. tariffs (Prime Minister's Office). On Sept. 8, 2025, Carney announced major investments for Atlantic Canada, including $1 billion for small and medium-sized enterprises to diversify their markets, with $80 million of the Regional Tariff Response Initiative allocated to the region (Prime Minister's Office).
Support has continued to expand through 2026. On May 4, 2026, the government announced an additional $1.5 billion to support Canadian businesses facing tariff-related pressures (Government of Canada). In September 2026, Minister Valdez highlighted substantive support for workers and businesses as part of a $7.5-billion package of new and enhanced measures for those affected by U.S. tariffs (Government of Canada).
Regional disbursements have targeted specific communities. In August 2026, the government invested over $30 million to help B.C. businesses navigate trade disruptions and over $10 million for Lower Mainland businesses (Government of Canada; Government of Canada). Support was also announced for businesses and workers in Hamilton through the Regional Tariff Response Initiative (Government of Canada).
Public sentiment appears to back the government's posture. A poll found 76 per cent of Canadians approve of Carney's decision to suspend trade talks with the United States (Reuters).
The broader context here is a government attempting to reorient Canadian economic policy under sustained external pressure. The Carney government's approach pairs immediate tariff relief for affected firms with structural bets on non-U.S. trade diversification, energy exports to new markets, and a competitiveness-focused Budget 2026. The $7.5-billion envelope for workers and businesses, layered across national funds and regional programs, signals Ottawa's view that the trade disruption is not transitory. Whether the diversification goal of doubling non-U.S. trade over a decade can offset the immediate economic cost, including the estimated 90,000 jobs at risk, will depend on how quickly new trade channels and investment flows materialize.
