Mark Carney throws shade at Trump’s America as he announces massive economic turnaround

OTTAWA (Reuters) – Canadian Prime Minister Mark Carney said on Wednesday his government’s first budget will reduce economic and security dependence on the United States and reduce unnecessary spending.

Carney, who was elected in April, emphasized that his government’s inaugural budget will focus on both austerity and big investments as it seeks to protect the Canadian economy from what he has called a crisis caused by a new American protectionism.

“The decades-long process of an increasingly close economic relationship between the Canadian and American economies is over,” Carney said in a televised speech to a group of university students.

“Many of our former strengths, based on close ties with the United States, have become our vulnerabilities,” he said.

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As U.S. tariffs hit Canada’s steel, aluminum and auto sectors, Carney has pledged to double the country’s exports outside the United States over the next decade. Diversification will generate an additional C$300 billion, he said.

Carney, under pressure to stimulate growth and assert Canada’s sovereignty, has promised a massive increase in spending on defense and housing infrastructure.

But it also lost revenue due to tax cuts, eliminated retaliatory tariffs to try to reach a deal with US President Donald Trump and spent on relief measures for industries hit by tariffs, straining government coffers. His government has asked all ministries to cut spending.

In his speech, he said the budget will present a strategy to reduce unnecessary expenditure and boost efficiency. “When we have to make difficult decisions, we will be thoughtful, transparent and fair,” he said.

Economists predict the government’s fiscal deficit for 2025/26 will be between C$70 billion and C$100 billion, one of the largest in decades and a huge jump from the C$43 billion projected for the fiscal year that ended in March 2025. The budget, to be presented Nov. 4, will help catalyze “unprecedented” investments in Canada during the next five years, Carney said. It plans to balance the operating budget in three years and said it will include a climate strategy.

But the budget, a major test for Carney, cannot be passed unless his minority government gains the support of some members of the opposition.

In an outreach effort, Carney met with leaders of other political parties on Wednesday, including main opposition leader Pierre Poilievre, who has urged moderating the deficit.

“We won’t play games. We won’t waste time. And we won’t stop. We will do whatever it takes,” Carney said in his comments.