Is Carney’s trade strategy working? Canadian jobs, exports and GDP reveal gains and continuing risks

THUNDER BAY — Federal Conservatives are pressing Prime Minister Mark Carney to make resolving the trade dispute with the United States his top priority, as new American import bans add pressure on Canadian businesses.

The latest economic figures offer a mixed assessment of the Liberal government’s response: Canada recorded stronger growth and expanding overseas exports through the spring and early summer, but the trade dispute remains unresolved. Recent job losses and renewed American restrictions threaten those gains.

For Northwestern Ontario, the question reaches beyond Parliament Hill. Businesses need dependable markets, manageable costs and the confidence to invest.

The evidence shows resilience, but no trade breakthrough

There are two different tests of the government’s performance: Has it restored stable access to the American market? And is it strengthening Canada’s ability to withstand trade disruptions?

On the first, a comprehensive resolution remains elusive. On the second, there are encouraging economic indicators, although they cannot establish how much improvement resulted from federal policies.

The Bank of Canada’s Sept. 2 assessment described a broadening economic recovery, while warning that new U.S. tariffs and further threats could undermine it. That is a more defensible conclusion than declaring either complete success or complete failure.

What the Conservatives say — and what needs correcting

In their Oct. 2 statement, Conservative critics Stephanie Kusie and Shuvaloy Majumdar accused International Trade Minister Maninder Sidhu of failing to prioritize the bilateral dispute during his encounter with U.S. Trade Representative Jamieson Greer at the G20 trade ministers’ meeting.

Their concern about escalating restrictions is supported by U.S. Customs and Border Protection. Its guidance confirms that bans on specified Canadian products took effect Sept. 29. These are product-specific restrictions, with detailed classifications and exemptions, rather than blanket bans on every Canadian dairy product, alcoholic beverage or vehicle.

However, the suggestion that Sidhu discussed international trade institutions while neglecting Canada–U.S. trade needs qualification.

On Oct. 1 said Sidhu stated that he raised Canada–U.S. trade with Greer, alongside World Trade Organization reforms. It placed their conversation on Wednesday, Sept. 30.

Greer also said his main Canadian negotiating contact is Canada–U.S. Trade Minister Dominic LeBlanc, with whom he speaks frequently. He acknowledged continuing technical talks, while describing unresolved issues as “quite difficult to resolve.”

The Conservatives can reasonably challenge the absence of results. The public record does not support concluding that Canada has abandoned discussions or that Sidhu ignored bilateral trade.

What is the government’s position?

Global Affairs Canada’s Oct. 2 account of the G20 meeting confirmed Sidhu met Greer and conducted a Wisconsin business program promoting cross-border trade and investment.

It also described meetings with other trading partners and efforts to advance negotiations beyond the United States. The release did not announce a bilateral breakthrough or directly answer the Conservative statement.

A negotiated settlement also depends on Washington’s position. Greer said the administration remained open to an agreement but was “not inclined to go to zero tariffs,” according to Canadian Press reporting. A return to tariff-free trade therefore cannot be delivered by Ottawa alone.

What Carney’s government has done since April

Over approximately six months, the federal response has combined business assistance, worker support, domestic reforms and efforts to develop additional markets.

April: advancing trade infrastructure. Carney highlighted the Contrecœur container-terminal expansion at the Port of Montréal, supported by approximately $1.16 billion in Canada Infrastructure Bank financing. The project is intended to expand the port’s capacity by about 60 per cent, with full operations targeted for 2030.

This advances a long-standing project; it is not new shipping capacity already available to exporters.

April: temporary fuel-tax relief. The government announced suspension of federal excise taxes on gasoline and diesel from April 20 through Sept. 7. The announced reductions were 10 cents per litre for gasoline and four cents for diesel. The measure addressed the wider energy-price shock, including pressure on transport and business costs, rather than resolving American tariffs.

April: skilled-trades investment. The government announced Team Canada Strong, a $6-billion initiative intended to recruit, train and hire 80,000 to 100,000 additional Red Seal trades workers over five years. These are program targets, not a count of workers already trained.

Summer: reducing domestic trade obstacles. Ottawa continued work with provinces and territories on mutual recognition of goods, trucking rules and labour mobility. In August, LeBlanc identified further work on construction requirements, services and professional credentials. These efforts could make Canadian markets easier to serve, but outstanding provincial and territorial barriers mean the work is unfinished.

August and September: additional tariff-response assistance. On Aug. 25, Ottawa announced a $7.5-billion packagecomprising:

• $1.5 billion more through the Regional Tariff Response Initiative.
• A $500-million business-liquidity stream.
• $2 billion for a Canada Strong Diversification Fund.
• $3.5 billion in worker and employer supports, including employment insurance flexibility, retention and training measures.

It also announced counter-tariffs covering $27.6 billion in U.S. imports, effective Sept. 8. These figures describe announced measures and funding envelopes; they do not establish that every dollar has reached recipients.

September: attracting investment. The Prime Minister’s Office said agreements at the Canada Investment Summit would catalyse nearly $500 billion in investment. That is a government claim about prospective investment, not $500 billion already spent or added to GDP. Delivery, financing and construction will determine the eventual economic benefit.

What the statistics actually show

The figures available as of Oct. 3 show improvement followed by signs of vulnerability.

Sources: Statistics Canada’s second-quarter GDP, August Labour Force Survey, July merchandise-trade and August inflation releases.

The quarterly GDP increase is equivalent to approximately 3.3 per cent at an annualized rate. It does not mean Canada’s economy grew 3.3 per cent in three months.

Diversification is progressing, but the U.S. remains essential

July’s record overseas exports provide evidence that Canadian businesses are finding additional customers. Countries outside the United States received 33.7 per cent of Canadian merchandise exports that month.

However, total merchandise exports still fell 2.3 per cent. The overseas gains did not fully offset the decline in American sales. Lower crude-oil and gold exports helped explain the U.S. decline, so it would also be misleading to attribute that entire monthly movement to tariffs.

Diversification should therefore be assessed through sustained sales growth across products and markets. A rising overseas share alone is insufficient: that share can increase when American sales fall.

Households are not experiencing an effortless recovery

Average hourly wages rose 2.0 per cent year over year in August, below the 3.0 per cent increase in consumer prices. These broad measures suggest continuing purchasing-power pressure, although individual households’ experiences vary.

Grocery prices were still 29 per cent higher than in August 2021. Slower inflation means prices are rising less quickly; it does not mean the earlier increases have disappeared.

The Bank of Canada also warned that Canadian counter-tariffs could increase business costs and eventually consumer prices. Retaliation may serve negotiating and industrial-policy objectives, but it is not cost-free.

Why it is too early to credit — or condemn — the newest measures

The strongest growth figures cover April through June. The latest merchandise-trade figures cover July, before the August tariff escalation and September import bans.

August trade data are scheduled for Oct. 6, while September employment figures are due Oct. 9. Even those releases will not capture the full effect of restrictions introduced Sept. 29.

Nor can national GDP and employment figures isolate a prime minister’s contribution. Interest rates, commodity prices, population changes, business decisions and foreign demand also influence results.

Measuring the support programs themselves requires evidence about funds disbursed, businesses assisted, jobs retained and investments completed.

What this means for Thunder Bay and Northwestern Ontario

For this region, the practical test is whether forestry businesses, manufacturers and suppliers can maintain sales while developing additional customers. Infrastructure and skilled-trades initiatives may create opportunities for construction firms, mining suppliers and Indigenous businesses, but announcements must become contracts and paid work.

National averages also need careful interpretation. A growing economy can coexist with serious losses in a particular mill town or export-dependent industry.

The Conservatives are justified in demanding progress toward a stable American trade relationship. Their broader claim that the government’s efforts have secured nothing overlooks measurable economic gains and concrete support measures.

The evidence supports a narrower assessment: Canada showed meaningful resilience before the latest escalation, but Carney has not resolved the trade dispute, and the effectiveness of his newest protective measures remains unproven.