Canada unveils budget to curb reliance on US - CNA
Canada Prime Minister Mark Carney looks on during a roundtable meeting with business leaders during the Canada-EU Summit, in Montreal, on Oct 29, 2026. (Photo: AP/Christopher Katsarov)
OTTAWA: Canadian Prime Minister Mark Carney's government presents a budget on Thursday (Nov 5) designed to reduce reliance on the United States, which remains Ottawa's priority despite US President Donald Trump's midterm election rebuke.Carney has argued that relations between Canada and the United States have been permanently altered and that pre-Trump tariff-free trade will not return. Carney says Canada needs to urgently diversify its alliances and has named Thursday's budget - his second since taking office last year - "Masters of our Destiny".He told reporters on Thursday that political developments in the United States are "important" and that bilateral relations will "evolve", but his priority remained more "independence"."We're focused here, we're focused on the same issues as we were at the start of the week," before the midterms, he said. Finance Minister Francois-Philippe Champagne, who will present the budget to parliament, said Wednesday that "no matter what happens south of the border, no matter what happens in the world, we will be more resilient, we will be stronger, we will be more independent".Trump's tariffs have battered Canada's economy but the future of the US president's protectionist trade agenda faces uncertainty after his Republican Party suffered a crushing midterm defeat. Democrats, who have been critical of tariffs on Canada, will take control of both the US House and Senate next year.
Senior Democratic Congressman Jamie Raskin told Canada's public broadcaster CBC on Wednesday that his party is "going to put an end to these tariffs" and will be seeking to repair ties "with our best friends like Canada".But Canada's minister responsible for US trade, Dominic LeBlanc, noted Wednesday that negotiations on tariffs will be held with Trump's White House, not Congress. Canada's focus, including in the budget, will be on "diversifying our trading relationships", LeBlanc said. Both Trump and Carney have in recent days sounded optimistic about the prospects of a trade deal, but there were similarly rosy predictions in August before talks broke down.
The budget is expected to allocate funds towards the major national projects Carney has tagged as crucial to Canadian economic sovereignty, including infrastructure for energy production and critical mineral mining. Champagne said there will also be support for workers hurt by Trump's tariffs in sectors like autos and steel. University of Ottawa political scientist Genevieve Tellier noted that implementation of the budget will in part depend on "the impact of tariffs", particularly whether Trump's levies cause further job losses. The Bank of Canada last month raised interest rates for the first time in three years, hoping to tame inflation caused by surging energy prices amid the Iran war. Budget bills in Canada are confidence votes and last year Carney's government needed opposition support and abstentions to survive, but his Liberals have since secured a parliamentary majority.
