Prime Minister Mark Carney is greeted by RioTinto employees in Saguenay last week. Canada’s economy has proven remarkably resilient since the election of Carney as PM in March, 2025, writes Andrew Phillips.
Canada is staring down the barrel of yet another tariff threat from U.S. President Donald Trump, and pretty much everyone is telling Prime Minister Mark Carney to be super careful about making any more “concessions” to the United States.
In this case, pretty much everyone is right. The government has tried making nice with the Trump administration on a string of issues — retaliatory tariffs, digital taxes, the Gordie Howe bridge — and gotten nothing for it.
Worse than that, every concession is taking as a sign of weakness, to be followed by yet another demand. The public sees this clearly: an Angus Reid poll shows a bare seven per cent of Canadians think Carney should make more concessions to head off the 50-per-cent tariffs Trump is threatening to slap on at the end of next week.
Almost two-thirds (62 per cent) support responding in kind, with more counter-tariffs. Canadians are in no mood to give up anything more to the U.S. without ironclad guarantees they’ll get something concrete in return.
At the same time, everyone can also see an agreement with Trump may be meaningless. Nothing he signs can be counted on. It’s “heads I win, tails you lose” every time — and Carney will pay a heavy political price if he caves to Trump’s demands and Canada finds itself dealing with yet another threat the day after some sort of “deal” is announced. The Conservatives know this, which is why they’ve jumped on the “no more concessions” bandwagon.
All that provides ample reason for Canadians and their government to stand firm as Trump’s Aug. 19 deadline for imposing those new tariffs approaches.
But there’s another reason as well, one that hasn’t had as much attention as Trump’s terrible track record on responding to good-will gestures from others and keeping his own word.
Canada’s now been dealing with tariffs and tariff threats for a year and a half. If a lot of the expert forecasters were right, we ought to be on our knees by now, offering up whatever it takes to stop the pain.
But the fact is the Canadian economy has proven remarkably resilient, all things considered. We’re not on our knees; on the contrary, we’ve taken their punches and are still very much in the fight.
On this front, a commentary last week by Matthew Winkler, editor-in-chief emeritus of Bloomberg News, is highly instructive. Winkler focused on the flood of investment pouring into Canada over the past year — $256 billion. Foreign companies spent more than $44 billion in the second quarter of this year acquiring Canadian assets — “the country’s largest such investment from overseas since 2007.”
As Winkler put it in an interview with Bloomberg: “Money is pouring into Canada like we have not seen, from everywhere.” One result is the Canadian stock market soared more than any other in the world’s top ten — up 41 per cent since Carney became PM in March, 2025.
Of course, the stock market isn’t the economy. But the fact that overseas investors are buying into Canada is a huge vote of confidence in the country’s future precisely at the time when there’s a big question mark over our trading relationship with the U.S. If foreigners saw Canada only as a side door into the United States, would they be making such a big bet?
Winkler links this to Carney’s pro-business policies and his relentless drive to open new trading relationships with other countries to counterbalance the unreliable country next door. Foreigners also see Canada as a reliable, predictable place to invest — again in contrast to Trump’s America.
There are lots of positive signs in the real economy, as well. We’re no longer talking about a “technical recession,” as we were in early 2026. Economists are revising their forecasts upward, after Statistics Canada reported in late July that growth in the second quarter of this year looked to be running at an annualized rate of 3.4 per cent, well above earlier predictions. In July alone, Canada added an impressive 75,000 new jobs (while the U.S. lost 23,000).
Naturally, all is not rosy. The steel, auto and lumber sectors are suffering from Trump’s tariffs and there’s been a chill on domestic investment. It’ll take quite a while for all that foreign investment to turn into new economic activity and for Carney’s big projects to become reality.
But neither is it all gloom. Canada need not tremble before Trump’s latest threats — or rush to offer up more concessions.
