July’s economic figures, with a loss of 41,000 jobs, could signal the end of Prime Minister Mark Carney’s honeymoon period. Carney has enjoyed firm support since he won the Liberal leadership at the beginning of the year. His triumph in April’s federal election cemented that support and has sustained his good poll results since. The job losses, however, will not sit well with Canadian voters, especially if they dig deeper and find out that the jobs lost were in the private sector. In contrast, public sector positions continue to grow as a percentage of the job market.
Kirk Lubimov broke down the early part of August into fifteen unflattering depictions of a nation’s economy not only spinning its wheels but in reverse. Here are some lowlights:
Mark Carney announces $700M loan guarantees for the softwood lumber sector.
All this does, as Wyatt Claypool pointed out on his National Telegraph podcast, is prolong the suffering for an industry that needs to become more competitive. If taxes and regulations were reduced, it might give the sector a shot in the arm.
$500M investment to supercharge product and market diversification.
Carney’s answer to every economic problem requires more taxpayer money. Using buzzwords like “supercharge” and “diversification” means the government tranches out more money, hoping people will believe something good will happen. If Carney did not lead the Liberal Party, his economic sensibilities might tell him that fewer taxes and regulations would provide a better route for industries facing competition and challenges. Instead, as the face of a party committed to government spending, he finds himself trapped in the worn-out practice of trying to nurse an industry back to health as opposed to helping it become more competitive.
Companies contracting with the federal government will be required to use Canadian lumber.
This will make modular homes more expensive. The lumber companies’ lack of competition means the inexpensive housing crisis solution will become costlier. They can set prices within the Canadian market with cost certainty because the Liberal government has created a monopoly for these suppliers. Canadians will suffer because of the tariff war, a consequence of their government’s poor strategies.
Mexico’s president said ‘no’ to a bilateral trade deal with Canada.
President Claudia Sheinbaum told Mark Carney that Mexico will not circumvent the United States to make a separate deal with Canada. Another ‘elbows up’ effort that went awry. Carney, or his advisors, have long considered that Canada could make trade deals apart from the United States, lessening President Trump’s tariffs. Carney may face headwinds on other fronts as well.
The trade deficit widened to $5.9B in June; U.S. exports saw a 3.1% monthly increase, though a 12.5% yearly decrease; exports to other countries are down 4.1% month-to-month but up 14.7% year-to-year.
These points taken together tell a story within a story. Even though the U.S. numbers are up monthly, remember that Canada trades roughly 80 per cent with the U.S. Trade being 12.5 per cent lower than last year highlights our economy’s shaky state. The remaining 20 per cent of our trade happens with Europe and the rest of the world. The 14.7 per cent increase does little to offset the harm to American trade. Total exports are way down, and that means tough days are ahead for Canadian workers.
Team Canada still has not attracted a single penny into Canada.
Despite the ‘elbows up’ rhetoric, Canada’s economy remains in a funk. As Claypool noted, productivity depends on investment. Our resources would attract interest from potential players. If Canada refuses to lower taxes, reduce regulations, or provide opportunities for companies to develop our resources, growth will remain stagnant. Businesses invest where they think they can earn a profit. Carney’s government has yet to assure Canadian investors that investing in Canadian resources is worth the risk.
When tax policy shifts, it means that money once confiscated through the CRA now remains in the hands of business leaders to invest. There are no ribbon cutting ceremonies for an office the government has helped fund, no press conferences to bring attention to the prime minister, a cabinet official, or a local MP. Governments, especially those from the Left, have become conditioned to offer slogans and platitudes about protecting Canada’s interests, being united, or joining together to fight U.S. President Donald Trump’s pernicious influence. We need to grow up as a nation. Not every problem needs a new office of Canadian Investment. We don’t need commercials or campaigns that tell us to buy Canadian, avoid America, or fear Trump.
Carney signed Bill C-5 (also known as the One Canadian Economy Act, a piece of Canadian legislation focused on removing interprovincial trade barriers and speeding up the construction of infrastructure projects deemed to be in the national interest.) Rather than use this legislation to fast-track development, he immediately went to indigenous groups and climate activists to assure them they would be consulted. New developments may not be funded if investors fear blockades, interruptions, and project interference.
Carney’s honeymoon with Canadian voters hangs in the balance. If he does not soon consummate trade deals, act on his promises to Canadian investors, and start bringing home a bouquet of positive job numbers, he may find himself sleeping on the proverbial couch with the prospect of voters’ eyes wandering to who might better serve their interests.
Dave Redekop is a retired elementary resource teacher who worked part-time at the St. Catharines Courthouse as a Registrar until being appointed Executive Director at Redeemer Bible Church in October 2023. He has worked on political campaigns since high school and attended university in South Carolina for five years, earning a Master’s in American History with a specialization in Civil Rights. Dave loves reading biographies.
