Since taking office on March 14, 2025, Prime Minister Mark Carney has brought a distinctly technocratic style to Canadian leadership. With a background as Governor of the Bank of Canada and the Bank of England, Carney entered politics with no prior elected experience but his rapid ascent and decisive early actions have already reshaped Canada’s domestic and international posture. From housing reform to global trade diplomacy, Carney’s first six months have been marked by ambition, pragmatism, and a clear break from the Trudeau era.
Housing: From Crisis to Construction
Carney’s housing strategy is the centerpiece of his domestic agenda. With affordability at historic lows and homelessness rising in major cities, his government launched the Build Canada Homes initiative, aiming to double annual housing starts to 500,000 units.
🔹 Real-world impact:
- In Vancouver, federal land near transit hubs is being repurposed for modular housing, with 3,200 units approved in partnership with Indigenous developers.
- In Toronto, a pilot program offers zero-interest loans for first-time buyers of newly built units under $500,000.
- The federal government has committed $6 billion in grants for deeply affordable housing, including $1.2 billion for student housing near major universities.
Carney’s approach blends market incentives with public investment, reviving tools like the MURB tax credit and streamlining zoning approvals through federal-provincial compacts.
Economic Headwinds and Trade Tensions
Canada entered a technical recession in early 2025, with GDP contracting for two consecutive quarters. The downturn was worsened by U.S. tariffs on Canadian steel, aluminum, and auto parts some reaching 35%.
🔹 Carney’s response:
- He rolled back Trudeau-era retaliatory tariffs, including a 25% surcharge on U.S. agricultural goods, to de-escalate tensions.
- He paused the digital services tax, which had drawn criticism from U.S. tech firms and risked retaliatory action.
While some critics argue Carney conceded too much, others see his moves as strategic diplomacy to stabilize Canada’s largest trading relationship.
One Canadian Economy Act: Breaking Internal Barriers
Carney’s first major legislative win was the One Canadian Economy Act, designed to eliminate interprovincial trade barriers that cost the economy billions annually.
🔹 Examples of reform:
- Alberta beef can now be sold in Quebec without redundant inspections.
- Ontario-based clean tech firms can bid on infrastructure projects in British Columbia without separate provincial certifications.
The Parliamentary Budget Office estimates this reform could boost GDP by $50 billion over the next decade.
Defence and NATO: Reassurance and Renewal
Carney renewed Canada’s military mission in Latvia through Operation Reassurance, extending it to 2029. However, a visit to the Adazi base revealed troubling logistics: 30% of Canadian personnel were sidelined due to vehicle shortages.
🔹 Strategic moves:
- Carney pledged to meet NATO’s 2% GDP defence spending target, increasing Canada’s defence budget by $15 billion annually.
- Procurement of new armoured vehicles and surveillance drones is underway, with contracts awarded to firms in London, Ontario and Montreal.
This marks a shift toward readiness and modernization, aligning Canada more closely with European defence priorities.
Digital Transformation: Rewiring Government
Carney launched the Office of Digital Transformation, aiming to overhaul federal services and internal operations.
🔹 Key initiatives:
- $4.4 billion committed to modernize the Benefits Delivery Modernization (BDM) program.
- AI integration in immigration processing, fraud detection, and tax compliance.
- A digital ID pilot launched in Ontario and British Columbia, with plans for national rollout by 2026.
The goal: make government services “as seamless as Netflix,” with faster, smarter, and more secure delivery.
Canada and Mercosur: Trade Talks Restart
After years of stalled negotiations, Canada and the Mercosur bloc (Brazil, Argentina, Uruguay, Paraguay) have resumed trade talks.
🔹 What’s on the table:
- Preferential access to Canadian critical minerals.
- Reduced tariffs on South American beef, soy, and lithium.
- Joint ventures in agri-tech and clean energy, with a Brazilian delegation visiting Toronto in September.
This reflects Carney’s push to diversify trade beyond North America.
Germany and EU LNG Deal: A New Energy Axis
Germany and the EU signed a framework agreement to import Canadian LNG, reversing Trudeau-era skepticism about transatlantic exports.
🔹 Infrastructure highlights:
- A new LNG-capable port in Churchill, Manitoba, co-financed with $3.2 billion in federal funds.
- Expansion of Montreal’s Contrecoeur terminal, with construction beginning in early 2026.
This positions Canada as a key supplier of low-carbon LNG to Europe, replacing Russian gas and boosting Canadian exports.
Major Projects Office: Fast-Tracking Nation-Building
The Major Projects Office (MPO), launched in August 2025, accelerates approvals for infrastructure projects.
🔹 Projects in motion:
- Grays Bay Road and Port in Nunavut: a $1 billion Arctic corridor connecting mineral-rich lands to global markets.
- Wind West transmission line in Nova Scotia: powering 27% of Canada’s electricity needs with offshore wind.
- Kitimat LNG terminal in BC: poised to become Canada’s largest energy export hub.
Led by Dawn Farrell, the MPO promises to cut approval timelines from five years to two.
Eastern Europe: Strategic Trade and Defence Partnerships
Carney’s August tour of Eastern Europe yielded deals with Poland, Latvia, and Lithuania.
🔹 Key outcomes:
- Defence procurement agreement with Poland, allowing Canadian firms to bid on the €150 billion ReArm Europe initiative.
- Cybersecurity aid to Latvia: $500 million pledged for infrastructure and training.
- Critical minerals agreement with Germany, focusing on Ontario and Quebec lithium and nickel.
These deals deepen Canada’s role in Europe’s energy and defence strategy.
Global Business Relations: A Post-Trudeau Rebound
Under Carney, Canada’s business ties have expanded significantly.
🔹 Examples:
- India reopened trade talks and student visa programs.
- Japan signed hydrogen export MOUs, with Alberta pilot projects underway.
- UK launched joint ventures in green bonds and carbon markets.
This diplomatic thaw is translating into real investment and market access for Canadian firms.
Investment Surge: Billions Flowing into Canada
Since Carney took office, Canada has seen a dramatic rise in investment.
🔹 By the numbers:
- Over $500 billion in infrastructure commitments, including ports, railways, and clean tech hubs.
- The Canada Growth Fund backed 340 energy projects, from battery plants to hydrogen facilities.
- Foreign direct investment from Germany, Japan, and the UK rose 18% year-over-year, according to Statistics Canada.
Investor confidence is high, driven by Carney’s fiscal discipline and regulatory clarity.
Positioning Canada for Success: Carney’s Strategic Blueprint
Carney’s vision rests on five pillars:
- Economic Diversification Expanding trade with Mercosur, the EU, and Asia. Example: $5 billion Trade Diversification Corridor Fund to build new export routes.
- Nation-Building Infrastructure Fast-tracking megaprojects through the MPO. Example: Grays Bay, Wind West, Churchill LNG.
- Clean Energy Leadership Investing in renewables, critical minerals, and carbon capture. Example: Canada’s first tidal energy pilot in Nova Scotia.
- Digital Transformation Overhauling government services and internal operations. Example: AI-powered immigration processing and digital ID rollout.
- Fiscal Discipline Cutting operational growth from 9% to 2%, while maintaining strategic investments.
This blueprint blends Carney’s global experience with a pragmatic, data-driven style that aims to make Canada more resilient, competitive, and future-ready.
2026: A Year of Strategic Opportunity
Looking ahead, 2026 will be a defining year. Canada will prepare for the CUSMA review, renegotiate key trade terms with the U.S. and Mexico, and continue building its reputation as a reliable partner in energy, defence, and innovation.
The fall budget will likely include:
- Expanded funding for housing and infrastructure.
- New incentives for clean tech and AI development.
- Increased defence spending to meet NATO targets.
Canada’s positioning is clear: a stable democracy with a skilled workforce, abundant resources, and a government focused on long-term prosperity.
The Big Picture: A Nation Reimagined
Despite global headwinds, Canada is charting a bold course. The next few months will be about execution turning plans into progress, and promises into tangible change. With strategic investments, renewed global partnerships, and a focus on inclusive growth, Canada is not just recovering it’s reinventing itself.
And for Canadians, that means more opportunity, more security, and a future built not just to withstand shocks but to thrive beyond them.