Canada adopts a new industrial policy in light of geopolitical challenges

Last March, Canadians chose Mark Carney as Prime Minister, considering him the official most capable of dealing with the unprecedented pressures resulting from the protectionist policy pursued by US President Donald Trump and his clear contempt for their country’s sovereignty.

A key element of Carney’s response to this was his strong commitment to strengthening the country’s capacity through strong government involvement in the economy and a broad industrial policy in light of the current geopolitical challenges.

Carney established an Office of Major Projects to remove regulatory hurdles, coordinate support for infrastructure development, and identified a series of new industrial projects that would initially benefit from his efforts, with the promise of more projects in the future.

After announcing a significant increase in military spending, he created a new Defense Investment Agency to streamline procurement processes while maximizing production within Canada, and unveiled a new program to address Canada’s housing crisis, which includes a direct state role in construction.

To cover the costs of all this, Carney intends to change the way the deficit is managed in areas that need investment, while limiting spending in other areas related to Canadian well-being.

Although his Liberal government does not have a majority in Parliament, Carney has received enough support to pass a budget to fund his plans, and to remain in office for the time being.

Industrial policy

This shift to industrial policy is only understandable in light of the radical change in the US approach to Canada with the return of Trump, who imposed tariffs on Canadian exports of steel and aluminium, automobiles, energy and critical minerals, and lumber.

He also repeated his previous criticism of declining Canadian defense spending, while questioning the United States’ commitment to NATO, which is one of the pillars of Canada’s security policy, and he shocked Canadians by repeating his proposal to annex their country to the United States.

Trump has made a profound impact on Canadian domestic politics. Former Liberal Prime Minister Justin Trudeau, unpopular after nearly 10 years in office and burdened by a weak economy, has confirmed that he will not run again.

At first, it seemed that no matter who led the Liberals next, the Conservatives, led by the foul-mouthed Pierre Poilievre, would gain power.

Difficult circumstances

However, as Canadians grew increasingly wary of Trump, the Liberals chose Mark Carney to lead their election campaign.

Carney is not considered a professional politician, but rather an economist who graduated from Oxford University and is a former investment banker at Goldman Sachs.

Carney, who served as head of the Bank of Canada and the Bank of England, has the serious appeal that Canadians are looking for in these difficult circumstances, and this was helped by the fact that Poilievre’s harsh rhetoric, and his noticeable similarity to Trump, became a burden on him.

Carney led the Liberals to victory in late April, yet he did not obtain a majority, influenced by the immediate pre-election period in which Trump focused on issues other than Canada, allowing voters to refocus on their grievances during a decade of Liberal rule.

However, with not enough opposition members willing to force an election, Carney’s government appears viable for the time being, as indicated by its narrow victory in last November’s 17th vote on his budget. About “National Interest”

• The Prime Minister of Canada intends to change the way the deficit is managed in investment areas, while reducing spending in areas related to welfare.

• Trump imposed tariffs on Canadian exports of steel, aluminium, automobiles, energy, critical minerals, and lumber.