Ottawa shakeup watch
Thanks for reading Canada Playbook.
In today's edition:
→ Canada puts POTUS on read.
→ Ottawa's bracing for a late-summer shakeup in the senior ranks.
→ Canada's embassies are in play. Who's packing their bags?
Trade war
SPEND LESS, INVEST LESS — Prime Minister MARK CARNEY warned Tuesday that Canadian investment in the United States — already among the highest in the world — could decline if trade relations deteriorate.
— Decoding the PM: Carney used his economist voice to define the stakes during an event in British Columbia focused on measures to ease the impact of lumber tariffs.
'Canada is the second-largest investor in the United States today in the world. We have 40 million people,' Carney said. 'Without an agreement, there will be less by definition.'
— Call him maybe: The PM seems in no rush to get POTUS on the horn. 'We'll speak when it makes sense,' he said.
Carney did drop some hints that he's open to removing some U.S. tariffs if it would help Canadian industries. CATHARINE TUNNEY of CBC News has that story.
— USMCA clock: The prime minister also signaled little urgency to start the review of the U.S.-Mexico-Canada Agreement, set for next year, saying it would begin 'about nine months from now.' The first joint review of the deal is scheduled for July 1, 2026.
Canada-U.S. Trade Minister DOMINIC LEBLANC told POLITICO last week that he spoke with his Mexican counterpart about kickstarting renewal talks 'as early as this fall.'
— Meanwhile in Mexico: Foreign Affairs Minister ANITA ANAND and Finance Minister FRANÇOIS-PHILIPPE CHAMPAGNE will spend their second day in Mexico today meeting with business leaders and Mexican lawmakers.
The Canadian Press reported the ministers are scheduled to speak with reps from the banking, mining, aerospace, railways, pension, pharmaceutical and agri-food sectors.
On Tuesday, they met Mexican President CLAUDIA SHEINBAUM and members of her Cabinet. The discussion lasted more than an hour, Anand said.
— No luck: Both ministers punted reporters' attempts to extract how Sheinbaum managed to win a 90-day pause on new tariffs when Canada did not.
Anand called attempts to compare negotiation efforts 'somewhat superficial' becauseCanada's relationship with the U.S. is so complex. 'We really do need to understand that that complexity drives the entire negotiation,' she added.
— A big hint: Mexico never retaliated against Trump tariffs.
Over the weekend, U.S. Trade Representative JAMIESON GREER drew a straight line between Canada's sustained retaliation and Trump's newest tariffs.
'The only other country in the world who retaliated on tariffs was the Chinese,' Greer said on CBS News. 'If the president's going to take an action and the Canadians retaliate, the United States needs to maintain the integrity of our action. … So we have to go up too.'
— Vibe check: U.S. Ambassador PETE HOEKSTRA offered a different take yesterday on CBC's 'Power & Politics.'
'I think it's because of the feeling in the room or the energy in the room when negotiators are talking to each other,' said Hoekstra, who acknowledged he wasn't in the room.
TALK OF THE TOWN
MUSICAL CHAIRS — This week marks MICHAEL SABIA's one-month anniversary as head of the federal bureaucracy.
The fishbowl has spent summer betting on a Sabia-driven shakeup of the senior ranks in the public service. The thinking is that he needs a new squad of doers purpose-built for a Carney-era mission.
And it's not just deputy ministers and their ADM underlings who are the subject of hypothesizing.
There's also a shrinking group of former Liberal ministers passed over for post-election side gigs or pay bumps.
And pay attention to all the plum diplomatic postings in key European capitals that are — and could be — on offer.
Join us for some overdue speculation with the return of the House six weeks away.
— Pent-up demand: KATHRYN MAY, a plugged-in minder of the bureaucracy beat, wrote in June for Policy Options that 'all eyes' are on Sabia's ambition for renewal. May identified high-profile departments to watch: Finance, Infrastructure and Housing, Natural Resources and the Treasury Board.
'Or even [the Privy Council Office] itself,' she wrote, 'which some insiders say has become top-heavy and stretched beyond its lane.'
Soon after, The Hill Times got in on the action. A few days later, the Globe's ADAM RADWANSKI worked up a blueprint to 'make Ottawa move fast and build things.'
DAVID MCLAUGHLIN, the former head of Manitoba's public service, crafted his own recommendations for the Globe and decoded Sabia's first message to public servants (which the new boss circulated to employees on Day 1).
— Not if, but when: Keep an eye on the PMO website for 'changes to the senior ranks of the public service.'
— Now what? Place your bets.
OPEN FOR WORK — Carney's pre-election and post-election Cabinet overhauls left several high-profile ministers, and several other ministry rookies, on the outside looking in.
Most have since landed post-election income bumps as parliamentary secretaries, committee chairs or House officers — nods to their loyalty, skill sets or work ethic.
Here's the list of formers who have managed a few new duties:
→ Parliamentary secretaries: KODY BLOIS, RACHEL BENDAYAN, ALI EHSASSI, JENNA SUDDS.
→ Committee chairs: TERRY DUGUID, KARINA GOULD, MARC MILLER, JEAN-YVES DUCLOS, AHMED HUSSEN.
→ Deputy House officers: ARIELLE KAYABAGA, ÉLISABETH BRIÈRE.
→ NSICOP: DARREN FISHER, GINETTE PETITPAS TAYLOR.
Here's the list of those who haven't received more than the basic MP salary:
→ House committee members: BILL BLAIR, TERRY BEECH, NATE ERSKINE-SMITH.
→ Not even a committee: JONATHAN WILKINSON.
GLOBAL JOB BOARD — All the swirling talk of reassignment for bold-faced names inevitably runs into a slew of postings that will or could come available in European power centers where Carney hopes to deepen relationships.
— Brussels: AILISH CAMPBELL recently wrapped up her time as ambassador to the EU following more than four years in the role. URSULA VON DER LEYEN, the president of the European Commission based in that city, is on Carney's speed dial.
— Paris: The keys to the ambo's classy official residence aren't officially up for grabs. But at the end of May, STÉPHANE DION reached the three-year mark as ambassador to France — the first stop on Carney's inaugural overseas trip as prime minister.
— Berlin: Canada has been without a top envoy in Germany since former ambassador JOHN HORGAN died last November. Dion, the former ambo, is only one country over — and is also Canada's special envoy to the EU, a gig that dates to 2017. But a full-time head of mission befits the times.
— London: RALPH GOODALE passed the four-year mark as high commissioner to the U.K. back in April.
EXHALE — Thanks for indulging us on all the moving and shaking that could transpire as cicadas make way for crickets in the nation's capital. Now: Tell us what you're hearing.
LOBBY WATCH
Our daily check-in on federal lobbyist registrations and notable meetings around town:
— Mississaugas of Scugog Island First Nation met last week with Indigenous Services Minister MANDY GULL-MASTY. Top priority: 'Concerns over the activities of certain groups and individuals falsely claiming Indigenous heritage and status.'
— The Climate Caucus, a nonprofit that advocates for policy change in local governments, logged recent meetings with Liberal MPs BRUCE FANJOY, JONATHAN WILKINSON, JENNIFER MCKELVIE, ERIC ST-PIERRE, BARDISH CHAGGER, SHANNON MIEDEMA, JAIME BATTISTE and PATRICK WEILER. Among the group's priorities: emission reductions, high-speed rail, home building, electric grid expansion and 'changes to current industry tax allowances.'
— Troilus Gold Corp. posted recent meetings with Industry Minister MÉLANIE JOLY, 'One Canadian Economy' Minister DOMINIC LEBLANC, Finance Minister FRANÇOIS-PHILIPPE CHAMPAGNE, Environment Minister JULIE DABRUSIN and parlsecs CLAUDE GUAY and CARLOS LEITíO.
THE ROOMS THAT MATTER
— The PM will chair a virtual meeting of Cabinet at 10 a.m. At 1:30 p.m., he will chair a First Ministers' Meeting.
Want more POLITICO? Download our mobile app to save stories, get notifications on U.S.-Canada relations, and more. In iOS or Android .
MORNING MUST-CLICKS
— The Globe's TEMUR DURRANI and MIKE HAGER have the latest on wildfires in Manitoba and Newfoundland with Nova Scotia on high alert.
— From CHRISTOPHER NARDI at the National Post: Carney suggests he's considering rescinding Online News Act.
— TONDA MACCHARLES and ALEX BALLINGALL break down the current state of the trade war.
— Our colleagues in Europe report: 'The handshake trade deal between the EU and the U.S. has come under a lot of fire, but EU officials insist it's the best the bloc could do if it wanted to avoid a damaging tariff war with Donald Trump.'
— Tyee contributing editor ANDREW NIKIFORUK looks at Alberta's new rules for Covid immunization, 'a program that is not only punitive but discriminatory, bureaucratic and Soviet in nature.'
PROZONE
The latest Pro Canada PM subscriber newsletter: Carney's slow walk back to Trump.
Our latest headlines for POLITICO Pro readers:
— The energy industry is counting on the AI boom.
— How Big Oil got Gavin Newsom to change his tune.
— Another Burgum order coldcocks solar and wind.
— Britain is about to start fracking fight again.
— California EV market share continues decline on back of Tesla slump.
PLAYBOOKERS
Birthdays: Liberal MP HEDY FRY and former MP BRUCE HYER.
Noted: President DONALD TRUMP said Tuesday he would 'probably not' run for a third term (which, for the record, the U.S. Constitution is not supposed to allow).
Advance voting days in Battle River-Crowfoot by-election open this Friday and run through Monday, 9 a.m. to 9 p.m. local time.
Spotted: LAURA DAWSON, executive director of the Future Borders Coalition, receiving the King Charles III Coronation Medal.
Movers and shakers: CARLENE VARIYAN is now a partner at Summa Strategies, where JOSIE SABATINO was promoted to vice president … MATTHEW WIGMORE is now a senior adviser at Framepoint Public Affairs … CAROLINE DIGNARD and HEIDI BONNELL joined the Canada Media Fund board of directors.
BRIGITTE PELLERIN has published an e-book on Liberal MP BRUCE FANJOY — 'the story of his campaign to unseat the man so many assumed would be prime minister.'
TRIVIA
Tuesday's answer: ALEX COLVILLE designed six coins for Canada's 1967 Centennial.
Props to ADAM C. SMITH, BOB GORDON, MARCEL MARCOTTE, JOHN MERRIMAN, MARC SHAW, JOHN ECKER, SCOTT MCCORD, RAY DEL BIANCO, RANDY ALLAN, GREG MACEACHERN, JOHN PEPPER, ANDREW BALFOUR, ELIZABETH BURN, DOUGLAS HEATH, MALCOLM MCKAY, DARRYL DAMUDE, JOHN ALHO and ROBERT MCDOUGALL.
Wednesday's question: What gift did President Trump present to PM Carney during his trip to Washington in May?
Answers to canadaplaybook@politico.com
Writing tomorrow's Playbook: MICKEY DJURIC and NICK TAYLOR-VAISEY.
Canada Playbook would not happen without: Canada Editor Sue Allan, editor Willa Plank and POLITICO's Grace Maalouf.
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