For Mark Carney, every decision has trade-offs — but that's not slowing him down

Hamilton Spectator

6 hours ago

OTTAWA—If there is a Carney 'doctrine' taking shape more than 100 days into the prime ministership of Mark Carney, maybe it is this: get it done, and damn the details.
A few short months ago, Carney was blunt: 'I am a pragmatist above all. So when I see something that's not working, I will change it.'
That's what the former central banker and UN climate finance envoy said when he captured the Liberal party leadership to replace Justin Trudeau. He went on to win the 2025 federal election on his outsider's pitch to rescue the economy from the threat of Donald Trump's tariff war.
Pragmatism was how he justified abrupt domestic moves: ditching the consumer carbon tax, reversing capital gains tax hikes, and lowering income taxes while jamming 'nation-building' red-tape-cutting bills through Parliament to juice the economy.
Pragmatism helps explain why, in his single mandate letter to cabinet ministers, Carney told them, 'We must redefine Canada's international, commercial, and security relationships.'
But in an era where Trump is the one defining Canada's closest relationship, it's not clear if Carney's pragmatism can win over the U.S. president's chaos.
On Friday, the unpredictable Trump cancelled talks towards a new deal with Canada, angry at Canada's deadline Monday for Big Tech giants to pay a digital services tax. Retroactive to 2022, it would collect $2.3 billion at first, and about $900 million yearly after that.
Small potatoes compared to what Carney has already put on Canada's tab.
In hopes of getting along with Trump, Carney in the past week promised to ramp up Canada's spending, along with NATO allies — all under intense pressure from the U.S. president — to a whopping $150 billion a year on military and related spending, a level almost unthinkable last year, as he vows to shift Canadian economic and security ties away from America towards Europe and beyond.
In a spate of a few weeks, Carney signed what he calls a new economic, security and defence partnership with the European Union, increased aid to Ukraine, hosted a
G7 summit
where he offered backing of Trump's leadership efforts to end the Russia-Ukraine war and left a wide open runway for Trump to handle the Iran-Israel conflict as he saw fit.
Carney defended his vow to lead where the U.S. does not, telling CNN it should be seen as a 'positive' not a negative reaction 'against' the U.S. or Trump.
'The way we would like to lead, the way European Union would like to lead, a number of Asian countries as well, is in a positive respect. If the U.S. is pulling back from multilateralism, as it is with respect to trade … effectively U.S. trade policy is now bilateral — if the U.S. is pulling back, there are others of us who do believe in multilateralism,' the rule of law, 'fair and open' trade, and in defence co-operation, said Carney.
'Do something,' seems to be the Carney mantra, said Kerry Buck, a former Canadian ambassador to NATO who welcomed the prime minister's commitment hit the new NATO military spending goal of five per cent of GDP.
Although Justin Trudeau eventually committed to reaching the old NATO two per cent target at the end of last year's summit, he did so without a clear plan and with a 2032 timeline that was 'clearly going to damage our bilateral relations with the U.S. under Trump, where we're very vulnerable on trade,' said Buck, speaking before Trump's move Friday.
In contrast, two weeks ahead of this week's NATO summit Carney accelerated action, said he'd hit two per cent this year, and at the summit adopted the bigger five per cent goal by 2035 with no hesitation.
'
It was smart transactionally to do that. And I think in terms of content, it was also necessary,' Buck said.
Others wonder
how
Carney is going to pay for it all. Questions remain about how the government will reach its two per cent promise this year, with the independent Parliamentary Budget Officer saying it can't verify Carney's plan to hit the old target.
'Some might start to think that he has a guns-before-butter kind of approach to foreign policy … a muscular foreign policy focused on defence,' but Buck said Carney had no choice, given it was 'our most vulnerable point' with the U.S. in ongoing trade talks.
Forget the 'peace dividend' that Canada and other western allies hailed at the end of the Cold War, welcoming the ability to spend less on the military and more on social welfare systems.
Now Carney and the other leaders challenged by Trump are embracing what NATO Secretary General Mark Rutte called a 'defence dividend,' claiming that spending five per cent of GDP on defence will create 'an engine of growth for our economies, driving literally millions of jobs on both sides of the Atlantic.'
Carney echoed the claim, acknowledging higher military spending may one day entail federal spending trade-offs or sacrifices, but for now, 'more of it will help build our economy at the same time as it improves our defence. And we'll get the benefits.'
There is more continuity than many think between Trudeau and Carney: Carney continued the imposition of counter-tariffs against the U.S. that Trudeau launched. But he has withheld tit-for-tat retaliation against the 50 per cent steel and aluminum penalties Trump levied pending the outcome of trade talks. Carney has continued Trudeau's staunch support for Ukraine and its embattled president Volodymyr Zelenskyy. Carney backs a two-state solution to the Israel-Palestine conflict, a ceasefire in Gaza, and went so far as to sanction two Israeli cabinet ministers. Like Trudeau, Carney believes government has a role and responsibility to address climate change.
That Carney has moved swiftly on foreign and defence files is partly due to the flow of the international summits that coincided with his first two months after winning the April 28 election. It's also due to the urgency of the threat posed by the
'tariff'
president in the White House.
Carney, though, has a view of the larger global economic imbalances and the roles of China and the U.S. in those imbalances, that he shares with leaders like France's President Emmanuel Macron, and as they try to persuade Trump to drop tariffs, Carney seeks to position Canada's critical mineral, AI and quantum computing sectors for a world in which those imbalances continue.
Janice Gross Stein said it is too early to describe a Carney 'doctrine' but it's clear 'the fundamental thing for him is that he, like everyone, is defining a path to dealing with a very different United States.'
Carney is of necessity pursuing a new more predictable economic and security deal with the U.S. at a
time of crisis
, 'but it's an eyes-open arrangement,' Stein said. 'Yes, we need to diversify our partnerships — that's not a new idea in Canadian foreign policy … and yes,' Carney is focusing especially on Europe and like-minded states, and NATO, 'but that's built in to dealing with the more demanding United States.'
Stein sees a pragmatic streak too in Carney's overtures to countries like China, India and Saudi Arabia.
Carney identified China as the biggest threat to Canada's national security during the federal election. But in office, he's taken steps to thaw relations and ease Beijing's penalties on Canadian agricultural products. At the same time he is moving to block Chinese steel dumping via higher tariff rates against transshipment countries — in line with U.S. concerns. He rolled out a G7 welcome mat to India's Narendra Modi as a criminal investigation struggles to probe India's role in the killing of a Canadian Sikh in Surrey. And Carney invited Saudi Arabia Crown prince Mohamed bin Salman, the kingdom's de facto ruler, who declined to attend, in a week where the Saudi regime executed a journalist.
Those three countries, China, India and Saudi Arabia are key economic players that are ignored at Canada's peril, said Stein.
'Where he's a pragmatist is in the recognition that every decision has trade-offs. You cannot make it a high priority to diversify your partnerships when you are the smaller next-door neighbour to a country that you are sending 75 per cent of your exports to and buying 75 per cent of everything that you buy in defence from that one country, which is the United States, and then continue to exclude others in the international community.'
In parallel, said Stein, Carney is acting to ensure that Canada's economy is 'fit for purpose.' The
bill
to fast-track 'nation-building' development projects is part of that effort, as is his move to do 'important' consultation with Indigenous groups, but done simultaneously with other reviews, 'not sequentially,' she said.
Carney is 'connecting defence, foreign policy to the Canadian economy because that's his comfort zone,' said Margaret McCuaig-Johnston, a senior fellow in the Graduate School of Public and International Affairs at the University of Ottawa.
But she worries the emphasis on 'pragmatic' sends the wrong signal to countries like China, India or Saudi Arabia which will interpret it to mean Canada is ready to overlook human rights concerns in favour of doing business.
Jonathan Berkshire Miller, director of foreign affairs, national defence and security policy at the Macdonald-Laurier Institute, said Carney is necessarily focused on 'two imperatives: mending the relationship with the United States and diversification from it.'
And while Carney's experience gives him credibility in Washington 'where he is well known among economic and diplomatic elites,' Trump's second term makes traditional diplomatic approaches 'increasingly unrealistic,' he said.
There is an inevitable geographic and economic reality, he said in a written response to the Star. 'America remains Canada's largest trading partner.'
So rather than a drastic shift or severing of ties, he said, 'Expect, instead, a policy of pragmatic hedging: building multilateral ties while trying to be on balanced terms' with who is in the White House.
For now, Carney may have some latitude, he believes. Increased defence spending can bring Canada greater strategic autonomy on Arctic sovereignty, cybersecurity and intelligence sharing.
The narrow question is 'one of political will' where the requirements for sustained federal spending 'and public support' will be the big test, he said, particularly in an era where 'fiscal retrenchment' (Carney has vowed to bring the operating budget into balance) and 'domestic political division are the contemporary realities.'
The broader question is whether Carney's pragmatic approach can secure both.