Canada Minute: Issue 28

Canada Minute - Your weekly one-minute summary of Canadian politics.

📅 This Week In Canada: 📅

• US President Donald Trump has threatened to impose a 35% tariff on some Canadian goods, but items that comply with the Canada-US-Mexico Agreement (CUSMA) will be exempt. The proposed tariff would apply to goods already facing 25% tariffs, while tariffs on potash and energy are expected to remain at 10%. Prime Minister Mark Carney has criticized the move but reaffirmed Canada’s commitment to defending workers and businesses, while also setting a revised trade negotiation deadline of August 1st. Trump claimed the proposal was shared with Canadian officials and "fairly well-received," though some experts believe the US is increasing pressure to extract more concessions. Goods must meet strict CUSMA rules of origin and be certified to qualify for exemption. The tariff threat follows US frustrations over Canada’s digital services tax and long-standing disputes about the Canadian dairy industry. While Trump previously called CUSMA a good deal, he now suggests it needs renegotiation. Critics say these tactics are aimed at gaining leverage ahead of upcoming trade talks under the agreement’s six-year review clause.
  
  
• Prime Minister Mark Carney’s cabinet is under new orders to find “ambitious savings” as Ottawa eyes a 7.5% cut to program spending next year. Finance Minister François-Philippe Champagne has asked departments to review whether existing programs are essential, effective, and not overlapping with provincial work. The savings are meant to help fund Carney’s big push to double defence spending and invest heavily in trade corridors, housing, and other priorities without raising taxes. Transport Minister Chrystia Freeland says core social supports like dental care and childcare will not be touched, but attrition could shrink the growing federal workforce, which has jumped 40% since 2015. Champagne also wants each department to outline three top priorities for the fall budget and find ways to pay for them with existing dollars, as the government promises to cap spending growth at 2% through 2028 - 29.
  
  
• The federal NDP will pick Jagmeet Singh’s replacement at a leadership convention in March 2026, setting the stage for a long leadership race as the party tries to rebuild. Singh resigned after losing his seat and overseeing a disappointing result in the April 28th election, leaving the NDP cash-strapped and short on momentum. One NDP MP called the last campaign a “wake-up call,” saying the next leader must focus on rebuilding trust, membership, and fundraising. So far, no candidates have formally entered, but talks are happening behind the scenes as potential contenders weigh their chances. The leadership race will test whether the NDP can reconnect with disillusioned supporters and stand out in a crowded political field.
  
  
• Canada’s job market surprised analysts by adding 83,000 new positions in June, marking the first monthly increase since January despite ongoing trade tensions with the United States. Statistics Canada says most of the gains were in part-time work and among workers aged 25 to 54, with retail, hospitality, and manufacturing seeing strong growth. Experts warn, however, that the looming threat of new US tariffs could still hit trade-exposed sectors hard. While a stronger labour market may help buffer households from higher prices, it also reduces the chance that the Bank of Canada will cut interest rates soon. Some sectors remain under strain - student unemployment climbed to 17.4% for June, the highest level for that group since 2009 outside of the pandemic.
  
  
• The federal government is set to announce how it will compensate auto dealers affected by the sudden suspension of the iZEV electric vehicle rebate program earlier this year. The program, which offered up to $5,000 toward new zero-emission vehicles, ran out of funding in January after nearly $3 billion was spent over five years. The abrupt shutdown left dealers with about $11 million in unreimbursed claims. Tesla alone submitted over $43 million in rebate claims just before the program ended, prompting a federal investigation. The Canadian Automobile Dealers Association is demanding transparency around Tesla’s last-minute claims. Since the program’s pause, EV sales have dropped significantly, falling to just 7.53% of new vehicle sales by April. Automakers say the sales slump continues as consumers delay purchases in anticipation of new incentives. The government has promised to reinstate consumer EV rebates, though details remain pending.

🚨 This Week’s Action Item: 🚨