It’s been a summer of high political drama and economic uncertainty in Canada as Prime Minister Mark Carney faces mounting pressure to navigate a new and fraught relationship with the United States. Just months after a fevered national debate over how to handle President Donald Trump’s aggressive trade tactics, the mood in Ottawa and across the provinces has shifted from outrage to anxious anticipation. Canadians, especially in Alberta’s energy heartland, are waiting to see whether Carney can deliver the bold leadership he promised—or if his government will be defined by hesitation and compromise.
Back in May, Carney and Trump met at the White House for what was widely billed as a pivotal moment in North American diplomacy. According to Calgary Herald, Carney made notable concessions to the Americans, a move that surprised many who expected a more combative approach. Rather than unleashing political artillery against Trump, as some had demanded, Carney appeared to take a more accommodating stance. The once-ubiquitous rallying cry of “Elbows Up”—a call for full-throated retaliation—has faded into something of a punchline, a relic of a political moment that now feels oddly distant.
The change in tone has not gone unnoticed, especially among Carney’s critics. Conservative leader Pierre Poilievre, speaking in Calgary on August 7, 2025, didn’t mince words. "For the last ten years Mark Carney was a net-zero, keep it in the ground green fanatic. He said he wanted to keep at least half our oil in the ground. He’s testified against the Northern Gateway pipeline. He supported all the carbon taxes. He’s publicly spoken in favour of the electric vehicle mandate," Poilievre charged, as reported by Calgary Herald. "He’s tried to present himself as some big change because he looks and sounds different than Justin Trudeau but he has supported all of the same policies."
Poilievre’s frustration is echoed by others in Alberta’s government. Rebecca Schulz, environment minister in Premier Danielle Smith’s cabinet, expressed her impatience with Carney’s lack of action, asking when the prime minister would "dump the nasty laws holding back the Canadian economy" and support moves that could strengthen Alberta’s vital oil and gas sector. For many in the province, the question is not just about trade or tariffs, but about whether Carney will finally take the handcuffs off the oilpatch and deliver tangible economic relief in these trying times.
Meanwhile, the broader Canadian economy is showing signs of strain. Statistics Canada reported a loss of 41,000 jobs in July 2025, with the unemployment rate holding steady at 6.9 percent. As Economic Times highlighted, full-time jobs in the private sector were hardest hit, particularly in the information, culture, and recreation sector. The construction industry also saw losses, while manufacturing—especially in areas affected by U.S. tariffs—managed modest gains for a second consecutive month. Perhaps most troubling, youth employment for those aged 15 to 24 fell sharply, making it a tough summer for young Canadians seeking their first foothold in the workforce.
Economists point out that the stable unemployment rate, despite significant job losses, may suggest that more people are giving up on actively looking for work or are moving between jobs, muddying the headline figures. The layoff rate, for now, remains almost unchanged from last year, indicating that companies are holding steady amid ongoing trade uncertainties and inflationary pressures. Yet, the impact of trade tensions with the United States continues to cast a long shadow over the Canadian economy, complicating any recovery efforts.
Carney, for his part, has not shied away from the gravity of the situation. Speaking to reporters in British Columbia on August 5, 2025, the prime minister was blunt: "While we'll continue to work with the United States on the many mutually beneficial opportunities that we share in trade and investment, it is clear that we cannot count, or fully rely, on what has been our most-valued trading relationship, for our prosperity." As reported by CBC, Carney’s remarks followed his earlier insistence in March that Canada’s "old relationship" with the United States was "over." Such candor from a Canadian leader about the country’s largest trading partner is remarkable—and, increasingly, hard to dispute.
The numbers back up Carney’s caution. The effective overall tariff rate imposed by the United States on imports is now estimated at 18.6 percent, the highest since 1933, with Canada facing a 13.1 percent rate. As Nobel laureate Paul Krugman observed, "You should think of Trump's trade policy as the second coming of the 1930 Smoot-Hawley tariff, effectively reversing the results of 90 years of trade liberalization." For Carney, the message is clear: the era of easy access to the American market is over, and any new deal with Trump is likely to come with strings attached.
Yet, not everyone is convinced by Carney’s approach. Poilievre has accused the prime minister of "bending over backwards" to make concessions to the American president, arguing that the goal should still be "unfettered access to the American market." These criticisms underscore the political risks Carney faces as he tries to balance the demands of domestic stakeholders with the realities of a transformed global trading system.
Some commentators have drawn parallels between the current moment and a similar crossroads in 1972, when Mitchell Sharp, then secretary of state for external affairs, outlined three options for Canada-U.S. relations: maintain the status quo, move toward closer integration, or pursue a comprehensive strategy to strengthen the Canadian economy and reduce vulnerability. While Carney’s approach most closely aligns with the third option—focusing on domestic strength and seeking new opportunities abroad—history shows that such a path is easier said than done. As Asa McKercher, a research chair in Canada-U.S. relations at St. Francis Xavier University, notes, "Where the rubber will hit the road is will there be serious efforts to actually get Canadian companies, particularly small and medium businesses, the business links and actually capitalize on these trade agreements."
Carney himself seems to recognize the challenge. "We're increasingly focused on building our strength at home and finding new opportunities for Canadian companies and workers abroad," he said on August 5. While Canada now boasts several comprehensive free trade agreements beyond the United States, the real test will be whether these deals can be translated into concrete economic gains for businesses and workers.
For now, the mood in Canada is one of cautious watchfulness. The political temperature has cooled since the height of the trade crisis, but the underlying tensions remain. Alberta waits for action, business leaders look for signs of real progress, and young Canadians hope for a more robust job market. Whether Carney can deliver on his promises—or whether he will be remembered as a "paper tiger," as some fear—remains to be seen. But one thing is certain: the days of taking Canada’s relationship with the United States for granted are over, and the path forward will demand both pragmatism and resolve from those at the helm.
