Canada News Roundup: Oil Pipelines, NATO Spending and Caution re Retaliatory Tariffs
June 9, 2025
🪖 Canada to Hit NATO Defence Spending Target Early
Prime Minister Mark Carney has announced that Canada will meet NATO’s 2% of GDP defence spending target years ahead of schedule. For decades, Canada has fallen short of the agreed benchmark, facing repeated criticism from its allies—especially the United States. The new plan promises billions in extra funding for ships, planes, cyber defence, and military personnel. Ottawa says this will revitalize the Canadian Forces and strengthen our role within NATO. The move arrives at a time of rising geopolitical tension and growing demands on Western alliances.
Our Take: The motive for this move is likely multifaceted. First, there's Carney's desire to continue buddying up with other NATO allies, and to reduce reliance on US defense and support. Indeed, Carney explicitly addressed this motive in Toronto yesterday, stating that the U.S.'s global dominance was "a thing of the past". That said, this could also be interpreted as somewhat of an olive branch towards Trump, who has consistently criticized Canada for its reduced military spend. Third, and quite separately, this also appears to fit into Carney's new spend-it-all strategy: adding more defense spending can further stimulate the economy (and use up our steel) - but, of course, this is only the case if Canadian contractors are kept in the loop. Finally, there's the intriguing possibility that this is actually about increasing our military arsenal in the face of a seemingly less-friendly world. It's hard to envision Canada's military becoming strong enough to be a true force within the next several decades; but perhaps this is the first of several moves to push our military in that direction. Interesting times...
⏸️ Carney Hits Pause on Retaliatory Tariffs
Prime Minister Mark Carney has announced that Ottawa will “take some time” before deciding whether to impose new countermeasures to Trump’s doubling of tariffs on steel and aluminum. Rather than rushing out a response, Carney has directed his cabinet to consult with industry leaders and economic advisors before committing to any specific course of action. This is a notable shift from his much more aggressive stance during the Prime Ministerial campaign.
The move has sparked debate about whether Canada is showing caution or simply exposing its own vulnerability on the world stage. Some observers see this as a sign of restraint and strategic patience, especially given the current volatility of the global economy. Others worry that hesitation could embolden trading partners to push Canada around. Either way, the decision stands in stark contrast to the tit-for-tat approach of past trade disputes.
Our Take: Carney’s change in tone is hard to miss. He promised swift, aggressive action while campaigning, but now he’s clearly opting for patience. It’s possible that this shift is the difference between campaigning and governing—bold promises on the stump rarely survive first contact with real-world complexity. There’s still a legitimate argument for caution: with economic uncertainty high, measured steps may be wiser than headline-grabbing moves. But the political risk is real, too—some will see this as hedging or even backpedaling. For now, Carney is betting that careful deliberation will serve Canada better than reflexive retaliation. Whether that’s a sign of wisdom or vulnerability is a question only time will answer.
🛢️ Lions and Tigers and Oil Pipelines, Oh My!
Mark Carney has made his position clear: the only way out of Canada’s economic doldrums is to ramp up spending across the board. Major projects are now on the table, including the possible construction of new oil pipelines—an idea that would have been politically radioactive not so long ago. Supporters argue this will drive growth, create jobs, and boost Canada’s GDP at a time when the country badly needs a win.
That said, new pipelines run directly counter to Carney’s long-standing commitments to environmental protection and climate action. In the rush to spur economic recovery, Ottawa may be signaling a willingness to compromise on the green agenda. For some, it’s a pragmatic pivot; for others, it’s a betrayal of core values.
Our Take: Pushing ahead with new pipelines probably is the right move for Canada’s economy, but only if it’s done with real caution. Environmental impacts must be considered seriously, and any plan will need to put Indigenous rights and protections at the forefront—these aren’t just legal hurdles but fundamental obligations. The political minefield is significant: Alberta is openly threatening separation if pipeline expansion stalls, while Quebec and BC are both likely to resist projects that cross their territory. Still, there’s a blunt reality at play—Canada has to find a way to sell its oil to someone other than the United States. And if that’s the goal, new pipelines are probably a realistic necessity—there's just no other way to sell to the rest of the world.
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