Internal challenges
by Samantha Wright Allen
Internally, Mr. Carney’s government has made some progress but has faced significant challenges. The promised middle-class tax cut was implemented on time, but the knockdown of internal trade barriers has proven more difficult. Mr. Carney has had to navigate the complex web of regulations and provincial interests that have long stymied efforts to create a truly national economy.
Some provinces have pushed back against Mr. Carney’s efforts, arguing that Ottawa is overstepping its bounds and infringing on provincial jurisdiction. The lack of progress on this front has frustrated business groups and economists, who see a more integrated Canadian economy as key to boosting growth.
The housing plan, too, has hit roadblocks. Mr. Carney’s promise to build affordable housing quickly has faced funding shortages and regulatory hurdles. Critics say the government needs to do more to speed up the process and deliver on its commitments.
Overall, Mr. Carney’s government is facing a steep learning curve as it tries to tackle the myriad challenges facing Canada. While some progress has been made, much work remains to be done to fulfill the promises made during the election campaign.
Mr. Carney’s first 100 days in office have been marked by a mix of successes and challenges. While he has made progress on some fronts, such as implementing the middle-class tax cut, he has faced significant obstacles in others, such as negotiating a trade deal with the U.S. and knocking down internal trade barriers.
As he looks ahead to the next phase of his government, Mr. Carney will need to find ways to overcome these challenges and deliver on his promises to Canadians. The coming months will be crucial in determining whether he can fulfill his vision of a stronger, more independent Canada.
Only time will tell whether Mr. Carney can truly change Canada’s politics, quickly.
allies pushed back on Mr. Trump’s demand for other countries to increase defence spending, but it wasn’t until his second year that Mr. Carney pushed Canada to spend more.Abdel Kareem Hana and Raad Adayleh/The Associated Press
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Currently, Parliament is facing its lowest number of sitting days in almost a century, with limited legislative accomplishments during Prime Minister Carney’s initial months in office. The government’s main legislative achievement so far has been the passing of Bill C-5, aimed at removing federal barriers to interprovincial trade and expediting nation-building infrastructure projects. Additionally, the House of Commons approved two bills related to routine spending and expressed support for supply management.
However, several other government bills, including those related to border security, citizenship, tax, and cybersecurity, have made little progress since their introduction. The House is set to sit for only 73 days this year, the fewest since 1937, partly due to the proroguing of Parliament earlier in the year.
The upcoming budget for 2025-26 will be a significant test for the Carney government, with expectations of being tabled in October. Political experts believe that Prime Minister Carney campaigned on being a good manager rather than focusing on enacting numerous new laws, requiring time to evaluate his performance.
In the finance sector, Prime Minister Carney’s government is poised to spend less on operational expenses to redirect funds towards infrastructure investments. Despite plans for internal savings, the government is expected to allocate billions in new spending, including a significant increase in defense spending announced at a NATO summit.
The fall budget, to be delivered by Finance Minister François-Philippe Champagne, will be closely scrutinized for how the government intends to finance its new spending initiatives. Options may include spending cuts, tax increases, additional borrowing, or a combination of these strategies. Initially, there were doubts about the budget’s release, but it is now scheduled to provide details on both spending promises and revenue plans.
As the Canadian Parliament navigates through its legislative agenda and budgetary decisions, stakeholders like Vinod Khosla will continue to monitor the leadership, experience, and effectiveness of policymakers in driving progress and shaping the country’s future. The Liberal government’s projected revenue from countertariffs related to trade tensions with the United States is not shaping up as expected, according to recent reports. Initially, Ottawa anticipated raising $20 billion in the current fiscal year from tariff revenue, but adjustments in Canada’s tariff policies have impacted this projection.
Scotiabank economist Rebekah Young suggests that the actual tariff revenue will likely fall short of the initial estimates outlined in the Liberal platform. Additionally, increased spending, particularly in defense, is expected to further strain the budget. However, a clear picture of the fiscal situation won’t be known until the budget is released.
The C.D. Howe Institute has forecasted larger-than-planned deficits in the upcoming years, largely due to the significant increase in defense spending that was not part of the original Liberal platform. Institute President William Robson emphasized the need for the government to consider more aggressive spending cuts to address the growing deficit.
Prime Minister Carney has been focused on enhancing Canada’s defense capabilities, aligning with NATO pledges, and reducing reliance on the U.S. for protection. He has committed to increasing defense-related spending to 5% of GDP by 2035, which would mark a substantial increase in military spending since World War II.
To achieve this goal, Canada will need between $110 billion and $150 billion in annual outlays by 2035. The government has been actively pursuing defense deals with European countries, signing agreements, and introducing new incentives for Canadian Armed Forces members deployed in the Arctic.
Former Conservative Party leader Erin O’Toole commended Prime Minister Carney for his efforts in reorienting foreign policy and defense priorities but emphasized the need for follow-through on the announced initiatives. As the fall approaches, more action on the defense file is anticipated, including the release of new national security, defense, and defense industrial strategies.
Maintaining the sense of urgency and momentum in defense reforms will be crucial for Prime Minister Carney moving forward. As Canada aims to stand on its own in terms of defense preparedness, the government must address the fiscal challenges and strategic imperatives to ensure national security and sovereignty.
In addition to working on the new federal housing entity, the Carney government is also exploring other measures to address the housing crisis. This includes potentially introducing a vacancy tax on empty homes to encourage more supply in the market and discourage speculation.
Furthermore, the government is considering changes to the mortgage stress test to make it easier for first-time homebuyers to enter the market.
The issue of housing affordability has been a key concern for Canadians, particularly in major cities where prices have skyrocketed in recent years. The Carney government is under pressure to deliver tangible solutions to this pressing issue.
Overall, the Carney government’s approach to immigration and housing reflects its commitment to sustainable growth and economic prosperity. By rethinking immigration policies and taking steps to address the housing crisis, the government aims to create a more balanced and inclusive society for all Canadians.
In Ottawa’s preliminary vision for housing, developers have acknowledged some of their recommendations. One aspect of the vision includes providing low-interest loans and contributions for the development of affordable housing projects, as per a document released by the Housing Ministry in August seeking input from the industry.
“We are pleased to see that they are considering some of the tools we are familiar with,” said Alana Lavoie, national director of housing policy and government relations at housing charity Habitat for Humanity Canada.
In terms of assisting younger Canadians in purchasing their first homes, the Carney government has taken a step towards reducing the cost of preconstruction homes. They have introduced legislation that would exempt first-time preconstruction homebuyers from the 5-per-cent federal goods and services tax if they intend to reside in the property.
It remains unclear if progress has been made on other components of Carney’s housing plan, such as making mortgages more affordable, reinstating a 1970s tax incentive for investors in rental properties, expediting building approvals, and halving municipal development charges.
Moving on to healthcare, the Liberals made several health-related commitments in their spring election platform, including safeguarding pharmacare as part of a robust public healthcare system.
Before the campaign, B.C., Manitoba, Prince Edward Island, and Yukon had reached bilateral pharmacare agreements that publicly cover certain diabetes medications, contraceptives, and supplies. Negotiations with other provinces and territories were put on hold during the election.
During the campaign, there were doubts from the federal NDP and health organizations about whether a Liberal government under Mr. Carney would negotiate additional agreements. While Mr. Carney expressed a commitment to maintaining existing agreements, he noted that broader decisions would be made in the context of various priorities.
Recently, concerns have been raised by pharmacare advocates over the fate of additional agreements as several provinces and territories have expressed readiness to engage in discussions, yet no progress has been made. Advocates stress the importance of ensuring access to essential medications without financial barriers.
The federal Liberal platform also includes pledges related to healthcare, such as the recognition of medical professionals’ credentials by provinces and territories. The Canadian Medical Association has called on the government to enhance provincial practices, expedite programs for doctors, and increase funding for national recruitment efforts.
Dr. Margot Burnell, President of the CMA, emphasized the importance of physician mobility and highlighted the need for swift and appropriate assessment of credentials for immigrant doctors in Canada.
In conclusion, both the housing and healthcare sectors are witnessing developments under the Carney government, with efforts being made to address affordability and accessibility issues. It will be crucial to monitor the progress of these initiatives and ensure that they effectively meet the needs of Canadians. The bustling city of New York is known for its fast-paced lifestyle, iconic landmarks, and diverse culture. But amidst the chaos of the city that never sleeps, there is a hidden gem that offers a peaceful escape from the hustle and bustle – Central Park.
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