Carney's cabinet retreat brings 'tough' budget decisions, tariff relief and calls for a 'diet' government

TORONTO — “Tough” budget decisions, public service adjustments, incoming aid for sectors hardest hit by U.S. tariffs and the latest on ongoing trade negotiations with President Donald Trump were all on the menu for the federal Liberal cabinet meeting this week.

Prime Minister Mark Carney’s cabinet met on Thursday for the second day of a two-day retreat at a hotel in the Toronto neighbourhood of North York.

Media were permitted to be at the hotel, but ministers and their staff were kept far from reporters’ eyes and ears. The only leaks came from parts of the hotel ceiling during particularly hard rain Thursday morning, rather than from government sources with information to share.

Over the summit, cabinet heard from pollsters on the “mood of the country,” head of investment funds on private-public collaboration, and top energy executives and Scotiabank Chief Economist Jean-François Perreault on the country’s economic outlook.

It also heard from former Australian prime minister and the country’s current ambassador to the U.S. Kevin Rudd on how to best deal with Donald Trump’s administration.

Tough budget decisions and public service ‘adjustments’

The day after Carney said his government’s first budget would be a mix of “austerity and investment,” Finance Minister François-Philippe Champagne admitted that he is looking down the barrel of difficult budgetary choices.

“Will there be tough choices to make? Definitely. Is the nation ready? I would say, yes,” Champagne told reporters. “In our campaign, we said we’re going to spend less so we can invest more. And you know, people understand that.”

When asked where or what his government might cut, Champagne demurred. But he argued that the growth of government spending in recent years under the Liberals was not sustainable and needed to be reined in.

Asked if that meant there would be cuts to the public service, he replied that there would be “adjustments” as part of the 15 per cent cuts imposed on all departments and agencies within three years.

“Adjustments” are bureaucratese for layoffs. According to the government’s website, work force adjustments are “when the services of one or more indeterminate employees will no longer be required beyond a specified date due to a lack of work, the discontinuance of a function, a relocation in which the employee does not wish to participate or an alternative delivery initiative.”

LeBlanc won’t set deadline for new U.S. trade deal

After busting the self-imposed deadline of July 21 and then Aug. 1 for a new trade deal with the U.S., it appears the Carney government is done with dates.

Speaking to reporters on Thursday, Dominic LeBlanc, the minister responsible for Canada-U.S. trade, refused to set a new deadline for the end of negotiations with the Donald Trump administration.

“I like you very much and I understand that you are looking for this kind of detail,” he told reporters, refusing to detail which level of tariffs were being discussed for certain sectors.

“We are working hard to make progress because we understand the importance for workers in all regions of Canada,” he added.

LeBlanc told reporters that Canada’s ambassador to the U.S. Kirsten Hillman was in Washington D.C. this week to work on smaller, sector-specific deals on key tariffed industries like steel, aluminium, softwood lumber and autos.

Joly promises help for sectors hit by tariffs within days

If you’re in a Canadian sector impacted by U.S. tariffs, help is on the way, says Industry Minister Mélanie Joly.

Speaking to reporters on Thursday afternoon, Joly said there would be an announcement in the coming days for industries hit hardest by U.S. President Donald Trump’s tariffs, namely aluminium.

She said the government is evaluating potential major projects as a way to boost local steel, aluminium and lumber industries and offer them some stability in the coming years.

“There is also a difference between large companies and smaller businesses. What we see is that small businesses are also affected by this unpredictability, and so we must be there to help them,” Joly added.

Sources say Carney is expected to make an announcement in Toronto on Friday morning.

Head of controversial U.S. think-tank drops out

The Liberals made waves within progressive circles when they announced that the head of the Heritage Foundation, a controversial right-wing U.S. think-tank with deep connections to top Republicans, would speak to cabinet about how to deal with the Trump administration.

The Heritage Foundation is behind Project 2025, a right-wing policy roadmap that proposes slashing much of the U.S. public service, cracking down on undocumented immigrants and replacing top civil servants with conservative loyalists. Though Trump has denied any connection to the project, his administration has implemented many of its proposals.

Hours before Heritage Foundation President Kevin Roberts was slated to speak to cabinet, the Prime Minister’s Office announced that Roberts’ office said he could no longer attend. The unsigned statement did not provide a reason.

Major public service union upset at austerity

A day after Carney promised an austerity budget, the head of the largest federal public service union finally responded. And she was mad.

“ “Let me be clear: Prime Minister Carney’s austerity agenda is lazy, reckless and short-sighted and puts everyone in Canada at risk,” said Public Service Alliance of Canada (PSAC) President Sharron DeSousa.

“Carney’s government has a choice — it can be forward-looking and a model employer that creates good jobs to strengthen our economy and build a resilient Canada, or it can continue to use old-fashioned, ineffective and lazy approaches like austerity that just don’t work.”

Pierre Poilievre says federal government is a ‘fat man’

Carney can’t cut into the federal government fast enough, Conservative leader Pierre Poilievre told reporters in Toronto Thursday. Poilievre argued that the Liberal government needs to focus on cutting red tape, regulation and “bloated bureaucracy”.

“Right now, the government has become a fat man and the private sector is a skinny man that is carrying that fat man up an increasingly steep hill. And that skinnier man is about to collapse under the weight of the gargantuan Carney Liberal government,” he told reporters.

“It’s time to put that government on a diet.”

National Post cnardi@postmedia.com

• Carney says to expect 'austerity and investment' in upcoming fall budget

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