Prime Minister Carney’s Battle Plan: Mitigating Trade War Damage for Canada

Canadian Prime Minister Mark Carney is actively implementing a battle plan to mitigate the economic damage from the ongoing trade war, a move underscored by a new, grim global economic forecast from the Organization for Economic Co-operation and Development (OECD). The OECD has significantly lowered its global economic growth projections, now anticipating a decline from 3.3% in 2024 to 2.9% in both 2025 and 2026.
The OECD’s report highlights that “weakened economic prospects will be felt around the world,” and specifically includes Canada among the nations expected to be major contributors to the global economic decline. This alarming forecast reinforces the urgency of Carney’s election campaign promises to bolster the Canadian economy and diversify trading partners beyond the United States.
Adding to the economic challenges, the OECD warns that “protectionism” will fuel inflation, leading to higher costs for goods and services. This creates a complex environment for Canada, which has already seen interest rate hikes in the past due to inflation. The OECD advises central banks, including the Bank of Canada, to “remain vigilant” on this front.
Carney’s strategy extends to internal reforms, aiming to remove federally regulated interprovincial trade barriers to make it easier for provinces and territories to do business with each other. While a recent meeting with provincial premiers showed a desire for more work, these efforts align with the OECD’s broader recommendation to foster investment and improve public finances to strengthen economies.