In a high-turnout federal Canadian election, which was the first since 1930 that saw two parties each receiving over 40% of the popular vote, Prime Minister Mark Carney’s Liberal Government was re-elected Monday night, just four seats shy of a majority government.
On Tuesday morning, after a late night of celebrations, including rocking out to a Down with Webster concert, the Prime Minister immediately got to work. As he began to sort out his government’s transition to the 45th Parliament, the Prime Minister and President Donald Trump spoke and agreed to an in-person meeting within a week.
In this Canada – Trump Administration 2.0 Update, Alex Steinhouse from the Fasken Government Relations and Political Law team provides insights on what to expect in the coming days.
Standing Up Government
Having already completed a first, quick transition after winning the Liberal leadership back in March before calling the general election, there is an expectation that the Prime Minister will oversee a similarly quicker transition this time around, in order to have his government hit the ground running for this new mandate. The Prime Minister has confirmed that the new Cabinet will be sworn in on May 12th. The 343 Writs of Election will be returned on May 19th. Parliament will return on May 26th with the election of the House of Commons Speaker, followed by a Speech from the Throne to the new Parliament, outlining the Government’s agenda, which will be delivered on May 27th.
Buckingham Palace has now confirmed that King Charles will deliver the Speech from the Throne, as part of a two-day royal visit from May 26th to 27th, accompanied by Queen Camilla. This follows the Prime Minister’s audience with the King of Canada via telephone on Tuesday. The visit will serve as a highly symbolic nod to our sovereignty, instead of the usual oration delivered by the Governor General, and will be the first time since 1977 when Queen Elizabeth II opened the Canadian Parliament.
For those following the Ottawa government machinery, we are also looking for the timing for the formation and membership of Cabinet committees, the staffing of the PMO and Ministerial offices, when and if there will be a Deputy Minister/Ambassador shuffle, and when (and if) Ministerial mandate letters will be published.
In addition to those considerations, the spring stands to be action-packed for the re-elected Government. Prime Minister Carney will host the G7 Summit in Kananaskis, Alberta, from June 15th to 17th, and is expected to attend the NATO Leaders’ Summit at the Hague (June 22nd to 26th).
On the immediate legislative agenda, there will be, potentially, the tabling of fiscal measures (including a promised 1% tax cut for the lowest federal income tax bracket), which could take the form of a fiscal update or a budget. The Liberals have also committed to “unleash” internal free trade by Canada Day by tabling legislation, or including it with the fiscal measures, to eliminate all federal barriers to interprovincial trade and labour mobility and to remove all federal exceptions under the Canadian Free Trade Agreement. At the same time this spring, the House of Commons will elect its Speaker and begin the process of forming Standing Committees.
Setting Up the First PM-President Meeting
There are two very different public readouts of the first post-election conversation between Prime Minister Carney and President Trump. In their initial conversation, the two leaders had already agreed that the two countries would begin negotiations on a new economic and security agreement as soon as the election was done.
The Prime Minister’s readout of the phone call stated: “President Trump congratulated Prime Minister Carney on his recent election. The leaders agreed on the importance of Canada and the United States working together – as independent, sovereign nations – for their mutual betterment. To that end, the leaders agreed to meet in person in the near future.”
However, President Trump, sitting with his Cabinet on Wednesday, was more forthcoming, saying the PM will in fact visit the White House within the next week or less. He went on to say, “I think we're going to have a great relationship,” Trump said. “He called me up yesterday and said, ‘Let's make a deal.’” He went on to say Carney “couldn't have been nicer” and called him “a very nice gentleman.”
The Prime Minister’s office has yet to confirm the date of the visit, but sources suggest the meeting will take place on Tuesday.
In the first post-election published interview, Prime Minister Carney did provide some colour, telling BBC News of his plans for this first meeting. “It will be the same message that I’ve given him directly and I’ve been saying publicly, which is that we’re two sovereign nations, there is a partnership to be had, an economic and security partnership to be had,” he said. “It’s going to be a very different one than we’ve had in the past.”
Mr. Carney went on to say he will tell President Trump Canada is seeking partnerships elsewhere around the world (including the UK), but is willing to work with the US “So we’ll have a partnership on our terms. There’s a win-win possibility there,” he said, “but on our terms, not on their terms.”
In his Friday press conference, Prime Minister Carney said he will be accompanied by senior officials and will be granted significant time for the meetings in the White House where he expects the discussions to be serious. However, he warned not to “expect white smoke at the meeting,” but “probably white smoke elsewhere later.” (The reference to ‘white smoke’ is an allusion to the smoke discharged from a chimney at the Vatican that informs the public that a new Pope has been elected by the College of Cardinals of the Roman Catholic Church). He went on to say it is about reaching a win-win with the US, including on critical minerals, energy, and not dividing the North American market.
However, clear next steps for the negotiations are hard to pin down, as there are many decision points to still consider. As former Prime Minister Trudeau’s point-person on Canada-US relations, Brian Clow, suggests, Team Canada will first need to choose its negotiation team (in terms of Cabinet, Ministerial staff, and diplomatic composition). Then the two parties will need to sort out process: either the scheduled CUSMA review set to start in June 2026, which requires a series of public consultations before it can begin, or a more informal one (a “handshake deal”), or a combination of the two. Finally, both countries will need to decide what is, in fact, on the negotiation table. While Canada’s goal is obvious (stop the tariffs/achieve more certainty going forward that this trade war situation will not reproduce itself), President Trump has mentioned a litany of grievances raised against Canada, and they will need to home in on the “deal breakers.” Stay tuned as these details begin to flesh out.
President Trump, the Auto Tariffs and Mike Waltz
A brief word on the state of the auto tariffs this week. On Tuesday, President Trump changed course yet again by offering temporary relief to the auto industry. “We just wanted to help them endure this little transition, short term ... If they can’t get parts, you know it has to do with a very small percentage, if they can’t get parts we didn’t want to penalize them,” Trump told reporters at the White House.
Rather than applying the 25% tariff set to begin in May on auto parts, automakers that finish their vehicles in the US will get a rebate on imported parts of 15% of a vehicle’s retail price. This will drop to 10% next year.
Moreover, President Trump signed an Executive Order so that companies paying auto tariffs won’t face stacked tariffs – the steel and aluminum tariffs, for instance, will not be stacked on top of the auto parts tariffs.
On Thursday, US Customs and Border Protection released guidance confirming that CUSMA-compliant automobile parts are not targeted by American tariffs.
Even with this most recent clarity, the constant turmoil seems to be weighing on the North American auto sector players.
Meanwhile, President Trump’s National Security Advisor, Mike Waltz, at the heart of Signal-Gate, is set to leave his post. The President has nominated him to be the next United States Ambassador to the United Nations. In the interim, Secretary of State Marco Rubio will serve in the role, while continuing in his current role.
