Carney Faces Packed Summer Agenda Beyond the Barbecue
Prime Minister Mark Carney is gearing up for an exceptionally busy summer, with a convergence of major policy decisions, trade negotiations, and political shifts that will shape Canada’s trajectory well beyond the usual seasonal lull.
While Canadians head to cottages and pools, the federal government will be navigating a looming deadline on Alberta’s pipeline application, an upcoming provincial referendum, critical trade talks involving the Canada-U.S.-Mexico Agreement (CUSMA), and a wave of MP resignations that will trigger multiple by-elections in the months ahead.
Adding urgency to the political calendar, new inflation data suggests the cost of living could become an increasingly potent issue. Canada’s annual inflation rate climbed to 3.2 per cent in May, up from 2.8 per cent in April — the first time since 2023 that the rate has exceeded three per cent. The increase has been attributed to rising gas prices linked to the Iran war, as well as higher costs for fresh fruit and vegetables.
Despite the challenging outlook, a new Postmedia-Leger poll shows the Liberals remain in a strong position with 48 per cent support among decided voters, while the Conservatives hold steady at 34 per cent. At 57 per cent, a majority of Canadians say they are satisfied with the federal government, a three-point increase since the start of June.
Alberta Pipeline Decision Looms Large
Alberta Premier Danielle Smith has pledged to submit an application for a new oil pipeline project to the federal Major Projects Office by July 1 and is reportedly on track to meet that deadline. Once submitted, the Carney government would have until October 1 to approve the project — a date that falls just before Alberta’s referendum on provincial sovereignty.
George Vegh, former chairman of the Canadian Energy Regulator, noted that the decision rests largely with the Prime Minister’s Office. “It’s a very centralized decision, so the Cabinet makes that decision and we all know that in today’s world ‘Cabinet’ means ‘Prime Minister’s Office’,” Vegh said.
It remains unclear whether Alberta will secure a private-sector backer for the pipeline or what route it might take to the British Columbia coast. A Memorandum of Understanding between Canada and Alberta suggests the pipeline would be privately funded and constructed, though the document is not binding. Vegh pointed to the Trans Mountain expansion — ultimately funded by taxpayers — as an example of how public financing can come into play.
The proposed pipeline is expected to face fierce opposition from Indigenous and environmental groups. Anna Johnston, an attorney with West Coast Environmental Law, said during a press conference on Parliament Hill on June 9 that the project “will be so vociferously opposed and there will be so much legal risk associated with it – it will never be built.”
CUSMA Trade Talks Enter Critical Phase
July 1 also marks the deadline for Canada, Mexico, and the United States to decide the future of their trade agreement. The three nations must choose between extending CUSMA for another 16 years, withdrawing from the agreement entirely, or continuing the current deal for 10 years with annual reviews.
Canada and Mexico have both signaled willingness to extend the agreement for 16 years. However, U.S. President Donald Trump has twice in recent weeks suggested his country would be “better without” CUSMA. A Canadian government official pushed back on that characterization, describing recent private discussions with U.S. trade officials as “substantial.”
All three countries are scheduled to hold their first trilateral meeting on July 1. Brian Clow, who served as former Prime Minister Justin Trudeau’s deputy chief of staff, said the Americans are now engaging “in ways they haven’t before” and that the meeting could lead to further negotiations over the summer.
Still, Clow expressed pessimism about reaching a deal. “The main reason I’m pessimistic is that we just don’t see any concession from the Americans,” he said. “The Americans want a whole range of unilateral concessions from Canada, and they are not signaling that they are ready to lower their 232 tariffs.” He added that continuing CUSMA with annual reviews remains the most likely scenario and described the situation as “manageable” compared to worst-case fears when Trump returned to office.
Inflation Concerns Could Reshape Political Debate
Bank of Canada Governor Tiff Macklem said he had seen “no signs of overall inflation” and characterized May’s figures as a reflection of rising global energy prices. He noted that the recent U.S.-Iran peace deal was already helping to bring down oil prices.
However, Andrew Enns, executive vice president at Leger, warned that sustained inflation above three per cent could create significant political headwinds for the government. “If we see inflation above three per cent again in July and the Bank of Canada may have to change interest rates, that puts the government in a very difficult situation,” he said.
Enns suggested that persistent inflation could bolster Conservative Leader Pierre Poilievre’s argument that the Carney government is failing on affordability. “I think many Canadians, even if they don’t like Mr. Poilievre, would agree that things aren’t getting much better, he’s right,” Enns said.
He noted that while Canadians tend to pay less attention to politics during the summer months, the reality of higher prices may hit home when families return from vacation and face back-to-school shopping. “I think it will be very interesting to see how the government deals with some of these big files and whether Canadians still feel good about it,” Enns said.
Wave of MP Resignations to Trigger Multiple By-Elections
The House of Commons will be down six MPs by autumn — three from the government side and three from opposition benches — setting the stage for a series of closely watched by-elections.
Former Liberal minister Jonathan Wilkinson, who will become Canada’s ambassador to the European Union, and former Bloc Québécois MP Simon-Pierre Savard-Tremblay, who plans to run for a Parti Québécois provincial seat, both resigned on June 19. Liberal MPs Steven Guilbeault and Nathaniel Erskine-Smith, NDP MP Alexandre Boulerice, and Conservative MP Cathay Wagantall are all expected to step down later this summer.
The ruling Liberals have six months to call by-elections for the vacant seats. Among those reportedly considering runs are Braeden Caley, Mark Carney’s deputy chief of staff, who is said to be eyeing Wilkinson’s North Vancouver-Capilano riding, and Claire Seaborn, a former Wilkinson aide, who is interested in the Toronto riding of Beaches-East York.
The Bloc Québécois, still recovering from a defeat in a spring Quebec by-election, has already named Alexandre Curzi, a senior executive in the province’s cultural sector, as its candidate in Boulerice’s Montreal riding of Rosemont-La Petite-Patrie.
Enns said he does not expect the by-elections to significantly alter the overall seat count, though he flagged the Rosemont race as one to watch. “I think this is the film that perhaps has the most potential to be interesting,” he said, suggesting the seat could shift to the Liberals if their strength in Quebec continues in the coming months.
However, the by-elections are unlikely to be called until after the Quebec provincial election and the Alberta referendum in October, meaning voters may not head to the polls until November or December.
