TORONTO (AP) — Canadian Prime Minister Mark Carney said Tuesday that Canada intends to emerge from its trade war with the United States as a more resilient and independent economy, signaling that Ottawa is prepared to wait for the right conditions rather than rush into a deal with Washington.
“And to our American friends, let me say this. We will always be neighbors,” Carney told hundreds of global investors gathered in Toronto for his Canada Investment Summit. But he said the relationship works when the two countries engage as “true partners that respect each other’s traditions and sovereignty.”
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“When those opportunities return, Canada will be an even better partner — stronger, more resilient, more independent,” he said.
Carney also unveiled a major expansion of business tax breaks that the government says will nearly halve Canada’s effective tax rate on new investment to 6.4%, less than half the U.S. rate, as Canada competes with the United States for global capital.
The expanded “productivity mega deduction” will allow businesses to immediately write off more than 65% of eligible capital investment, up from roughly 15%.
“The incentive for companies to invest in Canada is twice as high as it is in the United States,” Carney said.
Canadian Chamber of Commerce President Candace Laing called the tax change “a launchpad to make Canada globally tax competitive,” saying it was “a moment we’ve been waiting for.”
Carney also announced that Ottawa will seek private investment through long-term concessions to operate Canada’s four largest airports, while retaining public ownership of the land and assets. He said the plan could raise tens of billions of dollars to reinvest in transportation and other infrastructure.
Without naming U.S. President Donald Trump, Carney then took aim at the increasingly transactional and zero-sum approach to international economic relationships that has characterized Trump’s trade policies.
“Our reputation — as a reliable, predictable partner — has rarely been more valuable in a world where transactions are replacing relationships, and zero-sum is favored over win-win,” Carney said.
Carney said economic integration and national sovereignty are increasingly in tension, arguing that countries seeking to preserve their independence need to work more closely with like-minded partners. He heads to Europe later Tuesday, where he is scheduled to address the European Parliament.
Trump has repeatedly used tariffs to pressure trading partners and pressed manufacturers to shift production and investment south of the Canadian border. He has also repeatedly talked about making Canada the 51st U.S. state, comments that have further strained relations between the longtime allies.
But Carney noted that about 80% of the trade with the U.S. remains tariff-free.
“There is a mutually beneficial arrangement that can be had,” Carney said in a fireside chat after his speech. “When it is the right time to strike that deal, we’ll be ready to do that.”
Trade talks between Canada and the United States collapsed last month before Washington imposed 50% tariffs on about $20 billion in Canadian goods, prompting retaliation from Ottawa. The United States has since announced additional restrictions on Canadian products.
Carney suggested Canada cannot build its strategy around a return to the old relationship. “We know that nostalgia is not a strategy,” he said.
Carney also joked about the uneasy state of the U.S.-Canada relationship, contrasting a ceremonial key he once received from his hometown of Fort Smith, Northwest Territories, with a box of gold keys to the White House that Trump later gave him.
Carney said Trump told him that if he brought the key, “They’ll let you in,” before adding: “Maybe they’ll shoot you.”
“And that sort of sums up the relationship,” Carney said. “In Canada, you get the key. In the U.S., they might shoot you.”
