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Under attack from opposition Conservatives for dropping听tens of billions of dollars鈥� worth of late last month, Carney argued he is achieving results in his engagement with Trump. Canada, he insisted, has one of the best trade situations with the tariff-happy U.S., in light of how exports to the country remain exempt from duties under 2018鈥檚 North American trade deal with the U.S. and Mexico.

But Carney also said the steep American tariffs on Canadian steel, aluminum, autos and more will likely stay in place at least in the near term, as talks continue with Canadian officials in Washington, where top bureaucrat Michael Sabia and others have been negotiating with the Trump administration.

鈥淒on’t expect immediate white smoke on one of these strategic sectors, but that’s the type of conversation that we’re having, and we’ll continue to have as well,鈥� Carney told reporters Wednesday.

A spokesperson from the Prime Minister’s Office said Carney has previously mentioned he would engage with Trump unofficially as trade talks drag on, and that there is “constant engagement” between Carney’s office and Trump’s “at all levels.”听

Carney addressed the media as several cabinet ministers sat or milled about the lobby restaurant of a North York hotel, where the Liberal cabinet is meeting for two days this week ahead of the fall session of Parliament. On the agenda are discussions about the trade war, as well as Liberal plans to table a crime bill amid an outcry from some political leaders听鈥� including Premier Doug Ford, who has praised Carney’s leadership听鈥� who blame lax bail laws for fuelling recent criminal activity.听

The cabinet is also expected to discuss the housing crisis, with plans to advance a new agency to quickly build affordable housing. Having named Dawn Farrell, a former energy sector executive, as head of its new Major Projects Office, the cabinet will also look toward naming the first development proposals that will get fast tracked under the government’s controversial law that allows Ottawa to skirt regulations to fast-track approvals of “nation-building” projects.听

On top of that there is the Carney government’s first budget, which is expected to land in Parliament in the coming weeks. It comes as the government looks for ways to find savings equal to about 15 per cent of spending across almost all departments and agencies over the next three years. Sources, speaking confidentially to discuss internal deliberations, told the Star earlier this summer that this would amount to annual reductions of about $25 billion by the 2028-29 fiscal year, prompting concerns from public service unions about layoffs and warnings that the savings will require federal program cuts. The target is also almost double the $13 billion in spending “savings” within three years that the Liberals promised to find during the spring federal election campaign.听

On Wednesday, Carney told reporters the coming budget will focus on reducing “day-to-day” spending in the federal government, while also finding ways to use government money to invest in projects that spur the economy. The Canadian economy shrank in the second quarter of this year, with gross domestic product (GDP) dropping by 1.6 per cent on an annualized basis, with exports falling amid the ongoing trade war, Statistics Canada reported.听

In French, Carney said it will be an “austerity budget” that is also “an investment-focused budget.” He added that federal spending since 2015听鈥� when his predecessor Justin Trudeau took office as prime minister听鈥� has grown twice as fast as the overall economy.

“It’s not a sustainable situation, so we need to rein in spending,” Carney said.听

Later Wednesday, pollster Jean-Marc L茅ger spoke to reporters after he and his colleague S茅bastien Dallaire听presented public opinion research from his firm L茅ger Marketing to Carney’s cabinet. They said cabinet ministers were surprised to hear that fear of trade tariffs has fallen down the priority list for many voters since April’s election. Rising to the top of public concerns are affordability and inflation, they said, suggesting many voters see trade tariffs as a baked-in reality and therefore the government should focus on economic growth and addressing the cost of living.听

“They want to stop fighting on tariffs,” L茅ger said. “Just take care of Canadians’ wallets.”听

During the two-day meeting, the cabinet will also hear from housing and economic experts, as well as Kevin Rudd, Australia’s ambassador to Washington, who will discuss Canada’s efforts to strike a new commercial and security relationship with the U.S.

The cabinet is also slated to hear from Kevin Roberts, the president of the U.S.-based Heritage Foundation, which authored the controversial Project 2025 report published ahead of Trump’s re-election on how to advance conservative causes and expand presidential power.

Carney’s government has pledged to increase federal spending on the military, with more than $9 billion devoted to defence in the current fiscal year, and a new pledge with the North Atlantic Treaty Organization to spend the equivalent of five per cent of Canada’s GDP on defence and “defence-related” infrastructure initiatives by 2035.听

With a current defence spend of $62.7 billion for 2025-26, the pledge would add tens of billions of dollars in additional funding to defence and the Canadian Armed Forces, depending on how much GDP changes over the next decade.

The cabinet meeting is scheduled to conclude Thursday evening.听

With files from Ryan Tumilty