TORONTO — Canada is making progress on "small" tariff deals with the U.S. for key sectors, Prime Minister Mark Carney said Wednesday after revealing he'd had a recent phone call with U.S. President Donald Trump.
Carney disclosed the call during a scrum with reporters outside a cabinet retreat in Toronto. He said he spoke with Trump "at length" Monday evening on a wide range of issues, including trade, geopolitics and employment.
He described it as a "good conversation" but also warned there is no guarantee Ottawa will secure any of the deals under discussion as the Trump administration works to squeeze the Canadian economy to obtain trade concessions.
"Don't expect immediate white smoke on one of these strategic sectors, but that's the kind of conversation that we're having," Carney said.
The Vatican sends a plume of white smoke up from the chimney of the Sistine Chapel to signal that a new Pope has been chosen.
While Carney did not specify which key sectors are the subjects of trade talks, the sectors targeted by U.S. tariffs include steel, aluminum, forestry products and automobiles.
The Prime Minister's Office did not provide a readout of the phone call — or even disclose on Monday or Tuesday that the two leaders had spoken at all, which is the standard practice. The PMO sent a statement to media after Carney spoke Wednesday that said the two leaders are in "close and frequent communication."
Carney said Canada has a team of senior bureaucrats in Washington — including the head of the public service, Michael Sabia — who are speaking with their U.S counterparts on key trade issues.
Carney's cabinet met behind closed doors Wednesday at a Toronto hotel — part of its preparations for the upcoming fall sitting of Parliament and for further negotiations with the Americans on tariffs.
The upcoming review of Canada's free trade pact with the U.S. and Mexico is also on the agenda for the cabinet retreat, which will run through the end of Thursday.
"We need to lay the groundwork for that review," Carney said.
The prime minister and his team will also discuss the upcoming fall budget during their meetings. The budget is normally released in the spring but Carney has delayed it until October.
Carney described the budget as "both" a spending document and a plan for fiscal belt-tightening. He said the federal government has been growing its overall spending at a rate of over 7 per cent a year on average for more than a decade.
"That's twice the rate of growth of the economy, on average. It's not a sustainable situation. So we need to rein in spending. We need to find efficiencies," Carney said, adding that will be one of the key discussions for his cabinet over the next two days.
"The government needs to spend precious taxpayer dollars as carefully as possible. So, big focus on reducing our operational spending — think of it as our day-to-day spending — while at the same time, catalyzing enormous investment in those big projects and building homes."
Conservative Leader Pierre Poilievre said Carney might have promised to spend less, but the prime minister has ramped up government spending since taking office.
"So far, Mark Carney has not found a single penny in new savings," Poilievre told a news conference in Mississauga, Ont. on Wednesday morning, before Carney made his comments.
Since taking office, Carney has unveiled major spending plans for national defence to help Canada meet the NATO defence spending benchmark of the equivalent of 2 per cent of GDP per year.
Poilievre said that Carney will produce larger deficits than those of former prime minister Justin Trudeau.
"It doesn't matter what he says. It matters what he does," the Conservative leader said.
Carney's cabinet will also hear from panels of speakers from outside government during the retreat.
Pollster Jean-Marc Léger will go over the mood of the country, while Scotiabank's chief economist Jean-Francois Perreault will describe the economic outlook.
On the Canada-U.S. relationship, ministers will hear from Kevin Roberts, head of the Heritage Foundation, a right-leaning U.S.-based think tank. They will also hear from Kevin Rudd, Australia's former prime minister and current ambassador to the U.S.
Cabinet will also hear from representatives of pension fund OMERS, MDA Space and Hydro One.
The cabinet's fall legislative planning session includes Sen. Pierre Moreau, parliamentary secretaries Kody Blois and Rachel Bendayan and Liberal caucus chair James Maloney.
— With files from Emilie Bergeron
This report by The Canadian Press was first published Sept. 3, 2025
Kyle Duggan, The Canadian Press
