Can Canada attract investment and build new markets faster than the trade war damages industries that still depend on the United States?

North of Polite | September 15, 2026

Canada is attempting something extraordinarily difficult.

Not to stop trading with the United States. Not to replace it.

But to make losing access to parts of the American market less dangerous.

And Canada is trying to do it while the damage is already happening.

THE DAMAGE IS REAL

Most Canada–U.S. trade remains tariff-free under CUSMA. But industries caught by American tariffs are taking real damage.

The Bank of Canada estimates sectors affected by specific tariffs account for roughly 15% of Canadian exports.

Canadian steel exports fell by roughly half following U.S. tariffs. Softwood lumber exports were about 20% below 2024 averages earlier this year.

Automotive manufacturing remains particularly vulnerable because it was built around an integrated North American supply chain.

That’s the danger with auto manufacturing: the damage isn’t always a plant closing tomorrow.

It can be the next vehicle being assigned to an American factory instead of a Canadian one.

CANADA’S ANSWER IS TAKING SHAPE

Mark Carney’s strategy is becoming clearer:

Build at home. Attract capital. Develop resources. Find new markets. Reduce Canada’s vulnerability to Washington.

Ottawa has now announced a permanent “productivity mega deduction” allowing businesses to immediately write off most new capital investments.

The government says it would reduce Canada’s marginal effective tax rate on new business investment from roughly 13% to 6.4%, at an estimated federal cost of about C$36 billion over five years.

Meanwhile, Canadian financial institutions have announced enormous financing and investment initiatives:

TD: C$150 billion.

Scotiabank: more than C$100 billion.

BMO: up to C$70 billion.

Sun Life: C$5 billion.

Power Corporation: C$10 billion.

These programs aren’t identical, and that money has not simply been invested in Canada.

Some is lending. Some is underwriting. Some is direct investment. Much of it stretches across several years.

But one thing is becoming apparent:

Canada doesn’t appear to have a shortage of available capital.

The challenge is turning it into productive assets.

THE PROJECTS ARE APPEARING TOO

Bell is already constructing the first phase of a major Saskatchewan AI data-centre complex and is considering an expansion that could eventually involve more than C$50 billion.

The proposed C$30-billion Ksi Lisims LNG project in British Columbia is lining up customers outside North America.

Canada is also pitching more than 160 projects involving energy, mining, infrastructure and advanced manufacturing to international investors while pursuing deeper economic relationships with Europe and other markets.

But an announcement isn’t a factory.

An MOU isn’t a final investment decision.

And available financing isn’t construction.

Canada still has to build.

AND THAT’S THE PROBLEM

Building an economy takes much longer than damaging one.

A steel mill losing American customers today can’t wait six years for new export infrastructure.

An auto worker facing a layoff can’t wait for a mine opening in 2032.

Roughly 72% of Canadian merchandise exports went to the United States in 2025.

Europe can’t simply replace that market.

Neither can Asia.

Canada’s pipelines, railways, highways and supply chains have developed around the United States over generations.

Changing that takes time.

POILIEVRE’S ARGUMENT MATTERS HERE

Pierre Poilievre argues that Canada’s problem isn’t simply attracting money.

It’s getting things built.

The Conservatives propose six-month federal permitting decisions, less duplication with provincial reviews, faster resource development and lower taxes on investment.

The Conservative claim that 500 projects are currently awaiting federal permits still requires better independent documentation.

But the broader criticism is legitimate.

Canada has struggled with weak productivity, investment and lengthy project development.

And if diversification requires infrastructure, Canada cannot diversify faster than Canada can build.

Interestingly, Carney and Poilievre are increasingly diagnosing parts of the same problem.

Poilievre wants lower barriers to investment.

Carney just announced a major investment-tax deduction.

Poilievre wants faster approvals.

Carney has begun changing assessment processes and accelerating tax rulings for billion-dollar investments.

Poilievre wants more resource development.

Carney is pitching Canadian energy and critical minerals internationally.

The disagreement increasingly isn’t about whether Canada needs to build.

It’s about how—and how fast.

DIVERSIFICATION HAS ALREADY STARTED

Not every adjustment requires a megaproject.

Canadian businesses are already changing supply chains and finding alternative markets.

Grocers have increased sourcing from Canada and countries outside the United States.

Some metals producers have redirected exports or changed product mixes in response to American tariffs.

The Bank of Canada says the decline in exports from tariff-affected sectors has been smaller than initially expected partly because companies adapted.

That’s encouraging.

But it isn’t victory.

AMERICA ISN’T BEING REPLACED

There is no realistic scenario in which Europe or Asia simply replaces the United States anytime soon.

Nor should that be Canada’s objective.

Diversification means something much simpler:

Make America less capable of hurting Canada by closing individual doors.

If 72% of exports eventually becomes 60%, Canada still has an enormous American trading relationship—but considerably more room to manoeuvre.

If Canadian energy, minerals and manufactured products have multiple customers, Washington has less leverage.

The goal isn’t independence from America.

It’s resilience.

NORTH OF POLITE VERDICT

Carney’s strategy is increasingly clear:

Absorb the pressure. Build at home. Attract capital. Diversify abroad. Negotiate when the terms make sense.

Poilievre’s challenge is equally clear:

Canada may not have enough time to wait. Remove barriers, approve projects faster and make Canada more competitive now.

Both arguments contain something Canada needs.

Diversification without speed could arrive too late.

Speed without diversification could simply rebuild the same dependence that made Canada vulnerable in the first place.

The question, then, isn’t whether Canada should choose one strategy.

It’s whether Canada can do both quickly enough.

The United States still buys most of what Canada sells.

Canada’s job isn’t to end that relationship.

It’s to make dependence on it less dangerous every year.

And the clock is already running.

© 2026 North of Polite. Original reporting, analysis and commentary. All rights reserved. 🍁

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