Canadian Prime Minister Mark Carney had a nickname when he was the governor of the Bank of England: The unreliable boyfriend.
It was because he sent mixed signals about what he was going to do next, then didn’t deliver. We’re starting to see the same thing in his role as Prime Minister.
This month’s budget was billed as an all-timer. Carney said it would be transformational, giving speech anfter speech, talking about generational investments, big sacrifices, he talked about how the former US-Canada relationship was ‘over’ and ‘ruptured’ along with aims to double non-US exports.
“Our economic strategy needs to change,” he said.
Then the November 4 budget came and it was severely lacking in almost anything substantive. Yes, there was some defense spending, lower immigration levels, and infrastructure talk but it was hardly stimulative and certainly not for 2026.
Looking ahead, I’m just not seeing shovels in the ground next year in Canada and that’s a problem for the Canadian dollar, which had built in some level of stimulus.
There was hope for something transformational. Carney campaigned on a slogan of ‘It’s Time to Build’ but there has so far been next to nothing to make that happen.
In another example of the unreliable boyfriend, the government hyped up something called the ‘major projects office’. The hype was that it would kickstart nation-building projects and other great things. Instead, the first round was a rubber stamp on projects that were already under construction. The second phase — released today — is more of the same. The whole thing looks like a government trying to take credit for things.
Yes, it might help things move along a bit smoother but the expectation was for so much more.
Finally, there were repeated leaks from Ottawa that a trade deal with the US was close and here we are, months later, with nothing and uncertainty high heading into the review of USMCA in mid-2026. The unreliable boyfriend strikes again.
The Carney government is starting to look like an empty suit. The style has been inspiring, impressive and an incredible electoral victory but the substance is absent.
Now maybe that comes down the line — the $76 billion deficit will surely be spent on something — but in terms of investing, the Canadian dollar had built in some higher expectations for 2026 that aren’t coming. Now maybe the price of oil turns around or Canadian consumer continue to surprise with high spending but all else equal, the Canadian dollar gains of 2025 are looking flimsy.
USD/CAD back to 1.45?
This article was written by Adam Button at investinglive.com.
