The Notebook by Theo Argitis: Reading the signals in Carney’s cabinet picks

In this edition, we look at what Mark Carney’s cabinet picks may reveal about his governing instincts, especially on the economic front. We also take stock of the latest developments on the Canada–U.S. trade file, and what the labour market is telling us about how economic uncertainty is starting to bite.

Mark Carney will begin laying down key markers this week for how he plans to govern, with his cabinet announcement set for Tuesday and possible senior staff appointments expected in the days that follow.

I’ll be watching the economic portfolios closely to assess whether we’ll see a real pivot in policy toward centrist, pragmatic reform.

There are serious contenders who fit the mold of substantive, moderate-leaning ministers capable of managing economic change: Steven MacKinnon, Kody Blois, Anita Anand, François-Philippe Champagne, and even Chrystia Freeland—who, absent immediate leadership ambitions, could re-emerge as a more moderate figure.

Among new MPs, names like Tim Hodgson, a former Goldman Sachs executive and Bank of Canada aide to Carney, Carlos Leitao, the ex-Quebec finance minister, and Claude Guay, former IBM Canada president, are also in play.

And the list of critical economic portfolios is long: finance, industry/innovation, transport, trade, natural resources, environment, treasury board, housing, immigration, and intergovernmental affairs. So there is plenty of important work to go around.

Guessing cabinet appointments is always a mug’s game, but a helpful exercise in drawing attention to core issues. I suspect Carney’s instinct for all key departments will be to flood the zone with change and demand results. Accountability will be enforced. The cabinet table won’t be a delicate space for the faint-hearted.

He’ll rely heavily on an inner circle of ministers he sees as competent, aligned, and loyal.

A few observations

One early complication: Carney has pledged a gender-balanced cabinet, but most of his high-profile recruits—particularly those with economic or executive pedigrees—are men. That limits his flexibility.

Another point: his minority status may make it harder to bring in a high-powered chief of staff and other personnel from the private sector. His campaign team leaned heavily on Trudeau-era veterans. His staffing pool may not include many names from his own professional network.

A third observation: while it’s not unprecedented for finance ministers and prime ministers to be from the same province, it’s avoided for regional representation purposes. Carney ran in Ontario. Which means there’s a good chance the next finance minister will be from Quebec. And it’s not a place for political rookies, which may narrow down the field quite a bit.

The finance minister question

I spoke with Robert Asselin, who is policy VP at the Business Council of Canada and a former aide to former finance minister Bill Morneau, about what makes a strong finance minister in today’s context. His four key criteria:

• Commanding authority within cabinet.

• A deep understanding of Canada’s productivity challenge.

• Fiscally hawkish—at least someone who can draw a line between productive investment and overspending.

• Real connections with the business community.

All first-order suggestions.

Let me add a few more.

Carney won’t just be prime minister—he’ll effectively be his own finance minister. (And I suspect his own foreign affairs minister as well.) He enters office with more economic credibility than any PM in modern history and will set the direction on key files. But he’s politically untested and vulnerable.

What he needs is someone who can interpret Ottawa for him. Someone who can say “No” to other ministers, build caucus consensus, manage stakeholder tensions, and translate policy ambition into political reality. It’s a narrow list.

And given the warnings we’re beginning to get from at least one sovereign debt credit rating agency—Fitch Ratings—the ability to communicate effectively with global markets could be as important, especially at a time when the base of investors holding our debt is not exactly the most stable.

Not dead yet

Another big decision for Carney is who he’ll trust to manage the U.S. file.

The Canada-U.S. commercial relationship remains the biggest risk to our economy and the top concern for policymakers and the public alike—a point underscored by Carney’s visit to Washington this week to meet with President Donald Trump.

Much of the coverage focused on the optics of the Oval Office press conference. By all accounts, the encounter was as friendly as could reasonably be hoped. As Bloomberg’s Josh Wingrove put it, things could have gone far worse, given the stakes and the limited control any foreign leader has inside the “lion’s den.”

There were many takes on the meeting, mostly positive for Carney. Commentary ranged from suggestions that the bilateral relationship is returning to normal to more skeptical takes about hardening divisions between the two countries.

But to me, the evidence points to the trading relationship looking like it may survive both Trump’s continued jabs about our statehood as well as Carney’s anti-Trump rhetoric during the election campaign.

The language coming out of Washington is at least somewhat encouraging. Trump said the USMCA—the North American trade pact signed during his first term—is not dead and remains in force, so long as countries abide by its terms. He described it as a transitional step, not an obsolete one.

Notably, he recently lifted tariffs on Canadian auto parts that comply with USMCA rules, which is a real, concrete sign of de-escalation. Carney, for his part, struck a pragmatic tone. He called this week’s talks “the end of the beginning” in what he framed as a longer process to redefine the Canada–U.S. economic partnership.

Even if Carney fails to remove the existing tariffs, most of our trade remains unaffected. That doesn’t minimize the pain in key sectors like steel and aluminum, which are under real strain. But at the macro level, Canada is largely spared, relatively speaking. This could change, of course. But for now, it’s hard to argue we’re in an economic disaster.

In a new report this week, RBC estimated that under current tariffs, 86 percent of Canadian exports should ultimately qualify for duty-free treatment.

RBC also calculates that the average U.S. tariff on Canadian goods now sits at just 1.9 percent, which compares to about 3.5 percent for Mexico and a minimum 10 percent for most other trading partners. That makes Canada the lowest-tariff trade partner among America’s major partners.

Ironically, that could turn out to be a competitive advantage for some industries. With exporters from most other countries facing higher duties, Canadian companies may gain U.S. market share at their expense.

One case in point, according to a report this week by Bloomberg News, is Guelph-based Linamar Corp., one of Canada’s largest auto parts makers, which has seen its stock surge 33 percent since hitting a 2025 low in early April.

Stalling out

So yes, there’s still hope on the trade front. But the bad news is there’s no good scenario—only damage control.

It’s not just the question of tariff levels, but the broader sense of unpredictability that’s undermining business confidence and investment.

The impact showed up in Friday’s Labour Force Survey report.

Canada’s job market stalled in April, adding just 7,400 net new jobs. Even that figure may be inflated by temporary hiring at Elections Canada for the federal vote, which helped drive a 37,000-job increase in public administration employment.

Since the start of the year, the economy has generated 52,000 jobs, but that’s entirely due to a strong January. Over the past three months, employment is actually down by 24,100 jobs. The unemployment rate ticked up to 6.9 percent, continuing a slow but steady climb.

The manufacturing sector lost 30,600 jobs last month, the largest monthly decline since April 2020. Wholesale trade was also a big drag. Ontario bore the brunt of the employment losses in April, shedding 35,000 jobs.

It could be worse, given the state of trade tensions and sliding confidence levels. But we’re already closing in on 7 percent unemployment, and there’s little evidence we’ve hit bottom.