The Carney government is preparing to take a more active role in Canada’s economy, signaling increased intervention in key industrial sectors to bolster economic sovereignty. Measures under consideration include forced divestiture of U.S.-owned Stelco Inc., equity stakes in strategic companies, and support for tariff-hit sectors. Industry Minister Mélanie Joly emphasized the need for greater government involvement during a recent event, stating, "We have to accept that the government’s role will be bigger than usual because of the depth of the crisis." The government aims to balance support for domestic industries with fiscal prudence ahead of the federal budget on Nov. 5.
Joly highlighted plans to provide financing and take equity positions in certain companies to address geopolitical risks. She cited a hypothetical example of a steel plant upgrading operations for infrastructure or defense applications. While stopping short of nationalizing Stelco, Joly reiterated that the company has breached its commitments. The government’s strategy mirrors actions taken by the Trump administration, which secured equity in Canadian miners Lithium Americas Corp. and Trilogy Metals Inc.
Corporate Canada appears receptive to the idea of increased government intervention. Bank of Montreal CEO Darryl White suggested government-backed risk-sharing tools and loan guarantees to boost access to capital for defense companies. Joly’s vision aligns with past interventions, such as equity stakes in automakers during the 2008-09 financial crisis and Air Canada during the COVID-19 pandemic. The government’s challenge lies in avoiding protectionism while fostering competition and maintaining international partnerships.