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California Governor Gavin Newsom speaks as he announces the Golden State Literacy Plan and deployment of literacy coaches statewide, at the Clinton Elementary School in Compton, California, USA, on June 5, 2025.
8: California Governor Gavin Newsom posted an eight-minute video on social media Tuesday night in which he berated US President Donald Trump for sending federal troops into Los Angeles to support local police amid protests and riots against immigration enforcement. Newsom has been increasingly positioning himself as a national-level opponent of Trump.
450: The US Centers for Disease Control has reinstated 450 employees who were terminated in the recent rounds of DOGE-led layoffs, which cut 10,000 federal health workers. The reinstated employees work in a range of areas, including STD prevention, global health, environmental health, and lead poisoning prevention.
30 billion: Canada needs to invest at least $30 billion in its critical minerals industry by 2040 if it hopes to meet rising demand stoked by the green energy transition. Critical minerals such as lithium and copper are key components of electric vehicles, batteries, and solar panels. Industry leaders say permitting needs to be streamlined as well.
4: Formula 1 driver Max Verstappenwill attempt to win a record fourth consecutive Canadian Grand Prix when the race roars through the notoriously brake-heavy course on Montreal’s Île Notre-Dame this Sunday.In 2023, the Washington Post embarrassed Justin Trudeau when it published a leaked Pentagon report bemoaning Canada’s “widespread defense shortfalls.” They were so bad, the paper said, they were “straining partner relationships and alliance contributions.”
For years, NATO allies were frustrated that the Canadians persistently failed to meet the 2% spending target that is supposed to be the cover charge for being a member of the world’s most powerful military alliance.
But this week, newly elected Prime Minister Mark Carney sought to put an end to all of that, announcing a new defense budget of CA$62.7 billion between 2025 and 2026. That’s a 17% increase over the current budget, and it would get Canada to the NATO benchmark this year.
It’s a sea change in priorities for a country that—bound on three sides by vast oceans, one of which is permanently frozen, and on the other by a long undefended border with the United States—hasn’t had a compelling reason to spend on defense.
But ever since 2022, when the Russians made their failed thunder run to Kyiv, the world has become more dangerous, and opinion has shifted. At last year’s NATO summit, Trudeau finally gave in to pressure and promised that Canada would hit the target—but not until 2032. This year, Canada was to spend just 1.37% of GDP on defense.
It’s not yet clear where all the money will go, and whether all of it will meet NATO’s definition of military spending, but Canadians are finally doing what their allies want, because they have to.
“A new imperialism threatens,” Carney said. “Middle powers must compete for interests and attention, knowing that if they’re not at the table, they’re on the menu.”
Canadians have reluctantly concluded they have to pony up. A recent poll shows that 65% of voters want more military spending, up from 34% in 2022.
Russian aggression and erratic American leadership have shaken up the old calculations about the wisdom of relying on the Americans to provide continental defense.
“The United States is beginning to monetize its hegemony,” Carney said, “charging for access to its markets and reducing its relative contributions to our collective security.”
But there is another factor: Trump. In his first term, the US president derided allies as freeloaders and urged them to spend more, but yielded limited results. In his second term, Trump has been more belligerent and threatening, and he is getting what he (and, to be fair, most NATO militaries) wants: bigger defense budgets.
In fact, he has upped the ante, demanding a new benchmark of 5%, a target that many NATO countries have tentatively agreed to—and are expected to confirm when they meet in the Netherlands later this month. As in Canada, the policy of increased defense spending enjoys broad approval in most of Europe, as voters worry about Russian aggression and American unpredictability.
In Canada, the new spending feels overdue. The Canadian Armed Forces have been understaffed for a decade, and, as Carney pointed out Monday, only one of the country’s four submarines is operational. Having relied on Uncle Sam for so long, Canada is now unable to protect the sovereignty in its territorial waters and the Arctic on its own.
The spending may also help Carney smooth relations with Trump, who has imposed job-killing tariffs on Canada and threatened to annex the country. Carney won the recent election by promising to stand up to Trump, resist American aggression, and assert Canadian sovereignty. He has said he wants to join the nascent European rearmament plan, and has ordered a review of Canada’s CA$19-billion (US$15 billion) deal to purchase 88 F-35 fighter jets from US defense firm Lockheed Martin.
Carney, and Canada, have a lot riding on working out an arrangement with Trump. By boosting military spending, Carney has removed a long-standing irritant and improved his negotiating position in the make-or-break negotiations ahead.
What We’re Watching: Canada-US deal takes shape, G7 kicks off in Kananaskis, Wildfires rage
Flags fly above the Peace Arch at a Canada-US border crossing in Blaine, Washington, USA, on April 2, 2025.
Canada, US may be closer to a deal
Canadian and US officials may be approaching at least the framework of a deal covering trade and other issues, CBC reported Wednesday. Sources say that in exchange for tariff relief from the United States, Canada would agree to participate in Washington’s Golden Dome missile defense program and build infrastructure in the Arctic. But Canadian officials have cautioned there is as of yet no deal on the table.
The G7 summit: big guest list and big questions
The tarmac at Calgary International Airport will be clogged next week when leaders from around the world arrive for the G7 summit of the world’s advanced economy democracies at nearby Kananaskis. In addition to G7 leaders, the heads of Australia, Brazil, India, Mexico, and Ukraine will attend. The big question: Can seven of the world’s most influential countries agree on a strategy for key issues such as trade, the climate, and Ukraine when the most powerful one of all now has radically different views from the rest?
Wildfires pose health risks near and far
Another terrible wildfire season in the northern forest has forced tens of thousands of Canadians, many of them from isolated Indigenous communities, to be evacuated to cities as distant as Niagara Falls, where they are staying in university dorms and hotels. In addition to the terrible disruption for those residents, the fires are sending smoke and smog as far away as Milwaukee. Worryingly, there is reason to fear the resulting health hazards could be more severe than usual.
Just as President Donald Trump promised on the campaign trail, the House-passed tax-policy bill will end taxes on tips. However, only a small proportion of Americans will actually benefit from this policy, as this Graphic Truth shows. Even among Americans in the bottom quartile of household income, just 5% have a tipped occupation. The “no tax on tips” policy has faced criticism for an entirely separate reason: Hedge fund managers could exploit the bill to limit their own tax liability, the left-leaning Center for American Progress warned. The policy was a winner on the campaign trail, but that might change if it becomes law.
What We’re Watching: Trump doubles metal tariffs, Canada Liberals bid to secure the border, Wildfires spread
US President Donald Trump appears onstage during a visit at US Steel Corporation–Irvin Works in West Mifflin, Pennsylvania, USA, on May 30, 2025.
Trump doubles steel and aluminum duties
Days after a judge nixed Donald Trump’s “Liberation Day” tariffs, the US president signed an executive order doubling steel and aluminum duties to 50%. Trump hopes the tariffs will boost domestic steel and aluminum industries, but the higher duties are terrible news for Canada, which is the top exporter of both metals to the US. Canada’s US-bound exports of steel were already down before Trump doubled the tariffs. Now they’re set to drop further — and take jobs with them. Mark Carney must now decide if he’ll respond, and risk provoking Trump, or back down and betray the anti-Trump, “elbows up” rhetoric he ran on.
Liberals introduce border bill in new Parliament
On Tuesday, Public Safety Minister Gary Anandasangareeintroduced the Strong Borders Act, which aims to strengthen border security, combat the trafficking of fentanyl and guns, and tackle money laundering. Anandasangaree said the bill was “not exclusively about the United States,” but admitted it aimed to remedy certain “irritants for the US.” The law would give the government sweeping discretionary powers — to open mail, for instance — so it is expected to meet a measure of resistance in Parliament.
Canadian wildfires send toxic smoke south
Wildfires in Canada have burned 2.1 million hectares (5.2 million acres) of land so far this year, sending hazardous smoke into the Midwest and East Coast of the United States, and even as far as Europe. Experts say the wildfire season in Canada is off to an extraordinary, and dangerous, start, reminiscent of the 2023 season, which was the worst in the country’s history. The flames are putting at risk the health of millions on both sides of the border.U.S. President Donald Trump and Canadian Prime Minister Mark Carney meet in the Oval Office at the White House in Washington, D.C., U.S., May 6, 2025.
Canadians might not like to hear this, but given President Donald Trump’s tariffs and threats, there’s at least one area of economic policy where the country owes the US leader a strange sort of thanks.
For decades, Canada’s 13 provinces and territories have maintained trade barriers against each other, a bewildering arrangement of tariffs, quotas, and regulations that has boosted prices, reduced efficiency, and yielded some absurd stories: A New Brunswick man whose beer was confiscated as he crossed provincial lines after a trip to Quebec has taken his case all the way to the supreme court.
But in response to Trump’s economic warfare on Canada, Prime Minister Mark Carney has promised to eliminate interprovincial trade barriers by July 1, Canada Day, a date that is equal parts symbolic and, let’s say, ambitious. The hope is that the economic impact of Trump’s tariffs can be at least partially mitigated by dropping Canada’s internal trade barriers.
Since 2017, Canada has had a Canadian Free Trade Agreement, but it was far from comprehensive and full of exemptions. The federal government is now talking about “one Canadian economy,” not 13. There’s even a minister in charge of it, Dominic LeBlanc, who will work with Chrystia Freeland, who is responsible for internal trade.
The cost of internal trade barriers is disputed. Ontario says they sap CA$200 billion (US$146.4 billion) of GDP a year. Other observers aren’t so sure. What’s certain is that barriers have long existed in Canada for a variety of reasons, including local protectionism for key provincial industries, such as fisheries in Atlantic Canada and timber in British Columbia, and industry-specific regulations, like where fish or lumber can be processed.
Doing away with trade barriers isn’t just a matter of lowering duties, but also of streamlining and harmonizing regulations across provinces. It’s a big lift, especially when one province, Quebec, tends to insist on greater protection for, among other things, its culture and its dairy industry, citing its distinctness.
To make progress, Carney this week held a meeting with provincial and territorial leaders, which ended with a commitment to “rapidly” reach an agreement on consumer goods, shipping, and harmonizing credentials. A nurse registered in Ontario, for example, should be able to practice in Saskatchewan within a month of moving there.
Some provinces have already struck their own bilateral trade deals. Ontario introduced legislation in April to lower barriers. It has since penned agreements with Alberta, Prince Edward Island, and Saskatchewan. In April, New Brunswick and Newfoundland and Labrador signed their own free trade agreement. Quebec says it’s open to deals and has a bill similar to Ontario’s. Ditto Manitoba. Nova Scotia is undertaking similar work.
These agreements and bills look like progress, and they are. But experts warn the hard part lies ahead in implementing what trade expert Diya Jiang and Canada expert Daniel Béland note are the “complex and technical” elements involved in trade liberalization, including various provincial regulations that account for local geography and climate. Driving a truck through the mountains of BC is different than cruising through the plains of Manitoba, for example.
As economist Trevor Tombeputs it, “Serious action requires provincial action,” and while he notes we’re seeing some of that, “much will depend on provincial follow-through.” That’s to say, for instance, that a province will have to be willing to give up industry protections, like laws in Newfoundland and Labrador that mandate local fish processing.
Still, even with all the obstacles, Tombe concludes, “We might be entering a new era for internal trade in Canada.” And for that, Canada, unexpectedly, has Trump to thank.
Hard Numbers: Trump issues sweeping travel ban, BoC holds rates steady, US funds “self-deportations,” and more...
US President Donald Trump speaks as he attends a “Summer Soiree” held on the South Lawn of the White House in Washington, D.C., USA, on June 4, 2025.
12: US President Donald Trump has banned visitors to the US from 12 countries: Afghanistan, Myanmar, Chad, the Republic of Congo, Equatorial Guinea, Eritrea, Haiti, Iran, Libya, Somalia, Sudan and Yemen. Another seven countries will face greater restrictions. The ban, which Trump based on national security grounds, takes effect on Monday.
2.75: The Bank of Canada held its key interest rate steady for the second time in a row, leaving it at 2.75% amid uncertainty about the extent and effect of US tariff increases. The bank said it may still cut rates later this year if the economy continues to struggle.
20: US intelligence believes Ukraine’s expansive drone attack on Russian airfields last weekend struck just 20 planes, destroying 10 – half the numbers claimed by Kyiv. Still, the damage was significant and Russia will respond “very strongly,” according to Trump, who spoke with Russian President Vladimir Putin on Wednesday.
$250 million: The US State Department has earmarked $250 million to cover travel expenses for migrants without legal status who chose to “self-deport.” The money has been repurposed from funds previously used to aid refugees.
31: Oilers forward Leon Draisatl scored with 31 seconds left in the first extra period, to give Edmonton a comeback win in game 1 of the Stanley Cup Finals against the defending champ Florida Panthers. As many of our readers will be (painfully) aware, a Canadian team hasn’t won the cup since 1993.