Negotiations between Prime Minister Mark Carney, top aides in his Liberal government, and the White House on a new Canada-US “economic and security framework” resumed this week after US President Donald Trump abruptly canceled them last Friday.

In a brief social media post, Trump pulled the plug on the talks citing the impending entry into force of Ottawa’s new digital services tax. The Trump administration, like that of the Democrat Joe Biden before it, has vehemently opposed the tax, which would force Meta, Alphabet (Google), Amazon and other US-based tech giants to pay taxes on the enormous profits they generate in Canada from their online services.

Stung by Trump’s action, Canada quickly retreated. On Sunday evening, Carney announced the tax was being withdrawn. The White House gloated about Trump’s negotiating prowess in response, with his press secretary, Karoline Leavitt, declaring Canada “caved.”

Details about the Canada-US talks are clouded in secrecy, even as Canada seeks to hold Washington to a July 23 deadline for an agreement.

However, Canadian officials have indicated that Ottawa is ready to align Canada’s economic policies and military-security strategy vis a vis China even more closely with Washington; accelerate the militarization of the Arctic; and pay tens of billions of dollars to support Trump’s Golden Dome project, a continent-wide missile defence scheme aimed at making nuclear war “winnable.” US Ambassador to Canada Pete Hoekstra has also talked up the importance of establishing joint US-Canadian military bases in Canada’s Far North.

The Canadian ruling class has long viewed its close ties to Washington and Wall Street as pivotal to upholding and advancing its predatory global interests, and a pillar of its economic and political stability. But all that has been thrown topsy-turvy.

Not only has Trump effectively abrogated the US-Mexico-Canada Trade Agreement (the successor to NAFTA that he himself negotiated), hitting Canada with a barrage of tariffs. He has repeatedly vowed to make Canada America’s 51st state and use “economic force” to do so.

In an interview with Fox News broadcast last Sunday, Trump again voiced his annexationist ambitions. After a rant about Canadian trade practices, including its dairy-supply management system, Trump said, “Frankly, Canada should be the 51st state.” Only minutes before, the fascist US president had insisted that in any trade negotiations with Canada, “we have all the cards, every single one.”

Carney, a former central banker and lifelong representative of the financial oligarchy, led the Liberals to victory in the April 28 federal election. He did so based on the claim that he would be best able to counter Trump’s attempt to “break us so America can own us,” while negotiating a new “economic and security” partnership with Washington that secures Canada privileged access to the US market.

As the World Socialist Web Site has repeatedly explained, the Canadian ruling class’ principal objective is to secure a recognized place as US imperialism’s junior partner in a Trump-led Fortress North America—a protectionist economic bloc and military alliance aimed at securing global hegemony against all comers, above all China.

It has no qualms about working with and bolstering the fascist Trump as he seeks to impose a presidential dictatorship. Indeed, under Justin Trudeau and now Carney Ottawa has rushed to deepen its coordination with Washington’s border and immigration polices. This under conditions where Trump’s anti-immigrant witch hunt is very much the spearhead of his attempt to overturn core democratic rights and deploy the military to suppress mounting popular opposition.

There are, however, deep apprehensions in the ruling class about the current Canada-US negotiations. Even if Trump were to agree to withdraw all the tariffs, there is no guarantee he would not re-impose them under a different pretext in the future. Moreover, the White House is likely to insist that the cost of trade “concessions” to Canada are changes to its economic, foreign and military-security policies that will deepen its integration with the US, making it still more vulnerable to pressure from Washington and Wall Street.

The Canadian ruling class’ response to this predicament is to veer radically to the right. Under the cover of the poisonous Canadian nationalism it has whipped up, with the assistance of the trade unions and NDP, they are massively increasingly military spending in preparation for world war and dramatically intensifying the class war assault on the working class.

On June 9, Carney announced an immediate $9.3 billion or 17 percent military spending hike. This huge boost to the war budget, coming as governments at all levels turn the screws to slash all public and social spending, means that Canada will hit NATO’s old annual military-spending floor of 2 percent of GDP during the current fiscal year. This is five years ahead of the 2030 target set by Carney and Pierre Poilievre, the far-right leader of Conservatives, during the just completed election campaign.

In justifying this massive diversion of social resources to war, Carney asserted the Canadian ruling class’ determination to secure its share of the spoils in the imperialist drive to secure control over production networks, critical resources, markets and strategic territories in a new division of world. “Middle powers,” he declared, “compete for interests and attention, knowing that if they are not at the table, they’re on the menu.”

Massive as is this year’s 17% military spending increase, it is a mere down payment. Before the month of June was out, Carney had joined the other NATO heads of government in agreeing to raise the minimum military spending target to 5 percent of GDP by no later than 2035. This Carney acknowledged would mean an increase in military spending to the equivalent of $150 billion in current dollars. Raising such funds will require the elimination of what remains of the concessions made by the bourgeoisie to the working class following World War II, including all social programs, workplace protections, and benefits.

Canada’s ruling class bristles against Trump, but only in so far as he threatens their profits and sovereign “right” to the lion’s share of the profits derived from Canada’s abundant resources and the exploitation of its working class.

Their disagreements revolve entirely around areas where the interests of American and Canadian imperialism diverge or collide. Thus Ottawa has joined with the European imperialist powers in seeking to ensure that the US-NATO instigated war with Russia is intensified, and that Trump doesn’t make a deal with Moscow over the heads and at the expense of America’s NATO partners. While he was in Europe for the NATO leaders’ summit, Carney signed Canada up to participate in the European Union’s “Rearm Europe” program, with a view to strengthening Canada’s military-industrial base and its hand in the current and future negotiations with Washington.

Otherwise, the ruling class is rushing to implement Trump-like socio-economic policies, using his bullying as the cover to push through changes for which it has long agitated.

Carney has declared a “new era of “fiscal responsibility,” that is austerity. He has begun to flesh out what this means with his call for “sacrifices” to pay for rearmament and war, and his-oft repeated pledges to forego any tax increases and to use AI to increase federal-worker “productivity.”  

Backed by the Conservatives, the government rushed legislation through parliament before it rose for the summer that removes environmental and other regulatory restrictions on resource and infrastructure projects deemed to be in the “national interest.” It has also tabled an omnibus bill that guts the rights of refugee claimants, and grants the police and spy agencies sweeping powers to obtain information about targeted individuals and the internet, medical and other services provided them without a warrant. Carney has also pledged to table legislation that would ban protests at schools, places of worship, and other locations—a direct response to widespread opposition to Israel’s imperialist-backed genocidal assault on the Gaza Palestinians.

The trade union bureaucracy and social-democratic New Democrats have made the lurch to the right in political life possible through their systematically suppression of the class struggle and promotion of Canadian nationalism and the Canadian state as a “progressive” alternative to Trump. All of the major unions were unstinting supporters of the Trudeau Liberal government. Canadian Labour Congress head Bea Bruske congratulated Carney on his election victory in April, while Canadian Union of Postal Workers President Jan Simpson hailed it as the “best” possible outcome for workers. Carney’s Liberal regime has proceeded to force postal workers to vote on a concessions-riddled proposed contract drafted by Canada Post management.

Top union officials have echoed and amplified the ruling elite’s nationalist rhetoric over the trade talks with Trump. Lana Payne, president of Unifor, Canada’s largest private-sector union, has repeated Carney’s mantra of Trump being out to get us. Unifor, the CLC, and the NDP are all represented on the government’s Canada-US advisory council alongside leading figures from corporate Canada.

In opposition to the corporatist alliance of the unions, government, and big business for austerity and war, the Socialist Equality Party has stood alone in advancing a fighting program for the working class to oppose Trump and all sections of the Canadian ruling class on the basis of a socialist-internationalist program. As the SEP declared in its election statement in April,

Trump is a menace to the workers of Canada and the world. But workers can’t fight him and all he represents—oligarchy, dictatorship and imperialist war—by lining up with the Canadian bourgeoisie, any of its rival factions or political representatives.

Rather, they must assert their independent class interests by forging a movement for workers’ power and fighting to fuse their struggles with the mass opposition to Trump now emerging within the American working class. Canadian workers must assist their American colleagues in breaking free of the Democratic Party, which no less than Trump’s fascist Republicans is a party of Wall Street and the CIA, and its trade union allies.

The cross-border movement must spearhead the struggle for a united socialist North America.