In this week’s edition, Prime Minister Mark Carney enters a pivotal phase of leadership, cementing long-term defence pledges, navigating controversial economic reforms, and setting the stage for Canada’s future in AI innovation. As Bill C-5 receives Royal Assent amid sharp divides, and the NATO Summit redefines national security expectations, Canada also turns its sights on AI-driven growth.
Bill C-5 Receives Royal Assent Amid Backlash Over Power, Process, and Rights
The One Canadian Economy Act (Bill C-5) received Royal Assent on June 26, 2025, enacting major reforms to accelerate infrastructure approvals, remove federal barriers to internal trade and labour mobility, and launch the Federal Major Projects Office with formalized Indigenous consultation.
The Senate confirmed that Her Excellency the Governor General granted Royal Assent, and the legislation will take effect once the House of Commons is formally advised. Despite Senator McPhedran’s proposed amendment to delay passage, the Senate passed the bill, which became Chapter 2 of the Statutes of Canada.
Prime Minister Carney defended the bill as essential to counter U.S. trade aggression and drive economic growth, though critics called it a betrayal of reconciliation and warned of potential legal challenges.
Carney reiterated that the legislation marks a major step toward national economic integration and fast-tracking key projects. The bill, introduced by Intergovernmental Affairs Minister Dominic LeBlanc, passed a third reading with a vote of 306–31, with two members paired.
Following a point of order raised by MP Jenny Kwan, the Speaker ruled to split Bill C-5 into two votes: the Free Trade and Labour Mobility in Canada Act, which passed with broad support, and the Building Canada Act, which faced more dissent. Liberal MP Kevin Lamoureux described the legislation as a fulfillment of the government’s election promise and praised the “Team Canada” approach shaped by recent First Ministers’ collaboration.
Conservatives backed the Liberals in passing the bill, arguing it was necessary for economic momentum, while Indigenous and environmental groups raised concerns over cabinet overreach. Premiers remain divided over the selection and approval of major projects.
Opposition parties, along with dissenting Liberal MPs like Nathaniel Erskine-Smith and NDP MP Leah Gazan, criticized the bill for its sweeping, undemocratic provisions and warned of constitutional challenges, particularly concerning Indigenous consultation and oversight.
The bill passed despite strong opposition from Indigenous leaders and environmental groups, who argue it threatens Indigenous rights and environmental protections.
Senator Patti LaBoucane-Benson and others tabled documents from federal departments, provincial leaders, Indigenous nations, and civil society groups reflecting a wide range of perspectives on Bill C-5.
Amendments proposed by Senators Paul Prosper and Mary Jane McCallum to enhance protections for Indigenous consent were both defeated in Senate votes.
The Indigenous Resource Network, however, also supported the bill, viewing it as an opportunity for economic reconciliation by enabling Indigenous participation in resource development. Some First Nations leaders, however, remained skeptical, warning that weakened environmental safeguards could threaten land, water, and sacred sites.
An editorial from The Hill Times criticized the process behind Bill C-5’s passage, arguing it was rushed and failed to allow sufficient scrutiny or engagement with Indigenous communities. It warned that the bill’s fast-tracking provisions risk undermining environmental protections and Indigenous rights under the guise of national interest.
Canada Commits to 5% GDP Defence Investment at NATO Summit in The Hague
At the NATO Summit in the Netherlands, Prime Minister Carney announced that Canada has joined a new Defence Investment Pledge, committing to raise defence spending to 5% of GDP by 2035 to strengthen national and collective security.
This includes 3.5% for core military capabilities and 1.5% for critical infrastructure and dual-use security investments, with a progress review set for 2029. The new target more than doubles the previous 2% goal and is expected to raise Canada’s defence budget to approximately $150 billion annually.
At the summit, NATO leaders reaffirmed their commitment to collective defence, pledged similar 5% investments, and emphasized unity against threats such as Russia and terrorism while continuing support for Ukraine.
Carney highlighted that Canadian workers will play a central role in strengthening the country’s forces and infrastructure.
He participated in key discussions at the North Atlantic Council, NATO’s principal decision-making body, and thanked NATO Secretary-General Mark Rutte, Dutch Prime Minister Dick Schoof, and the Kingdom of the Netherlands for hosting the summit, emphasizing that the event strengthened collective security for a safer Canada and world.
The Canadian Press noted uncertainty over how spending will be measured, what qualifies under the 5%, and whether political will can sustain the plan, while Carney frames it as an economic and strategic investment.
The Hill Times reported that Carney’s defence boost and the Canada-EU security pact signalled a serious shift in Ottawa’s defence posture, opening access to Europe’s $235-billion procurement market and aiming to reduce dependence on U.S. supply chains.
$300M AI Fund to Drive Innovation in Life Sciences and Energy
The federal government unveiled a $300 million AI Compute Access Fund as part of its Sovereign AI Compute Strategy. The initiative aims to boost artificial intelligence solutions in life sciences, energy, and advanced manufacturing sectors, especially for small and medium-sized enterprises.
Additional support under the strategy includes $700 million for AI data centres, $705 million for a new AI supercomputing system, and $200 million to upgrade existing infrastructure. The funding fulfills Canada’s commitments under the G7 AI Adoption Roadmap and positions the country as a global player in the responsible, high-performance use of AI technologies.
As Carney’s government enters the second half of 2025, the convergence of defence, economy, and digital innovation offers both promise and pressure. The real test ahead will be about delivering results while maintaining public trust.
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