Canada to Unveil Initial List of Priority Infrastructure, Trade Projects — 2nd Update

By Paul Vieira

OTTAWA--Canadian Prime Minister Mark Carney said the government will identify Thursday an initial list of major infrastructure projects that it wants to pursue as part of a revamp of an economy struggling under U.S. President Trump's tariffs.

The projects "will increase our independence, boost our economy, align with the interests of indigenous peoples, and advance our climate goals," said Carney in remarks to a Liberal Party caucus meeting in Edmonton, Alberta. Canada's legislature returns to work next week.

Later, in an interview with the "Real Talk Ryan Jespersen" podcast, Carney said Thursday's announcement would represent a preliminary tranche of projects the government could pursue. A second wave of potential projects would be rolled out around mid-November, he added.

During a trip to Germany last month, Carney signaled projects that are of top priority for Ottawa include an expansion at the existing Port of Montreal and a new port in Churchill, Manitoba, which could allow for the shipment of liquefied natural gas to Europe.

Carney's remarks to the governing caucus also highlighted his policy priorities for the fall. Carney said the government would also introduce a revised climate-change policy, "that focuses on results over objectives and investments over prohibition." The comments may signal tweaks to measures that have angered the energy sector, such as a carbon-emissions cap on oil-and-gas producers.

Last week, Carney halted the introduction of an electric-vehicle sales mandate, which would have compelled 20% of all new car sales to be of the zero-emission category.

Carney, the former top central banker in both Canada and the U.K., faces the daunting task of turning around an economy that is at its weakest point in the post-pandemic period. Gross domestic product declined in the second quarter, due to a sharp drop in exports, and the unemployment rate has climbed to a nine-year high, excluding the period covering the Covid-19 pandemic.

The bulk of Canada's exports to the U.S. are entering duty free, as they comply with the terms of the U.S.-Mexico-Canada trade treaty. Still, key Canadian exports such as automobiles, steel and aluminum face hefty tariffs of up to 50%, leading to job losses in the country's manufacturing sector.

Carney has made the construction of major resource and infrastructure projects a key tenet in his plan to rebuild an economy struggling under trade-policy uncertainty fueled by the Trump administration. Last month, he established a new office, based in Calgary, Alberta, to get new projects build faster, and help structure and co-ordinate financing as needed.

One of Carney's first pieces of legislation that won support from lawmakers was a bill to accelerate approval of such projects. Under the legislation, the federal cabinet, which Carney leads, will decide which projects--from highways, ports, crude-oil pipelines and mines--are deemed a national priority. The projects must clear certain thresholds, among them that they deliver notable benefits for the Canadian economy and affected indigenous communities, have a high likelihood of completion, and contribute to limiting carbon emissions.

In his podcast interview, Carney reiterated a crude-oil pipeline is among the projects that might be considered but didn't elaborate.

He had argued that building the trade infrastructure required to sell goods to non-U.S. markets had become too arduous in Canada, and that was holding back economic growth. Diversifying trade was crucial given the Trump administration's mercantilist bent.

"What this moment has revealed is that there are limits to our economic independence right now, limits we have to tackle head on," Carney said.

Write to Paul Vieira at paul.vieira@wsj.com