Carney's cabinet meets for the first time as it stares down a pile of problems

Prime Minister Mark Carney's newly constituted cabinet met for the first time Wednesday on Parliament Hill as the government grapples with a whole host of challenges it will be charged with fixing.

The new ministry has three distinct challenges, among others, bubbling up on its watch: a U.S. trade war that's already having an impact on Canada's sluggish economy, persistent consumer affordability challenges and restlessness in Western Canada over the future of natural resources development.

To address cost-of-living concerns, Carney said cabinet's first order of business is directing Finance Minister François-Philippe Champagne to immediately draw up the legislation to pass what the government is calling a middle-class tax cut — a change that will save two-income families up to $825 a year.

"We're acting on affordability as we look to build up this economy," Carney said as he signed a "decision note" on the issue in front of the cameras in the cabinet room, not unlike how U.S. President Donald Trump has signed executive orders in the Oval Office.

Champagne said the tax cut will be introduced soon after Parliament returns later this month, and other initiatives will be outlined in the forthcoming speech from the throne — but there will be no budget until the fall, he said.

The last Liberal government's much-touted electric vehicle (EV) manufacturing strategy is also on shaky ground after Honda announced it will halt its multi-billion-dollar investments in this country — joining a growing list of indefinitely delayed, stalled or potentially failed Canadian EV projects amid tepid consumer demand for these vehicles and Trump's punishing tariffs on foreign-made autos.

Mélanie Joly, who moved from foreign affairs to industry in Tuesday's shuffle, said she will be fighting for autoworkers when she speaks to the head of Honda later today. "We'll make sure we're in solution mode," she said.

Carney also faces Western discontent with Alberta's premier Danielle Smith saying there needs to be a "reset" with how Ottawa treats provinces like hers after the perceived hostility of the last government. In the days since the federal election, Smith has said she will lower the threshold for referendums, potentially including one on Alberta sovereignty.

Smith's chief of staff is also raising red flags about Carney's new Toronto-area environment minister Julie Dabrusin, who says on her MP website she has "taken a strong stance against oil sands expansion," something she framed as a virtue.

One of former prime minister Justin Trudeau's former environment ministers, Steven Guilbeault, also seemed to pour cold water on expanding pipeline capacity Wednesday — although that's not really a decision for him to make now that he's in charge of Canadian culture and identity under Carney.

The prime minister himself has said he's open to approving major infrastructure, including conventional energy projects such as pipelines.

"There are no investors, no companies that are saying they want to build an east-west pipeline right now," Guilbeault told reporters ahead of the cabinet meeting, noting it will be industry that builds one, not the government.

"We bought a pipeline and that's only used right now at about 40 per cent capacity. Maybe we should maximize the use of existing infrastructure," the former environmental activist turned politician said.

It's not clear where Guilbeault got that 40 per cent usage figure. As of late last year, the company itself was reporting approximately 692,000 barrels of oil per day moving through its pipeline system — about 77 per cent of its maximum capacity.