Canada announces $3.4B rail investment amid US trade tensions

Historic rail investment

Prime Minister Mark Carney on Thursday announced a C$4.7 billion ($3.4 billion) manufacturing investment in Thunder Bay, Ontario, calling the project a "historic investment" aimed at strengthening domestic production capabilities. The funding will support the construction of 313 railway cars as part of a broader modernization of the national rail system, with manufacturing set to take place exclusively within the country using Canadian steel and labor.

Carney emphasized that the initiative would repatriate production previously conducted abroad, stating that the rail cars would be built domestically at a critical moment for the national economy. "(Rail) cars that used to be built in the US will be built right here in Canada," he said. "All Canadian ... when Canada needs it the most."

Trade negotiations stall

The announcement comes as diplomatic relations with Washington have deteriorated sharply, with Carney ordering Canadian negotiators to return home from the US capital last week after accusing American officials of demanding unacceptable concessions. The proposed terms reportedly included requiring US approval before Ottawa could sign future trade agreements with third countries, a condition that would infringe on Canadian sovereignty.

During a press briefing in Thunder Bay, Carney rejected accusations from US Commerce Secretary Howard Lutnick that he had deliberately derailed negotiations for political leverage, noting that he deals directly with the American president rather than unelected officials. Carney said Lutnick lacks understanding of Canadian political dynamics, adding that his government would not accept terms that compromise the nation's sovereign right to conduct independent trade policy.

Economic diversification push

Beyond the rail project, Ottawa is preparing to host a major investment summit on September 14-15 focused on energy, critical minerals, defense and advanced technology sectors, according to the Globe and Mail daily. The gathering is expected to draw approximately 250 chief executives from global corporations representing nearly $120 trillion in assets, signaling Canada's effort to attract diverse international partnerships.

Carney also addressed questions regarding the potential attendance of Russian President Vladimir Putin at the upcoming G20 summit, noting that the host nation retains discretion over invitations. Canada's message to the Russian leader remains unequivocal, he added: "Get out of Ukraine."