Prime Minister Mark Carney, who took office on March 14, introduced his new cabinet recently and lamented their focus on the economy, as the strife brought about by tariffs and threats of annexation from the United States weighs on the nation.

Carney said the 28 ministers’ primary focus will the economy, as the nation undergoes an “industrial transformation.”  The shift notably brings in Anita Anand, who previously served as defense minister, as the minister of foreign relations. Carney’s election victory was fueled by his drive to confront U.S. aggression and his experience leading Canada and the United Kingdom’s central banks.

“Canadians elected this new government with a strong mandate to define a new economic and security relationship with the United States, to build a stronger economy, to reduce the cost of living and to keep our communities safe,” Carney’s office said, per CNN.

Canada’s gross domestic product (GDP) contracted by 0.2% in February for the first time since November, as mining, oil and gas, and construction sectors saw declining activities. The decline can be partially attributed to snowstorms across the region, but economist warn that the economy will continue to falter under U.S. imposed tariffs.

The threat of tariffs led to a slight uptick in demand in February as many stocked up, leading to a slight increase in the manufacturing sector, according to Reuters, but as tariff anxieties increase, demand shifts. Additionally, the Canadian dollar has been weakening, with a 0.04% drop in value.

In January, Canada’s GDP grew by 0.4% and it was predicted to grow by 0.1% in March. In previous years, Canada’s economy has grown more in the second half of the year than the first, leading many to write off contractions as typical fluctuations. However, with tariffs on steel, aluminum and automotive tariffs from the U.S., the nation’s largest trading partner, could weigh on further economic growth.

Additionally, the unemployment rate rose to 6.9% in April, the highest the nation has seen since November, which had been an eight-year high outside of the pandemic months, according to Reuters. Only 7,400 jobs were added in April, far from the amount needed to recover from the 32,600 jobs lost in February. Job losses appear centered around the manufacturing sector as they react to tariffs.

The Bank of Canada is anticipating slowed growth in the job market in the coming months as exports drop, prices increase, hiring falls and layoffs soar.

“Overall, we are seeing a job market that was weak heading into the trade war, now looking like it could soon buckle. Today’s report supports the case for a Bank of Canada cut in June,” said Ali Jaffery, senior economist at CIBC Capital Markets, per Reuters.

It is hard to anticipate the shape of the economy in the coming months, especially as Carney sets out to address the tariffs in his first months in office. “We have to address and come to a new arrangement with the Americans,” Carney said, per CNN. “But our primary focus is on the economy, and our primary focus is on the Canadian economy.”

According to FCIB’s Credit and Collection Survey, most credit managers offer customers in Canada 1–30-day terms (70%) or 31–60-day terms (27%), with customers being 13 days beyond terms on average. Payment delays have remained relatively the same, but 24% believe they are increasing. Delays are largely attributed to billing disputes (52%), customer payment policy (45%) and cash flow issues (21%).

“Deductions and disputes have increased due to tariffs and fees,” one respondent wrote on extending credit to customers in Canada.