Regional Summary
The Subsidy Hangover Across the Americas this week, governments discovered that spending promises made to stay in power are easier to announce than to sustain — and that the bills, whether fiscal, diplomatic, or coalition, arrive faster than the benefits. Canada’s leap to NATO’s 2% defence-spending target, announced by Mark Carney, the prime minister, from the deck of a warship in Halifax, looks less like conviction than like a political debt paid under duress. For thirty years, Canada spent little on defence while others carried the burden; now it pledges 5% of GDP by 2035, a figure so ambitious it strains belief. The promise buys credibility with Washington at a moment when Donald Trump’s tariff threats have made alliance membership feel essential. Yet the Bank of Canada held rates at 2.25% the same week, warning that oil prices could force tightening — a reminder that the money Mr Carney is pledging away may not exist when the bills come due. Defence surges funded during good times rarely survive the next downturn. In Chile, José Antonio Kast, the president, is learning the arithmetic of austerity. His approval rating fell 13 points in a single month after he scrapped fuel subsidies, sending petrol prices up by as much as 54%. Students filled Santiago’s streets; police answered with water cannon and arrested a 13-year-old. The president, elected on a law-and-order platform, also cut 72 billion pesos from the security ministry, including 51 billion from the Carabineros who were dispersing his opponents. Mr Kast inherited record copper and lithium revenues from Codelco, the state copper company — 84% of its $2.4 billion profit came from a state lithium joint venture his predecessors arranged — yet he chose to hurt consumers rather than spend the windfall. Ideology, not insolvency, is driving the backlash. Mexico’s central bank made the opposite bet, cutting its benchmark rate to 6.75% even as inflation touched 4.63%, its highest since 2024. Two of five board members disagreed. The cut looks like a quiet subsidy to a slowing economy at the cost of price discipline — echoing the spending Claudia Sheinbaum, the president, is dispensing through a new pension reaching 3.5 million women. Ms Sheinbaum’s political instincts are sharp: she abolished bloated pensions for former officials of the state electricity company and Pemex, the state oil company, presenting redistribution as populism. But loose policy from the central bank, combined with peso weakness, risks making the transfers self-defeating if inflation eats them away. Brazil shows where this leads. Luiz Inácio Lula da Silva, the president, enjoys 61% approval, yet nearly three-quarters of voters aged 16 to 24 disapprove of him, and polls show Flávio Bolsonaro — son of a man serving 27 years in prison — running level for 2026. Mr Lula’s coalition partners, the Brazilian Democratic Movement and the Social Democratic Party, have already signalled they will not join his re-election alliance, forcing the Workers’ Party back onto a narrow left-wing base. The spending that bought broad popularity has not purchased loyalty, least of all among the young, who entered the workforce amid inflation and fiscal strain they associate with incumbency rather than opposition. Governments are mortgaging future fiscal and political capital to meet today’s crises, and the repayment schedule is accelerating. Canada binds itself to defence outlays it may not afford; Chile discovers that cutting subsidies without a growth story produces revolt; Mexico eases monetary policy into rising prices; Brazil’s governing coalition frays even as headline approval holds. In each case, leaders treated public money or institutional credibility as a resource to be spent now and replenished later. The week’s evidence suggests that “later” keeps arriving sooner than expected.Country Summaries
Canada
Canada reached NATO’s 2% defence spending target for the first time since 1990, with Mark Carney, the prime minister, announcing over $3 billion in new military infrastructure for the Maritime provinces from the deck of a warship in Halifax.
The milestone caps a defence surge that has transformed Canada from a laggard into a model alliance member. Mr Carney pledged to raise spending to 5% of GDP by 2035, far above NATO’s target. The money will modernise CFB Halifax and build facilities for new warships and aircraft — the biggest defence investment in a generation.
Canada’s opposition parties reshuffled as the government built its defence record. Avi Lewis, a filmmaker and activist, won the NDP leadership with 56% of votes, but immediately faced rebellion from his own party. Naheed Nenshi, who leads the Alberta NDP, and Saskatchewan’s Carla Beck broke with Lewis over his opposition to fossil fuel development. The split exposes fractures between the federal party’s environmental stance and Prairie pragmatism.
The Conservatives took a different approach. Pierre Poilievre gave a long interview on Joe Rogan’s podcast, reaching an estimated 20 million viewers. Critics fact-checked his claims about immigration numbers, but supporters praised his reach beyond Canadian media.
The government faced its own tensions over China policy. Michael Ma, a Liberal MP who crossed the floor from the Conservatives, questioned witnesses about Uyghur forced labour, downplaying human rights abuses. Opposition MPs demanded his removal from caucus, while Jonathan Hodgson, the energy minister, suggested Mr Ma’s views don’t reflect party positions.
Cultural politics flared when Air Canada’s CEO gave condolences only in English after a deadly crash that killed French Canadian pilot Antoine Forest. Mr Carney, François Legault, Quebec’s premier, and Bloc leaders called the response thoughtless, with some demanding resignation. The controversy showed how language remains sensitive in federal politics.
Meanwhile, the Bank of Canada held its policy rate at 2.25% amid concerns over rising energy prices from the Iran war. Carolyn Rogers, the deputy governor, warned the central bank must prevent oil price increases from spreading to other sectors, as financial markets positioned for potential rate hikes later this year.
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- Canada reaches NATO 2% defence spending target, announces $3B for Maritime provinces — For the first time since 1990, Canada has met NATO’s 2% GDP defence spending target. Mark Carney, the prime minister, announced over $3 billion in new defence infrastructure spending for Nova Scotia and New Brunswick, with $2+ billion for Nova Scotia alone to modernise CFB Halifax and build facilities for new warships and aircraft. (globalnews.ca)
- Air Canada CEO faces backlash for English-only condolences after fatal LaGuardia crash — Michael Rousseau, Air Canada’s CEO, delivered condolences exclusively in English following a deadly plane crash at LaGuardia Airport that killed two pilots, including French Canadian Antoine Forest. Mark Carney, the prime minister, François Legault, Quebec’s premier, and Bloc Québécois leaders called his response lacking in judgment and compassion, with some demanding his resignation. (ctvnews.ca)
- Avi Lewis elected NDP federal leader on first ballot, faces immediate division from Prairie wings — Filmmaker and activist Avi Lewis won the NDP leadership with 56% of votes at the party’s Winnipeg convention, succeeding Jagmeet Singh. Naheed Nenshi, Alberta’s NDP leader, and Carla Beck, Saskatchewan’s leader, immediately distanced their provincial parties from Mr Lewis over his opposition to fossil fuel development, highlighting deep internal divisions. (cbc.ca)
- Mark Carney’s low Question Period attendance draws opposition criticism — Analysis shows Mark Carney, the prime minister, has attended Question Period less than 30% of the time since taking office, significantly lower than his predecessors. Opposition parties criticised his absence from parliamentary duties while he travels internationally for trade and diplomatic meetings. (globalnews.ca)
- Carney’s office clarifies he did raise human rights with Xi Jinping in Beijing meeting — Mark Carney’s office corrected parliamentary documents that suggested he had not ‘proactively’ raised human rights or foreign interference during his January meeting with Xi Jinping, China’s president. The clarification came after Conservative MPs questioned whether these issues were addressed during the Beijing visit. (ctvnews.ca)
- Canadian Armed Forces members safe after missile intercepted near Israel-Lebanon border — All Canadian Armed Forces personnel in the Middle East were reported safe after a missile was intercepted near the Israel-Lebanon border. The Department of National Defence confirmed approximately 200 CAF members are stationed in the region, including UN Military Observers under Operation Jade. (nationalpost.com)
- Carney creates parallel bureaucracy structures to bypass federal civil service — Mark Carney, the prime minister, is establishing new parallel bureaucratic structures including the MPO (headed by Dawn Farrell) and Build Canada Homes (run by Ana Bailão) to work around what he views as an inefficient federal civil service. The strategy represents a workaround rather than wholesale public service reform. (theglobeandmail.com)
- Bloc Québécois activities across multiple Quebec and federal issues — The Bloc Québécois has been active on several fronts including criticising federal language policy enforcement, supporting Quebec’s secularism law at the Supreme Court, calling for employment insurance reform, and preparing for the Terrebonne by-election where candidate Nathalie Sinclair-Desgagné faces Liberal incumbent Tatiana Auguste. (blocquebecois.org)
- RCMP and CSIS reviewing Vancouver company for alleged Hezbollah ties — Canada’s national security agencies are investigating a Vancouver company that remains active in Canada despite being sanctioned by the United States for alleged ties to Hezbollah. CSIS confirmed that security agencies are ‘looking at this issue and working with U.S.’ counterparts on the matter. (globalnews.ca)
Notes
Notes
Canada reaches NATO 2% defense spending target, announces \$3B for Maritime provinces
March 15–26, 2026
Pierre Poilievre appears on Joe Rogan podcast, sparks debate over misinformation claims
March 15–26, 2026
Air Canada CEO faces backlash for English-only condolences after fatal LaGuardia crash
March 15–25, 2026
Avi Lewis elected NDP federal leader on first ballot, faces immediate division from Prairie wings
March 29, 2026
Liberal MP Michael Ma faces calls for removal after questioning China forced labor expert
March 15–26, 2026
Carney's office clarifies he did raise human rights with Xi Jinping in Beijing meeting
March 15–23, 2026
Canadian Armed Forces members safe after missile intercepted near Israel-Lebanon border
March 15–26, 2026
Other
Brazil
Luiz Inácio Lula da Silva’s approval rating hit 61% this week — the highest in two years — while polls show Flávio Bolsonaro, son of the jailed former president, now leads or ties with Lula in 2026 races.
The collapse is sharpest among young voters, with 72.7% of those aged 16 to 24 disapproving of Lula’s performance. AtlasIntel and Quaest polls both show the race within the margin of error. The son of a convicted politician serving a 27-year sentence has become competitive with Brazil’s three-time president.
Even as his son’s prospects improve, Jair Bolsonaro received house arrest on humanitarian grounds after pneumonia landed him in hospital. Alexandre de Moraes, the Supreme Court justice who has led the legal campaign against Bolsonaro, granted the relief but imposed restrictions on family visits and communications. The health crisis has accelerated succession planning within the opposition camp.
Lula’s own coalition is fracturing. Edinho Silva, president of the Workers’ Party (PT), admitted this week that the Brazilian Democratic Movement (MDB) and Social Democratic Party (PSD) — two centrist parties crucial to governing majorities — will not join Lula’s 2026 alliance. The PT is now focused on regional deals with traditional left-wing partners like the Democratic Labour Party (PDT), a much narrower base than previous campaigns.
Flávio Bolsonaro used a speech at the Conservative Political Action Conference in Washington to call Lula an “antagonist” to Americans and request diplomatic pressure for “free and fair elections.” But the USS Nimitz arrived for joint naval exercises, and military cooperation continues regardless of political friction.
Brazil’s armed forces launched a new drone squadron and training school, developing kamikaze drones and autonomous swarm technology as defence modernisation shifts toward asymmetric warfare. Fernando Haddad left the Finance Ministry to campaign for governor of São Paulo and was replaced by his deputy, Dario Durigan. Mr Durigan is expected to maintain policy continuity. The Supreme Court unanimously capped extra judicial payments at 35% above the constitutional ceiling, potentially saving R$7.3 billion annually.
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- Social security fraud investigation concludes without approving final report — The parliamentary investigation into National Social Security Institute (INSS) fraud ended without approving a final report after the Supreme Federal Court (STF) blocked its extension. The original report sought to indict Lulinha and over 200 others, but was rejected by the government majority. (bbc.com)
- Petrobras stock hits record highs as oil prices surge — Petrobras shares reached historic highs, with the company’s market value hitting R$ 673 billion for the 10th time since the Iran war began. The surge was driven by oil prices rising above $110 per barrel due to Middle East tensions. (g1.globo.com)
- Lula makes controversial comments about Chinese and dogs during factory visit — During a visit to a Chinese automaker factory in Anápolis, President Lula joked that Brazilians spend a lot on dogs and suggested Chinese people don’t have this ‘problem,’ drawing mixed reactions and international media attention. (g1.globo.com)
- Lula maintains support for Bachelet’s UN candidacy after Chile withdraws backing — President Lula reaffirmed Brazil’s support for former Chilean president Michelle Bachelet’s candidacy for UN Secretary-General, even after Chile’s right-wing government withdrew its backing. Lula said Brazil and Mexico would continue supporting her jointly. (g1.globo.com)
- Lula signs Anti-Faction Law with partial vetoes — President Lula signed the Anti-Faction Law with two vetoes, rejecting provisions that would equate penalties between faction members and non-members, and blocking rules on drug fund resource allocation. The law strengthens anti-organised crime measures. (cnnbrasil.com.br)
- Central Bank liquidates Entrepay financial conglomerate amid Master Bank crisis — The Central Bank decreed extrajudicial liquidation of Entrepay Instituição de Pagamento and its subsidiaries due to financial weakness and irregularities. The move comes amid ongoing investigations into financial fraud involving the Master Bank scandal. (seudinheiro.com)
- US Navy conducts Southern Seas 2026 operation with Brazil — The USS Nimitz aircraft carrier and destroyer USS Gridley arrived for joint naval exercises with Brazil and other South American countries as part of Operation Southern Seas 2026. The operation includes port calls and maritime cooperation activities.
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Chile
José Antonio Kast’s approval rating collapsed by 13 points in his first month as president, falling from 47% to 34% after he scrapped fuel subsidies and drove prices up by as much as 54%.
The backlash was swift. Two student groups — the National Confederation of Students of Chile (Confech) and the Association of Students of Chile (Aces) — organized the first major protests of his presidency, bringing 3,500 demonstrators onto Santiago’s streets. Police responded with water cannons and tear gas, arresting 14 people including a 13-year-old. The protesters were marching against both the fuel price increases and education budget cuts, trying to reach the Education Ministry before security forces blocked them.
The protests exposed a contradiction in Mr Kast’s agenda. Even as he campaigned on law and order, his government cut 72bn pesos from the Ministry of Security budget, with 51bn pesos coming from the Carabineros. The cuts will hit vehicle procurement and operational capacity. Opposition deputies criticized the mismatch between his security rhetoric and his spending cuts.
Some institutions stayed above the political fray. The Central Bank maintained its 4.5% interest rate despite pressure to respond to the fuel crisis, warning that oil prices could hit $100 per barrel and push inflation to 4% by mid-year. The bank’s independence constrained Mr Kast’s fiscal options just as his political space narrowed.
Chile’s state copper company Codelco reported record profits of $2.4 billion for 2025. Most of the money — 84% — came from its lithium joint venture with SQM, which contributed $1.78 billion to state coffers. The success validated the state-led resource strategy Mr Kast inherited from his predecessor.
Mr Kast also made his biggest diplomatic break yet, withdrawing Chile’s support for Michelle Bachelet’s candidacy for UN Secretary-General and reversing a decision Gabriel Boric had made in February. The Foreign Ministry cited “fragmented candidacies among Latin American states” as justification, but opposition figures called the move politically motivated and damaging to Chile’s diplomatic reputation.
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- Fuel price increases trigger sharp drop in President Kast’s approval ratings — President José Antonio Kast’s approval ratings plummeted from 47% to 34% following his government’s decision to eliminate fuel subsidies, causing price increases of up to 54%. Multiple polls showed significant public disapproval of the MEPCO policy changes, with protests erupting in Santiago. (bloomberg.com)
- Chile defeats Cape Verde 4-2 in FIFA Series opening match — Chile’s national football team beat Cape Verde 4-2 in their first match of 2026 during the FIFA Series tournament in Auckland, New Zealand. The victory marked Chile’s fourth consecutive win and improved their FIFA ranking, with a follow-up match against New Zealand scheduled. (encancha.cl)
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Mexico
Mexico’s central bank surprised markets by cutting interest rates despite rising inflation, as Claudia Sheinbaum faced fresh pressure from Donald Trump while her security minister became a viral sensation.
Banco de México cut its benchmark rate by 25 basis points to 6.75% in a split decision, with two of five board members voting against. The cut came despite inflation hitting 4.63% in March, its highest since 2024. The peso weakened to 17.90 per dollar. The central bank cited economic weakness and Middle East conflicts as justification, but the decision signals accommodation over price stability.
Ms Sheinbaum faced renewed American pressure. Mr Trump proposed renaming the Gulf of Mexico as the “Gulf of America,” prompting her to defend the historical name while insisting Mexico seeks peace with Washington. Speaking to crowds in Zacatecas, she had them chant “Gulf of Mexico” while saying “we don’t want to fight with the US government, we are partners.” The same week, the Senate approved allowing 35 US military personnel to train Mexican naval forces for World Cup security, showing cooperation continues despite the public sparring.
Omar García Harfuch, the security minister, became a cultural phenomenon. His face now appears on sweet bread called “Harfuchas,” blankets, and other merchandise in what media called “Harfuchmanía.” The viral popularity reflects his high approval ratings and signals early positioning for the 2030 presidential race.
Ms Sheinbaum advanced her social agenda. Nearly 3.5 million women aged 60-64 now receive the Women’s Welfare Pension, providing 3,100 pesos every two months. Congress also eliminated “golden pensions” for former officials of state companies Federal Electricity Commission (CFE) and Pemex, capping them at half the presidential salary despite protests from retirees. The moves continue the administration’s campaign against elite privileges.
The government showed it could act on corruption when exposed. The Foreign Ministry cancelled the authorization of Martín Camarena de Obeso as honorary consul of the Philippines in Guadalajara after he was identified as a partner in a company sanctioned by the US Treasury for alleged links to the Jalisco New Generation Cartel. Meanwhile, Juan Ramón de la Fuente, the foreign minister, led Mexico’s delegation to the CELAC summit in Bogotá, reaffirming humanitarian support for Cuba while insisting this creates no conflict with the United States.
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- Gulf of Mexico oil spill affects Veracruz and Tabasco coasts, cleanup operations underway — A major hydrocarbon spill in the Gulf of Mexico affected over 630 kilometers of coastline in Veracruz and Tabasco. The Naval Secretariat (Semar) and Pemex conducted cleanup operations, collecting hundreds of tons of contaminated materials. Government investigation points to a private vessel as source, not Pemex facilities. (excelsior.com.mx)
- Semar locates missing vessels carrying humanitarian aid to Cuba — Two catamarans carrying humanitarian aid to Cuba that went missing for a week were located by the agency 80 nautical miles northwest of Havana. The nine crew members aboard both vessels arrived safely at a Cuban port with naval escort. (excelsior.com.mx)
- Juan Ramón de la Fuente participates in CELAC summit, reaffirms Mexico’s Cuba support — Juan Ramón de la Fuente, the foreign minister, led Mexico’s participation in the tenth CELAC Summit in Bogotá and the CELAC-Africa High-Level Forum. He held meetings with counterparts from various countries and reaffirmed Mexico’s humanitarian support for Cuba despite US pressure. (mayacomunicacion.com.mx)
- Sheinbaum announces vehicle protection program and presents Women’s Welfare Pension expansion — Claudia Sheinbaum, the president, announced a Heavy Vehicle Protection Program with 2 billion pesos in investment and reported that nearly 3.5 million Mexican women will benefit from the Women’s Welfare Pension program this year, providing 3,100 pesos every two months to women aged 60-64. (novedadesdetabasco.com.mx)
Notes
Notes
Sheinbaum rejects confrontation with US, defends 'Golfo de México' name against Trump
March 28–29, 2026
Omar García Harfuch becomes viral phenomenon with merchandise including conchas and blankets
March 25–29, 2026
Plan B electoral reform approved with PT opposition to revocation of mandate provision
March 24–25, 2026
Gulf of Mexico oil spill affects Veracruz and Tabasco coasts, cleanup operations underway
March 27–29, 2026
Juan Ramón de la Fuente participates in CELAC summit, reaffirms Mexico's Cuba support
March 23, 2026
Senate approves entry of 35 US military personnel for training ahead of 2026 World Cup
March 25, 2026
CFE launches expansion plan with 58 transmission projects and private sector participation
March 24, 2026
Sheinbaum announces vehicle protection program and presents Women's Welfare Pension expansion
March 26–28, 2026
Other