Mark Carney: From the Bank of England to Prime Minister of Canada
Following his dramatic ascension as Prime Minister of Canada, Mark Carney will surely be tempted to call an election on a platform of taking the fight to Donald Trump. But if he wins, that’s where his problems will start, says Michael Martins
For such a staid and sober place, Canadian politics has taken a radical turn. Canada’s new Prime Minister, Mark Carney, is neither an MP nor a long-term resident, parachuted in over the weekend to succeed the embattled Justin Trudeau. This has been met with cries of shock and horror from the leader of the opposition Conservative Party, Pierre Poilievre, who until recently had been predicted to make a clean sweep at this year’s election.
The reason is pretty simple: President Trump’s trade war with Canada has sent the ailing Trudeau and his Liberal party’s polling numbers skyrocketing. Canadian politicians, witnessing how the lame-duck PM Trudeau’s confrontational approach to Trump has boosted his domestic popularity, are bending over backward to stand up to Trump’s rhetoric. Ontario’s Conservative premier, Doug Ford, for example, has threatened to cut off energy supplies to the United States and imports of American alcohol, as he angles for a top job in a potential Poilievre Cabinet.
PM Carney meanwhile has been presented as no stranger to political and economic crises and a safe pair of hands at a dangerous time, but he would be more rightly characterised as a pragmatic opportunist.
Carney’s political career began as governor of the Bank of Canada during the global financial crisis, where he was widely seen as steadying the ship during the worst of the downturn. That pragmatism prompted an offer from then-Conservative Prime Minister, Stephen Harper, to join the federal government as Finance Minister. Carney turned it down because he thought it was “inappropriate to go from being governor into elected office” – not because it was the wrong political party.
‘The only adult in the room’
Carney had by then seen Harper’s tanking polling numbers and decided to take a job as governor of the Bank of England, where he became a household name in the UK as “the only adult in the room”, following the Brexit vote’s market disruptions and political fallout, as sterling slid while the then-PM David Cameron dramatically resigned.
Towards the end of his tenure as BoE governor, Carney and his team began to brief out that he wanted to become managing director of the IMF, but he was passed over. This led to Carney building out a global portfolio career spanning finance and international organisations, and which has now culminated in him becoming Prime Minister of Canada, even though 93 per cent of Canadians did not know who he was seven months ago.
Canada’s recent dramatic political swerves are matched only by Carney’s new tone, stridently different from the halcyon days of forward guidance, where he lowered interest rates to stimulate economic growth and pumped liquidity into the financial system to stop bank runs.
In his victory speech this weekend, the usually calm and sober technocrat came out swinging, declaring that: “Americans want Canada’s resources, water, land, and country. If they succeed, they will destroy Canadians’ way of life”. For a country that apologises for everything and prides itself on having the world’s longest, unpoliced border with the world’s superpower, this volte face is remarkable.
The former central banker must know that the Canadian economy derives 80 per cent of its growth from the US market, that the US government spends $34 on defence for every $1 Canada spends, and that its armed forces outnumber Canada’s by 20,000-to-1
Nevertheless, for all the hysteria surrounding an American annexation of Canada, in practice, the more bellicose Carney’s rhetoric is about Trump, the closer he is to calling an election. The polls have gone from a yawning lead for Poilievre’s Conservatives, to neck-and-neck. Carney therefore has a clear and strong incentive to lean in to a confrontation with Trump to win the election before immediately trying to ease tensions.
After all, the former central banker must know that the Canadian economy derives 80 per cent of its growth from the US market, that the US government spends $34 on defence for every $1 Canada spends, and that its armed forces outnumber Canada’s by 20,000-to-1.
The real question for PM Carney, if he manages to win, will be how he plans to ease tensions with Trump, which is the exact question he and his team are desperately hoping no one asks.
Michael Martins is founding partner of Overton Advisory, former political specialist at the US Embassy in London and former leadership campaign staffer to Martha Hall Findlay MP, Liberal Party of Canada leadership candidate