John Ivison: Mark Carney gets hired to tell Liberals they’ve been doing it all wrong

Why is Carney doing it? I think he wants to keep himself in the public eye, in case there's a vacancy at the top of the Liberal party soon

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Published Sep 10, 2024  •  5 minute read

Former central banker and rumoured leadership contender Mark Carney will serve as chair of a Liberal party task force on economic growth, the party announced in a press release on Monday. Photo by Chris Ratcliffe /Bloomberg

 Andrew Scheer was just doing what all sports fans do: booing the opposing player they think might cause them most problems. 

The former Conservative leader showed up in Nanaimo, B.C. where the Liberal caucus is meeting, and commented on the appointment of ex-bank governor Mark Carney as the chair of a special economic advisory committee to Prime Minister Justin Trudeau. 

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Scheer dismissed it as a “smoke and mirrors gimmick.” 

“At the end of the day, Mark ‘Carbon Tax’ Carney loves the same policies that Justin Trudeau has imposed on Canadians. They are the same people — out of touch elites who believe they know better than hard-working Canadians how to spend your money,” he said.

The fact that the Liberals’ new star player once played a similar role for the Conservatives does not count apparently. Not only did Scheer’s former boss, Stephen Harper, appoint Carney as governor of the Bank of Canada but also at one point reportedly offered him the job of minister of finance, according to one well-placed source.

It is understandable why the Conservatives want to define Carney in the public mind in case he formally enters the political arena: it is a tactic that has worked before. 

During the Brexit debate in the U.K., Carney, as the then governor of the Bank of England, warned about the impact of Britain quitting the European Union on exchange rates, trade and inflation. The “Leave” side portrayed him as the personification of the kind of plutocrat who profited from the EU at the expense of the average worker. The success of the effort was exemplified by a BBC Newsnight interview with two elderly ladies in a supermarket cafeteria. “He doesn’t know any more than we do, really, does he?” said one. 

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But it turns out he did: Brexit has been an economic disaster, adversely impacting sterling, trade, inflation, the public finances and per capita GDP, as Carney predicted.

But Scheer is wrong about Trudeau (and by extension, Finance Minister Chrystia Freeland) and Carney being “the same people.” In fact, he has been a quiet critic of government economic policy for years. 

In his 2021 book, Value(s), Carney said spending limits should be set and economies brought back to balance in the medium term, with tests of debt-servicing costs to revenue being used to ensure governments are not seduced by low rates. “Just because something is possible doesn’t make it optimal,” he said. “Simple debt dynamics must be respected. With time, living beyond our means is unsustainable.”

This was at a time when Freeland was warning that “doing too little is more dangerous and potentially more costly than doing too much.”  

When Freeland’s predecessor, Bill Morneau, was dumped as finance minister, Carney was offered his job by Trudeau. It was a very embittered Bill who delivered a speech in Toronto in 2022 in which he said too much time and energy was spent by Trudeau’s government finding ways to redistribute Canada’s wealth, rather than trying to increase the collective prosperity. Lack of competitiveness is “our fundamental problem,” Morneau said. 

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Carney has been hammering on the same themes in his public musings. 

In his own speech in Toronto last April, Carney talked about this being a “hinge moment” in history that could provoke three possible responses: one, “spend, support, subsidies” (a thinly veiled critique of the Trudeau government’s economic policies); two, “demolish, destroy, deny” (an open attack on Pierre Poilievre’s perceived plan); or, three, “it’s time to build” (his preferred option, using public money to catalyze private investment in the energy transition).

“This new era will demand fiscal discipline and a relentless focus on delivery, rather than reflex spending that only treats the symptoms but doesn’t cure the disease,” he said. 

During an appearance at the Senate banking committee earlier this year, Carney all but disavowed the consumer carbon tax, saying “it has served a purpose until now.” 

In a press conference in Nanaimo on Tuesday, he all but disowned the generous subsidies being handed out to global car companies, saying “we can’t win an industrial policy arms race.” 

That’s what makes Carney’s appointment so curious. We are not party to what he told the Liberal caucus in Nanaimo, but his public advice to this point has been a repudiation of the fiscal indiscipline and reflex spending that has been their leitmotif. 

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If Trudeau listens to his advice, his Liberal government is going to start to head in a fundamentally different direction. 

Why is Carney doing it? I think he wants to keep himself in the public eye, in case a vacancy at the top of the Liberal party becomes available. I doubt he is actively trying to ease Trudeau out, but it should be remembered that any leader without followers is simply a man or woman going for a walk. After seeing Carney in action, the caucus may decide of its own volition that he is better for their own job prospects than the incumbent is. 

I also think he genuinely wants to help Canada reach its full potential by focusing on measures to improve long-term productive capacity that are green, job heavy and capital intensive.

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In his Senate appearance, he said that countries that don’t take measures to reduce embedded carbon will see trade access denied to them. In his press conference Tuesday, he said becoming low carbon is a key driver to competitiveness. “We can no longer rely on the world’s rules-based trading system — we have to become an essential trading partner,” he said. 

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Carney believes economic growth has not been sufficiently high on this government’s agenda and that he is uniquely positioned to get the private sector to work to the objectives of the people. 

As part of that, he has been clear that around half of global oil reserves will have to stay in the ground if the world is to reach its carbon reduction goals. 

In his book, he said over the course of his career, he has had a unique “but sometimes frustrating” vantage point. “I could see much but do relatively little,” he said. 

In Nanaimo, Carney was inevitably quizzed about his political ambitions, evading the question in comical fashion. “We need solutions, not slogans, action not indifference,” he said. 

He called himself an “outsider” interested in “doing something, not being something.” 

But he clearly feels the need to be an insider in order to implement his vision of a more competitive, low-carbon Canada. Whether that means being an elected insider, I doubt even he knows yet.

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