Will Canada suffer through even worse federal policy than it did with Justin Trudeau over the past ten years?
I n Canada’s federal election, the Liberal Party — now led by Mark Carney — was reelected a fourth consecutive time. It is a significant recovery from just four months ago, when Justin Trudeau was leader and the Liberals were trailing far behind in the polls. Nevertheless, at least some Conservatives are somewhat relieved by the result: while the Liberals won the most seats and will form a government, they did not — as the final preelection polls suggested was probable — win a majority of seats in the Canadian Parliament, falling three seats shy. With a minority government, the Liberals must rely on support from one of the other parties to pass legislation (if not the Conservatives, then the socialist New Democratic Party or the Bloc Québécois), an arrangement that usually does not last a full four-year term. Canadians will likely head back to the polls in a year or two.
To tackle the first obvious question: how, after three terms of producing miserable outcomes and being deeply unpopular until just four months ago, did the Liberals manage to win a fourth term? There were three main factors. First, Justin Trudeau announced his resignation in January, immediately causing Liberal popularity to shoot upwards. Second, tariffs and 51st-state talk by Donald Trump created a surge of patriotism in Canada and sympathy for the incumbent government (a phenomenon not limited to Canada). Third, although Carney was a senior adviser to Trudeau for years and a key member of his policy circle, he convinced enough Canadians that he was enough of an outsider.
While Carney and Trudeau both rode into the prime minister’s office through their celebrity status, rather than good public policy ideas, their sources of celebrity were different. Trudeau’s was his last name; Carney’s was his résumé. His former roles as governor of the Bank of Canada and the Bank of England dazzled many voters, particularly older Canadians who are most likely to vote. That he exaggerated his achievements in those roles seems to have been of little consequence. Carney was also helped by the political incompetence of the New Democratic Party, which had propped up the Trudeau government over the past four years, and whose vote utterly collapsed as its supporters defected in large numbers to the Liberals in a two-horse race against the Conservatives.
The next question: now that Carney has a fresh mandate, what can be expected through the next Liberal term? For one, taxpayers will be paying for even more government spending than they already do. According to Carney’s election platform, he plans to double down on Trudeau’s massive increase in government spending. Taking Trudeau’s last fiscal projections, tabled last fall, Carney’s platform proposed $130 billion in fiscal measures (most of it increased program spending, with the rest in the form of small tax cuts) over the next four years. These measures include significant new or increased funding for industrial policy and corporate welfare, the environment, public broadcasting, gender and equity initiatives, postsecondary education, and sundry social programs. The projected result is a $225 billion increase in the federal debt in four years.
Next, the Trudeau government’s regulatory assault on the oil and gas sector will carry on unabated under Carney. While Carney publicly mused about moving away from Trudeau’s emissions cap — in effect a production cap — for these industries, in Alberta (the heart of Canada’s oil sector) in March, he affirmed that the cap would remain. A report from the independent Parliamentary Budget Officer estimates that the production cap will cut national GDP by $20.5 billion and reduce national employment by more than 50,000 jobs by 2032 — which would be directly contrary to Carney’s promises of increased economic growth after a decade of anemic growth under Trudeau.
Unfortunately, although Carney set the carbon tax payable by consumers (such as at the gas pump) to zero dollars before the election, because of enormous public backlash, he preserved the industrial carbon tax, under which large emitters must pay tax on emissions above government-set targets, and even insisted that “a form of price on carbon” will be “a requirement” for Canada to diversify its international trade. He also promised to preserve the anti-pipeline Impact Assessment Act, whose vague criteria create significantly regulatory uncertainty and delays in project approvals, as well as Trudeau’s phased-in ban on the sale of conventionally powered vehicles by 2035.
That Carney is keeping the worst of Trudeau’s environmental policies cannot be a surprise, and there is likely much worse to come. While he successfully hid his climate radicalism during the campaign, Carney has been a prime mover behind efforts to decarbonize the world’s economies through pressure on the financial sector — rather than through the usual democratic process — essentially by persuading financial institutions to reduce their financing to CO2-intensive industries, something that would have a major impact on critical sectors of the Canadian economy. “Carney is a climate zealot,” as economist Ross McKitrick describes, who “lobbied to defund and drive out of existence Canada’s oil and gas companies, steel companies, car companies and any other sector dependent on fossil fuels. He’s done this through the Glasgow Financial Alliance for Net Zero (GFANZ), which he founded in 2021.” (While Carney is all in on net zero, much of the private sector is now backing off, with six large U.S. banks and Canada’s big six banks all quitting GFANZ earlier this year.)
Indeed, in the past five years, Carney has been boosting Greta Thunberg, including in his 2021 book Value(s): Building a Better World for All. A lengthy review of that book, written by Peter Foster in the National Post, begins thus:
Mark Carney, former governor both of the Bank of Canada and the Bank of England, claims that western society is morally rotten, and that it has been corrupted by capitalism, which has brought about a “climate emergency” that threatens life on earth. This, he claims, requires rigid controls on personal freedom, industry and corporate funding.
Foster continues:
Despite his thorough castigation of market society, Carney somehow also believes this “corroded” society is clamouring to make great personal sacrifices for draconian climate actions and the UN’s Sustainable Development Goals.
Carney has been a prime pusher of “net-zero,” the notion that climate-related human emissions must be entirely eradicated, buried or offset by 2050 if the world is to avoid climate Armageddon. He claims that net-zero is “highly valued by society.” In reality, the vast mass of people have no clue what it entails; when Carney talks about this version of “society,” he is talking about a small, radical element of it.
Foster’s essay is worth reading in full to understand Carney’s vision.
Finally, in addition to economic and environmental policies no better than Trudeau’s, Canadians can expect Carney’s government to be similarly bad on foreign affairs. While he might prefer not to label Israel’s war on Hamas a “genocide” himself, Carney has reacted with remarkable indifference to the term’s use by the New Democratic Party, by protesters, and even by one of his own party’s candidates. He has also pledged to continue Canada’s federal funding for U.N. Relief and Works Agency, despite its ties to Hamas and the October 7 terrorist attacks. And while his predecessor once said he admired China’s dictatorship, Carney too has shown a soft spot for the Chinese Communist Party.
Could Canada suffer through even worse federal policy than it did over the past ten years? With Mark Carney, it seems very possible.