Nowhere has Donald Trump’s return as US president shaken up domestic politics quite as much as in Canada. It is remarkable enough that Mark Carney, a former central banker with no experience in politics or parliamentary seat, has been catapulted into the prime minister’s job with at least a fighting chance of winning an election that had seemed lost to his Liberal party. More remarkable still is that a Canadian leader should be faced with such a moment of peril for the country’s economy and sovereignty, after Trump’s tariff threats and talk of turning Canada into America’s 51st state. “The Americans want our resources, our water, our land, our country,” he said in his acceptance speech. “Canada never, ever, will be part of America in any way, shape or form. ”
Canada’s political landscape has been redrawn in the two months since Justin Trudeau stood down in the face of unhappiness over the Liberals’ handling of immigration, inflation and housing costs. Those domestic concerns have been eclipsed by Trump’s swingeing on-again, off-again tariffs and annexation talk — which many Canadians are taking very seriously. For more than a year, the opposition Conservative party and its Trump-inspired leader Pierre Poilievre had led Trudeau’s Liberals by up to 20 points or more. But the dangers the US president poses to Canada have revitalised the centre-left party, cutting the Conservative lead over a Carney-led Liberal party to 8 points.
The Liberals’ lack of a parliamentary majority means Carney will almost certainly call an early election, and political wisdom suggests it makes sense for him to try to build on his party’s momentum. It is in the country’s best interest, too, to rapidly choose a new government with a firm mandate. An election that had until recently been expected to cement a Canadian swing — as in many other western democracies — to the populist right is now set to hinge on which of the leading candidates voters trust most to stand up to Trump.
Some Canadians will conclude that Poilievre, who has espoused a Trump-like faith in cutting taxes and replacing “woke” excesses with “common sense politics”, is best placed to deal with the US president. Carney, by contrast, a Harvard- and Oxford-educated central banker and green investment advocate, seems to be everything Trump dislikes. Yet Carney’s experience of crisis management, as head of Canada’s central bank during the 2008 financial crisis and Britain’s during Brexit, gives him some credibility in handling a trade war that threatens to push his country into a deep recession.
His task is to convince Canadian voters he is as skilled a politician as he is a technocrat — and devise twin strategies to win an election and to deal with the US president. Carney has shown a readiness to heed disaffected Liberal voters by pledging to ditch Trudeau’s widely-criticised carbon tax, replacing it with an industrial pricing system, and reverse a capital gains tax increase.
The new Canadian prime minister has given less sense of his strategy for dealing with Trump, suggesting it would be wrong to do so while Trudeau was still handling negotiations. But even though Washington partially backtracked on tariffs imposed on Canada last week, Trudeau is right to have vowed to maintain retaliatory tariffs on about C$30bn ($21bn) of US goods. Robustness in standing up to the US president, while at the same time offering concessions on issues that matter to him, such as border security and drugs smuggling, seems to offer the best route to success.
Such negotiating skills are different from those required of a central banker, even if Carney has shown some political acumen in his campaign. He has helped his party to achieve what is already an unlikely turnaround. But his toughest political tests still lie ahead.