The governor of the Bank of Canada was under scrutiny. For weeks, press reports had tied Mark Carney to a potential run for the country’s Liberal Party, which was looking for a new leader.
Central bankers are supposed to stay away from politics, but Carney had not snuffed out the speculation. One day in late 2012, after another reporter asked him if he was thinking about becoming a politician, he snapped back. “Why not become a circus clown?” he said.
A dozen years later, Carney has finally entered the circus of Canadian politics.
The 59-year-old former Goldman Sachs banker won the Liberal leadership vote in a landslide on Sunday and is set to replace Justin Trudeau as prime minister. He secured the victory by persuading many Liberals, including much of Trudeau’s cabinet, that he’s the best one to steer the country through its biggest crisis in decades — the threats from US President Donald Trump to inflict economic damage to Canada through a trade war.
Carney crushed his rivals in fund-raising and the party establishment lined up behind him, giving his campaign momentum from the start. He’ll become Canada’s 24th prime minister in a matter of days — the realization of a long-held ambition and yet another instance in which seismic global events have provided him with a springboard to power.
“Everything in my life has prepared me for this moment,” Carney said in his victory speech, moments after Liberal Party officials announced the blowout result. Carney secured 86 per cent of the vote, with the other 14 per cent shared by three candidates.
Rising to Stardom
Carney became governor of the Bank of Canada on Feb. 1, 2008. In September of that year, investment bank Lehman Brothers went under, Merrill Lynch teetered on the edge of collapse and the global financial system was in a full-blown crisis. Carney cut interest rates to almost zero and, as head of a Group of Seven central bank, was involved in crafting a series of coordinated measures by central banks to help keep the global economy afloat.
Canada, with its concentrated financial system and more risk-averse approach to bank supervision, got through the crisis without having to bail out its major banks. Carney’s global profile grew, and in 2011 he was made chair of the Financial Stability Board, a body set up by the Group of 20 following the calamity of 2008.
Political power brokers in Canada took notice.
After a disappointing 2011 election in which the Liberals finished in third place for the first time in Canadian history, some party members pushed hard to recruit Carney. He was seen as the only credible contender to a young scion with a famous name who was gearing up a leadership run: Justin Trudeau. Carney weighed the decision, but ultimately declined.
He says it wasn’t only the Liberals trying to pry him out of the central bank. Stephen Harper, then prime minister of a Conservative government, offered him the finance minister role, Carney has said. Harper has not confirmed this, and recently published a letter that accused Carney of embellishing his role in reacting to the 2008 financial crisis.
Instead, Carney departed for the Bank of England — becoming the first non-British person ever in charge at Threadneedle Street and giving him a unique distinction having managed two G-7 central banks. After helping steer the UK economy during the turmoil of Brexit, Carney finished his term in 2020 and accumulated a series of corporate and nonprofit roles, including becoming chair of Brookfield Asset Management Ltd. and Bloomberg Inc.
But politics was always lurking.
Trudeau, who won three straight elections but saw his popularity crumble after inflation surged above 8 per cent in 2022, made multiple attempts to recruit Carney into his government. It blew up in his face in December, when the prime minister attempted a maneuver that would have installed Carney as finance minister and moved Chrystia Freeland into a role managing US relations.
Freeland instead quit — stinging Trudeau with a resignation letter that stunned the entire nation. Trudeau lasted only three more weeks before announcing he would leave.
Freeland had the highest profile of any of Carney’s opponents in the Liberal contest, but she struggled to gain traction. In the end, she received only 8 per cent of the vote. It was a low-key contest — even the televised debates contained few moments of true battle among the candidates.
Now that Carney has won, a much harder test awaits. How will a career in finance and central banking translate to the street fight of Canadian politics during a national election campaign?
“When you look at people who’ve moved from the world of finance into politics and how have they managed, sometimes they come off as stiff and wooden and too much of the technocrat,” said Scott Reid, who was a senior aide to Liberal Prime Minister Paul Martin when Carney was brought into Canada’s finance department in 2004.
It’s hard to see Carney electrifying a crowd during a political rally, Reid said. Even in a Liberal leadership race that was a polite affair, Carney occasionally stumbled, allowing journalists to get under his skin with questions about his corporate interests.
But the most important question at the moment, Reid said, is what kind of prime minister Canadians want as the country faces the prospect of a painful trade war with the US — not to mention the menacing words coming from Washington that threaten Canada’s sovereignty. Carney may be a neophyte to party politics, but he’s hardly new at dealing with an economic hurricane. And the economy and Canadian independence are the things voters are most worried about.
“If timing is everything in politics, maybe now is the right time to be a central bank governor offering yourself as a prime minister,” Reid said, then caught himself with a laugh. “It sounds like a crazy sentence.”
Carney’s campaign declined to make him available for an interview prior to the vote.
An election is due soon, and Carney will be facing off against one of its fiercest brawlers to head a Canadian political party — Pierre Poilievre, the Conservative Party leader.
Poilievre, 45, has been in Parliament for two decades and served in Harper’s cabinet, where he gained a reputation as an uncompromising partisan attacker. He was elected party leader in 2022 and has a penchant for going for the jugular on his political opponents — successfully pinning the blame for inflation and weak economic growth on Trudeau.
Now his focus is trained on Carney’s time in the private sector, and the conflicts of interest that may exist with a businessman in power.
“Mr. Carney could win the Liberal leadership and become prime minister without revealing to Canadians his massive multimillion-dollar foreign holdings,” Poilievre said at a news conference on Friday. Poilievre pledged to pass a law that would force leadership candidates to disclose their investments.
Carney has not said what his assets are worth or where they’re held, but promised to put them in a blind trust once he becomes Canada’s leader.
Poilievre has also slammed Carney over Brookfield Asset Management’s decision to move its head office to New York from Toronto during the time Carney was board chair, noting this is exactly the kind of move Trump wants to see. Brookfield said the move was done to make its shares more attractive to US investors and gain membership in equity indexes such as the S&P 500, and that it didn’t affect any of its operations.
Economists also have doubts about some of Carney’s fiscal plans. His campaign motto was “It’s time to build” and he has proposed using the government’s fiscal heft to help construct millions of new homes, expand conventional and clean energy systems to reduce US dependence and establish new infrastructure, including ports and railways.
He has proposed changing the way the federal government accounts for its more than C$500 billion ($348 billion) budget — separating an operating account, which he says would be balanced within three years, from a capital one, which would not.
Some believe that’s a little too much clever financial engineering from an ex-Goldman banker. “It makes understanding the government’s financial position more difficult because it makes it more opaque to see the overall government’s consolidated position,” said Trevor Tombe, professor at the University of Calgary.
Carney also promised to cut taxes for individuals, but again has provided few details, beyond saying that it would target middle-class households and would offset the loss of a carbon-tax rebate that’s currently in place.
Regardless, Carney has a brand that seems to be resonating with voters. The Liberals have been surging in polls and some surveys suggest Canadians have high confidence in Carney’s ability to deal with the volatile Trump.
Some polls even give the Liberals a lead over the Conservatives — an astonishing shift, given that Poilievre’s party led by more than 20 points just a few months ago.
Andrew Enns of polling firm Leger Marketing said that in his 25 years in the business, he has never seen such a massive swing in public opinion take place so quickly.
But he also cautioned that most Canadians still don’t know Carney well and could change their views on him when he truly has the spotlight on him. Leger’s most recent poll still has the Conservatives ahead.
“Mark Carney’s had an impact, I’m not going to take that away from him, but the bigger change has been this whole Trump environment,” Enns said. “Tariffs have repositioned how Canadians are viewing the Canadian government now.”
It presents a huge challenge for Poilievre, who built his brand over the past two years on hammering Trudeau and his government for incompetence. “The audience is just not as receptive to that now,” Enns said. “It’ll remain to be seen if Mr. Poilievre can find his voice again in a manner that takes this into account.”
It’s for that reason Canadians may be open to a financial technocrat, Reid argued.
“It’s such an improbable notion that a guy would come in from the outside, pick up a party that’s 25 points behind in the polls and shake them by the lapels and carry them to an electoral victory all within the stretch of a handful of months,” Reid said.
“But if these polls are to tell us anything, it’s got to be because we’re moving toward a very unique moment, and therefore the only play is to communicate and demonstrate that you’re the man for that moment. And, you know, so far, so good.”
(Updates throughout to reflect that Carney has won the race.)
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