So, at long last, Canada will have a new prime minister in Mark Carney. A newbie to politics but a very prominent figure in the world of finance (having been the governor of Bank of Canada during the 2008-09 financial crisis, and governor of the Bank of England for seven years till March 2020 amidst the chaos of Brexit), Carney was overwhelmingly chosen by the Liberal Party recently to replace Justin Trudeau, who stepped down early January. Carney is regarded as a globaliser, a believer in open trade and free markets, but clearly the times have changed quite drastically in recent weeks.
A protectionist gale is sweeping the world, emanating from just across Canada’s border. How Carney brings to bear his skills as an economist and financier to handle the tariff challenge and the diplomatic offensive from Donald Trump-Elon Musk duo will be keenly watched over the next six months or so, before Canada goes to polls. Meanwhile, it is an open secret that the EU and Canada are working together and in reshaping the Western alliance. This could set off a new set of currents in energy and climate policy, which could be of considerable relevance to India.
Trudeau came in with a bang 10 years ago, but went out with a whimper. This happens to many heads of government but in Trudeau’s case it was a series of self-inflicted blows. So keen was he to continue as prime minister that he managed to alienate many countries, most notably India. Thanks to his dependence on the Sikh dominated New Democratic Party vote, he thought nothing of ruining Canada’s relationship with India by accusing it of killing Canadians in Canada. India, of course, denied it all. While it is to be hoped that Carney may turn a new page here, India will come rather low down in Carney’s immediate priorities. Apart from getting a fix on Canada’s tempestuous neighbour, he faces a general election in six months. If the Liberal Party is unable to improve on its 2020 performance — of 153 seats when 170 were needed — he is as likely as Trudeau to depend on the NDP. It is possible that he will be far less accommodating of its blackmail than Trudeau. This is the big uncertainty that now looms large on India-Canada relations.
Contrary to popular perception, these have always been bumpy. Canada has been frosty towards India’s nuclear programme in the past, citing the Nuclear Non-Proliferation Treaty, but a thaw set in after 2002 coinciding with the improvement in Indo-US ties. Trudeau seems to have turned the clock right back. The long and short of the relationship is that Canada needs the Indian market and India needs Canadian investment. Apart from the fact that bilateral goods (over $9 billion) and services trade ($10 billion) is not insignificant, India imports pulses, petroleum and edible oils. The Indian diaspora of about 1.8 million remains a huge factor in the ties. Efforts are afoot from India’s side to improve ties. As to whether Carney will lean on extremist Sikh support, the answer will only be known later this year.
