How We’ll Know if Carney Is the Real Deal

It is tempting to think that Mark Carney is something of a political superman.

In meteoric fashion, and without any political experience, he won the leadership of the Liberal party in a landslide.

Then, on a very short runway, he ran a successful national campaign that raised his moribund party from the dead. It was the equivalent of hitting a home run in his first at-bat in the bigs.

Overcoming the animus against Justin Trudeau, which seemed impossible only a few months before, Carney won an election that was supposed to send the Liberals the way of the passenger pigeon.

The global banker and financial whiz kid was suddenly prime minister. And all that without a shred of parliamentary experience or a political history within the Liberal party.

Carney even got King Charles to come to Canada to read the government’s looming speech from the throne. Not bad for a kid from Fort Smith in the Northwest Territories.

But can Superman scale the tall building of actually governing — with all its problems and pitfalls both foreseen and unexpected?

At the best of times, that is easier said than done. But Carney is taking control at a moment when Canada is facing an existential crisis on both the political and economic fronts.

Can he deliver on what he told Canadians during the election? Or will he morph into just another politician who overpromised his way into office only to discover that it is much harder to change things than it seemed from the outside looking in? Running a central bank, as complex as that is, happens to be a world away from running a country.

There are five files to watch that will determine whether Mark Carney is a political superhero, or just another politician with feet of clay:

1. Carney’s promise to transform Canada into a single economy rather than 10 by July 1.
2. The pending negotiations with Donald Trump on a new trade and security agreement with a United States flirting with fascism.
3. Carney’s pledge to turn Canada into an energy superpower by developing both conventional and alternative energy sources.
4. Can Carney deliver a credible plan to pay for the estimated $130 billion in new measures by his government, including his pledge to substantially cut the government’s operating budget?
5. Can Carney win over dissatisfied political customers like Alberta Premier Danielle Smith? Can he persuade this sister of secession that Canada can and will work for all regions of the country, including the disgruntled West?

Gauging Carney’s chances

Beginning with Carney’s pledge to create one Canadian economy by doing away with interprovincial trade barriers, it is reasonably safe to assume he can pull this one off.

A lot of the negotiations have already taken place, which is probably why Carney has publicly stated that his one-economy Canada will be in place by Canada Day.

That said, politics is the ultimate game of three-dimensional chess, where anything can happen. It would be a blow to the new PM’s credibility if any province balked at the 11th hour and didn’t sign on to a one-economy Canada by Carney’s self-imposed deadline. Bottom line? This file looks eminently doable, but there are no slam dunks in politics.

The negotiations with Donald Trump are an entirely different matter.

There is little chance they will work out well. How could they when the tariff sheriff has repeatedly said he wants to destroy Canada’s economy on the road to making this country the 51st U.S. state?

Just before his first meeting with Carney in Washington, Trump was asked if there was anything Canada’s PM could say that would make the president drop his ruinous tariffs on Canadian exports. His one-word answer was a blunt “No.”

Trump has bet the farm of his presidency on tariffs. His game plan has been calculated chaos, making real negotiations virtually impossible. Even when he makes a deal, there is no guarantee that the Orange One won’t walk away from it when it no longer suits his agenda.

Trump imposes, drops, changes and pauses tariffs at his whim. In Canada’s case, he also threatens new ones on everything from B.C. lumber to pharmaceuticals.

There is method to his narcissistic madness. Trump starts with a ridiculous tariff number and then works back to a smaller one. Case in point: Trump’s 145 per cent reciprocal tariff on Beijing dropped to 30 per cent. Much lower, but still very high. The art of the steal.

It is virtually certain that Trump will not drop the tariffs imposed on Canada. The best Carney can hope for is a reduction. There is currently a 25 per cent tariff on a variety of Canadian exports, including steel, aluminum and automobiles.

In keeping with his tactic of continually moving the goalposts, Trump says he is “flexible” on reducing tariffs. He is also open to “carve-outs” for certain products. To a degree that is true.

In his recently announced trade deal with the United Kingdom, Trump in fact reduced or removed tariffs on steel and aluminum.

It would be a big success for Prime Minister Carney if he could replicate something like the deal the United Kingdom worked out with Trump. If Trump were to drop or reduce tariffs on Canadian steel and aluminum, it could potentially safeguard thousands of jobs in this country. But it is not at all certain that Trump would be willing to do that without exacting a heavy price. Exactly what that is no one knows.

What is certain is the key 25 per cent tariff on Canadian-made automobiles going into the United States will likely stand, though it might be slightly reduced. Trump has taken direct aim at Canada’s auto industry, promising Michigan auto workers he will bring Canadian production back to Detroit. He plans to do that by making it “uneconomic” to produce those cars in Windsor and Oshawa.

There is historical irony in this. Trump’s tariffs now threaten the survival of Ontario’s auto industry. But back in the day it was tariffs that helped to create the very industry Trump is now trying to dismantle.

“In 1904, Henry Ford crossed the Detroit River and formed a partnership with a wagon works maker in Windsor to establish the Ford Motor Company of Canada. It was intended to avoid Canadian tariffs on U.S. autos and to export to other countries in the British Empire,” the New York Times reports.

It is doubtful that Mark Carney can come away from his negotiations with Trump with a win for Canada. The size of the loss is what’s on the table. The one thing Carney can’t afford to do is to agree to a bad deal. Canadians will be with him for standing up to the U.S. president but passionately against him if he were to bow down.

As for Carney’s promise to make Canada an energy superpower, there is reason to believe the PM can do this.

Unlike former prime minister Justin Trudeau, who was often adamant on environmental issues, Carney has said loudly and clearly that he is above all else a pragmatist. If something isn’t working, he is prepared to reverse the party line. That is exactly what he did on the Trudeau government’s deeply unpopular carbon tax.

If Carney really intends to make Canada an energy superpower, there is no escaping a hard political fact. The new PM will have to walk away from Bill C-69. The Impact Assessment Act requires assessments for environmental, health, social and economic impacts and the rights of Indigenous people before a major resource project can get off the ground. Critics have nicknamed it the “No More Pipelines Act.” Canada can’t be an energy superpower unless conventional energy resources are significantly expanded.

But there are consequences if Carney turns his back on Bill C-69 as he did on the carbon tax.

A lot of Liberals in his cabinet and caucus endorsed that legislation in the Trudeau government. Former environment minister Steven Guilbeault has already raised questions about building new pipelines, and he isn’t the only one.

Quebec has never been keen on an east-west pipeline, which is the most likely project Carney will eventually back. Quebec’s reflexive opposition eased somewhat after President Trump’s frontal assault on Canadian sovereignty and the economy. But there is still no guarantee that Premier François Legault will sign on.

And then there is the Indigenous issue at stake on this file. Unlike Pierre Poilievre, who wants to quick-march energy projects through the regulatory system, Carney has pledged that he will consult with all stakeholders before greenlighting any major project. And that means he might well run up against First Nations’ objections to a pipeline crossing their territories.

Bottom line on Carney’s energy superpower promise? He can probably do it, but not quickly and not without a political price.

And what about Carney’s spending plans? Here, the political climb is steep. Convincing Canadians that major new spending by Ottawa can be taken care of by other cost-saving measures is far from stating a proven fact.

With $130 billion in new spending on the agenda, Carney has essentially announced that Canada’s deficit will grow. Not the best of messages. Canada already has the highest household debt to disposable income ratio in the G7, and a projected debt to GDP ratio of 112.54 per cent in 2025.

Carney’s pitch on the campaign trail was that you can’t cut your way to prosperity, the way Poilievre promised. Instead, he claimed, you must invest. That is just another way of saying more spending — or, as Carney likes to put it, “investing” and “building.”

Carney has attempted to soften the blow of new spending by promising to cut the operating budget of government. He pointed out during the recent campaign that for years, while the economy was growing by two per cent, government’s operating budget was ballooning by nine per cent.

It remains to be seen whether tightening government’s belt can materially reduce the impact of new spending. But proceeding without a budget as Parliament reconvenes will not help Carney to lessen fears of increased government deficits.

Although he has credibly argued that there is no point in bringing out a rushed budget before the fall, the Opposition also has a credible argument. What’s wrong with bringing in an interim budget that can be amended according to how the chips fall with Trump?

The final and arguably most important file determining Carney’s success as a rookie PM is whether he can unify the country in very uncertain times.

For starters, the PM must persuade Canadians that his central premise in reinventing Canada’s economy is true.

Is it true that Canadians can give themselves more than Donald Trump can take away from them? Is it true that new and trustworthy international partners can replace a country to which Canada has traditionally sent 80 per cent of its exports?

Even if Carney can do that, he faces another massive question. Regardless of his degree of success with new economic alliances, what does he do about unhappiness within Confederation? What does he do about the disaffected regions of the country that are not happy with the status quo?

In other words, what does he do about Alberta Premier Danielle Smith? Smith continues to express deep unhappiness about her province’s status in the country. So much so that her government recently proposed legislation making it easier to hold a referendum in Alberta on whether or not to stay in Canada.

Carney has no choice but to meet the West’s sense of aggrievement with a new approach. But the question is how new? It is highly unlikely the PM can agree to Alberta’s demand that it receive equalization payments like Ontario, even though Alberta is a net contributor to federal coffers. The point about Canada’s complex equalization policy is not to reward provinces with high fiscal capacity; rather, it is to level out the system so that all provinces have the same advantages.

That said, Carney cannot expect Alberta to accept mere rhetoric rather than real change from his government.

And that means only one thing: getting Alberta’s fossil fuel resources to the world at significantly increased volumes. Ottawa can facilitate or frustrate that effort. And only by making the first choice can Carney enhance national unity. Pipelines rather than environmental purity will be the name of the game.

The five files mentioned above are critical, but clearly just part of the story. There are many ways for a new leader to founder — from a recession to a postal strike or other unforeseen events.

It’s hard to be a political superman in Canada. The only thing certain in politics is uncertainty.