Sizing Up Canada's Next PM
Should market liberals get behind Carney?
Justin Trudeau is resigning and the Liberal Party of Canada is about to announce the person who will take his place. This person is exceedingly likely to be Mark Carney. He used to run the Bank of England and the Bank of Canada before that, during the ‘08 recession. Now he’s pitching himself as the steadiest hand in uncertain times.
But who is this banker? Do we like him? My coauthor has written on Canada’s woes—would Carney fix them?
This is the first of two posts on the Canadian political picture right now, in early 2025. The second will focus on Conservative leader Pierre Poilievre, setting up a direct comparison between the two champions set to face off in May(?)
I believe posts like this accomplish a few things:
They provide a broad look at a candidate’s stances, which aren’t readily consolidated elsewhere, and take a good while to collate.
They calibrate our editorial stance, so you know roughly where we’re at.
and
Given time, they’ll allow for comparisons across political figures using the same (albeit subjective) methodology.
Scorecard
Key Issues
Housing - YIMBY?
[Score: A | Uncertainty: Low]
This is one of the policy areas where Carney has a public plan. He's got his sights on all of the keys, hitting construction productivity, zoning restrictions, red tape, and skilled labour shortages. These are all crucial supply-side areas. Giving tax incentives to first-time homebuyers needlessly stimulates demand in a supply-constrained market, which may counteract some of the aforementioned policies. With that said, this plan is largely candy for YIMBYs.
Red Tape - What moves will he make toward growth?
[Score: B+ | Uncertainty: Medium]
In a 2019 speech, Carney was already pushing the potential for AI to help streamline regulatory compliance, recognizing the economic pain inflicted by compliance costs and the potential of technology in this space. Canadian business investment has dropped precipitously in the last ten years and his plan seems to recognize that. He's promising to "enact federal permitting reform" because "current processes are too complex and slow... delaying essential projects." That comes together to form the best approach in the Liberal Party, even if the specifics are sparse.
Sovereignty - How will he stand up to Trump?
[Score: A- | Uncertainty: Low]
"Canada will not bow down to a bully." Carney's proposed response to Trump's bizarroworld-moves essentially mirrors Trudeau's: retaliatory tariffs, trade diversification, and cultivating a better domestic environment for business. I think this is a key issue for most Canadians, but also perhaps the easiest one to score points on. To his credit, Carney has avoided leaning into more performative ideas, such as boycotts.
Technology - What is Canada’s role in AI?
[Score: A | Uncertainty: High]
Artificial intelligence is now by far the most exciting technology of my lifetime and Carney seems to share much of that optimism. As discussed above, he wants to integrate it inside government, acting on his beliefs. Those worried about mass labour replacement he calls "alarmists", given the long run tendency of productivity gains to create new tasks. Given his grasp of economic history, I would be bullish on his approach here.
During the Liberal leadership debate, he was also the only candidate to emphasize the strategic importance of AI—but I still want to hear more. Maybe, just maybe, we'll develop an AI lab.
Important Issues
Character - Who is he?
[Score: A | Uncertainty: Low]
He's not charismatic nor an amazing orator, but it is clear his background has helped him to develop a muscle for explaining economic ideas to the public. That's going to help a lifelong super-bureaucrat when forced into confrontational debate, but probably won't be enough to get around his lack of French proficiency.
Obviously I rate the curiosity and intelligence of an Oxford economics doctorate-holder, and for someone who has never held elected office, he has spent his time in high-stakes finance and banking: Goldman Sachs, Bank of Canada, Brookfield, and the Bank of England.
Throughout those endeavours, no personal scandals have attached themselves to him. He lied about Brookfield's portfolio being carbon neutral and moved Brookfield's HQ to New York from Toronto. Hell, I'd move to NYC too. If these are the worst things to come out so far, Carney's public character seems largely unimpeachable.
Climate - Are his solutions smart?
[Score: B | Uncertainty: Low]
So, he's giving up on consumer carbon pricing off the bat. This is a big about-face on a proven policy that directly targets the externality we care about. Subsidies for various green things are an inefficient solution, while a carbon border adjustment is a smart way to keep Canadian firms (still subject to industrial carbon pricing) on equal footing with foreign competition. Given the state of climate discourse in Canada, this is probably the best compromise available.
Immigration - Will he foster dynamism?
[Score: B | Uncertainty: Medium]
Population growth is awesome but the political reality—given constraints on housing and healthcare supply—is that unsavoury immigration policy is temporarily necessary. Given this, Carney has said he will cap immigration well below present levels. Smart politics I guess.
Going forward, what matters is a smart approach that fulfills capacity without exceeding it. If his housing policy is effective, there is a chance Carney could preside over the same rates without running into any of the same problems surrounding immigration today. As he said in 2024: “We had much higher levels of foreign workers, students and new Canadians coming in than we could absorb… we didn’t have housing for [them], health care for [them]… we’re letting down the people that we let in, quite frankly.”
Overall, I don't think there's a detailed vision available here, but I tend to trust an economist's instincts not to completely fumble this issue.
Industry - How can government intervene efficiently?
[Score: B- | Uncertainty: High]
The truth is, we just don't know much about his ideas on this front. Currently, billions are going into electric vehicle factories that may or may not even be getting built? But, given it's executed responsibly, it wouldn't hurt to bolster strategic sectors in emerging technology. He's also pitched a reallocation of defense spending as Canada approaches its NATO target to the Canadian defense industry. He talks often about balancing Canada's 'operational budget' and deficit spending on what's productively lucrative in the 'capital budget'. This is promising, but unspecific. As Andrew Coyne writes, "just because you call something an 'investment' doesn't mean it is."
Taxation - If more, why?
[Score: B- | Uncertainty: High]
He's scrapping the capital gains tax increase that went into effect last year and promising an indefinite middle-class tax cut. That tells us... not much. I'm bullish on the former's ability to boost long-run growth (though it should go further) and neutral on the latter without accompanying reductions to spending. From his rhetoric, Carney might be serious about removing barriers to business investment and making our corporate taxes competitive with the US, but it's highly uncertain and there is a lot of room for things to go astray.
Trade - Can he break Canada’s economic balkanization?
[Score: A | Uncertainty: Low]
There is not free trade amongst Canada's provinces. Now, following Poilievre's move, Carney's going in on fixing this fragmented market—potentially the most ambitious economic plank in his platform. He’s calling for a single economy, not thirteen separate ones, and has set targets that could expand GDP by up to 8% ($5,000 per capita). The real test is whether he can muscle the provinces into compliance. The last Liberal government tried a light-touch approach, negotiating the 2017 Canada Free Trade Agreement. That has achieved little. Carney is signaling he’s prepared to use federal powers if necessary.
Relevant Issues
China - Support for Taiwan?
[Score: B | Uncertainty: Low]
He'll probably follow the Western consensus... if there is such a thing these days. As an outsider from parliamentary politics, he'll avoid any aftershocks from the 2021 foreign interference investigations. There's no policy released here, but also not much room to maneuver.
Energy - What is his theory of the case?
[Score: B+ | Uncertainty: Medium]
Carney wants Canada to be a "clean energy superpower", but that doesn’t mean he’s anti-oil. He’s pushing for massive investments in nuclear, hydro, wind, hydrogen, and battery storage, while also supporting carbon capture to keep Alberta’s energy industry viable going forward. He’s calling for a two-year project review timeline for major infrastructure, which could streamline both renewables and carbon capture investments. In all it seems sensible.
Healthcare - Will he reform licensing?
[Score: B+ | Uncertainty: Medium]
He’s proposing a mutual recognition framework for healthcare credentials, cutting through a byzantine patchwork of provincial rules that prevent doctors and nurses from moving freely. Given the scale of shortages, this is an obvious fix that should have happened years ago. Still, it should be paired with increased intake at medical schools, accelerated programs, and broadened credential transfer pathways for nurses and doctors who have immigrated to Canada and are now driving Uber because the state doesn't recognize that.
EDIT: I think I scored this too nicely. It’s a great policy, and I think Carney has the right temperament to avoid bloating the system further—but it is a seriously bloated system that needs deep structural reforms to be competitive with other OECD nations. I’ll lower this to a B+ from an A.
NATO - When is Canada going to hit 2%?
[Score: B | Uncertainty: Medium]
2% by 2030 is the plan, paired with Arctic fortification. I suspect an increasingly volatile world and seriously diminished US relations will force that timeline to get moved up, but we will see what the future holds.
Ukraine - Will strong support continue?
[Score: A | Uncertainty: Low]
Carney is fully aligned with Canada’s existing pro-Ukraine policy, with no signs of wavering. He backs continued military aid, economic assistance, and diplomatic pressure on Russia. It looks like funding a drive into Moscow is off the table at this point, but Canada can join the Euros in grinding down Russia's position and work towards a favourable peace deal that puts an end to the empire's landgrab.
Peripheral Issues
Education - Retooling our human capital?
[Score: B+ | Uncertainty: Medium]
Based on my research, he sees workforce training as an economic necessity, with AI, skilled trades, and STEM at the core of his views. His focus isn’t on overhauling the university system but on aligning education with labor market demand—meaning more vocational training, apprenticeships, and AI-spurred "quaternary education" that reskills the obsolete. It's thoughtful, and could help address the fact we're overeducated. EDIT: Maybe the absence of policy here is part of a deliberate effort amongst our politicians to distance themselves from the academy. I drew upon his past Bank of England speeches for this section. Paul Wells on this.
Media - Does he have solutions to brainrot?
[Score: D | Uncertainty: High]
Our attention is shot and a vast sum of human flourishing is being sucked into the digital void. Given I take voices like Haidt pretty seriously, it would be nice to have evidence our politicians are thinking about these problems. Not so with Carney.
Norms - Is he an institutionalist?
[Score: A+ | Uncertainty: Low]
Carney is the closest thing to a Platonic ideal of an institutionalist.
The Upshot
When we weigh the relative importance of issues, Mark Carney gets a strong B+ grade overall, scoring 3.4/4.3. He’s strong on housing, technology, character, and trade, with unusually high marks for a Liberal on red tape and energy. There remains a fair amount of uncertainty, with enough up in the air to raise or lower him by a whole letter grade. Of particular interest will be his immigration, taxation, and industrial policy plans, when those eventually crystallize.
(04/09 edit - Carney falls to 3.4/4.3 from 3.43, still a +/- 1 uncertainty interval)
Next time we’ll see how Pierre Poilievre measures up. I will also do my best to keep this post updated if we get major news from the Carney camp. Cheers.
Carney looks pretty enticing to me. Excited for part 2!
L post, Freedland gonna be the leader 100 percent. Also the author sniffs glue