O! Canada! Michael Blair explains Carney's stunning victory

Michael Blair’s Baron’s Briefing on April 29 could not have been better timed, despite being scheduled quite by chance the day after Canada’s election.

Michael, a Canadian former Reuters journalist and senior business manager in the Americas, treated the Briefing audience to an insider view of how Prime Minister Mark Carney, a political novice, had pulled off an extraordinary turnaround to win one of the country’s most consequential recent elections.

Across the southern border, in Michigan, Donald Trump was claiming his first 100 days in office were the most successful of any U.S. president.

But in Canada, Carney was celebrating a resounding victory for his Liberal Party, which at the beginning of the year was facing electoral annihilation. The extraordinary success was based largely on Canadians’ resentment over Trump’s aggressive trade policy and threats to the sovereignty of his neighbour.

Conservative leader Pierre Poilievre, who was seen as a Trump admirer, went from being the clear favourite to win the election a few months ago, to losing his seat in parliament.

At the start of the year, the Liberals under Justin Trudeau looked doomed to irrelevance, before Trump entered the picture after taking office in January, calling on Canada to become the 51^st US state.  

Carney, a non-politician who had been Governor of the Bank of Canada and then Governor of the Bank of England during Brexit, was selected to lead the Liberal Party only two months before the election, becoming prime minister after the resignation of the deeply unpopular Trudeau. Carney quickly called an early general election for April 28.

Carney “came out swinging”, after his victory, Blair said, and quoted the former central banker as saying: “We are over the shock of the American betrayal, but we should never forget the lessons.”

Carney, who has become one of the most outspoken international critics of Trump, added: ”The system of open global trade anchored by the United States, a system that Canada has relied on since the Second World War, a system that, while not perfect, has helped deliver prosperity for our country for decades, is over. These are tragedies, but it’s also our new reality.”

Michael explained that Carney, with the ideal profile for an economic war with Washington, has already articulated a budget – and indeed a strategy – to cope with the disruption caused by the 25 per cent U.,S tariffs on most of Canada’s exports.

It’s a budget, Blair said, designed to address the problems that plagued the Trudeau government, as well as the challenges that Trump’s policies have added to the mix. He listed the issues that made Trudeau’s government so unpopular:

• Trudeau had allowed immigration to soar, including many illegal migrants. The population of the country rose by about 10 per cent to 51 million during his tenure as prime minister.
• That rise was not accompanied by housing construction, pushing up rents and pricing Canadian citizens out of their homes and into food banks.
• Medical care – a state-run system, free at the point of use and thus so different from the US one – was deeply strained.
• The lack of a pipeline from the oil and gas fields of Alberta to the refineries in eastern Canada left an energy-rich country dependent on imports and on exports of oil to the US, now subject to a 10 per cent tariff.

Carney’s plans would address these issues, Blair argued, starting with building 500,000 new homes and offsetting the trade losses with the United States. “Canada will do well by itself, working with other countries and continents. The U.S. is not a happy place right now,” he added.

Regulation has been another obstacle to prosperity that Carney would address, Blair said. He gave the example that it takes 17 years to get a new mine in operation.

Carney has also promised to end a system under which internal trade is hindered by regulatory differences in each of Canada’s provinces.

The Briefing was followed by lively questioning including a suggestion that Carney’s honeymoon with voters would not last long when reality struck.

Building homes, mines, new oil pipelines and expanding the medical system will all take time while tariffs on U.S. imports would push up inflation. Carney, a novice in politics, has plenty of work to do just coping with the new pressures, let alone solving those that persist. But Blair said he was convinced, like most Canadians, that Carney’s plans, backed by his economic expertise, would weather these storms.

Explaining a Reuters connection to the events in Canada, Blair explained how Chrystia Freeland, a former Financial Times journalist and Reuters editorial executive, may have triggered the election and Trudeau’s replacement when she resigned in December as finance minister. But she trailed far behind Carney as a candidate in the general election, winning only eight percent to his 86 percent.

Blair was confident that she would continue in some capacity when the new government is formed by Carney.

Donald Nordberg is a Chicago native, now a UK citizen living in England. His roles at Reuters (1979-1997) included Financial Editor in London and News Editor, Reuters America. ■