(Bloomberg) -- Mark Carney won the race to become Canada’s next prime minister, putting the former central banker in charge of the country just as US President Donald Trump’s administration threatens its economic future.
The ex-Bank of Canada and Bank of England governor won the contest to lead the Liberal Party of Canada with nearly 86% of the vote. The transfer of power from Justin Trudeau to Carney is expected to take place within days, and it’s possible he will call a national election soon after.
Carney, 59, takes the reins at a time when the White House is creating upheaval in the global economy — and with US trading partners — with increasingly chaotic tariff announcements.
In the span of three days in the past week, Trump imposed 25% levies on most Canadian and Mexican goods, then promised a one-month delay on those that comply with the North American trade agreement, then threatened major new tariffs against Canadian lumber and dairy. Howard Lutnick, the US commerce secretary, signaled on Sunday that he expects 25% tariffs on US imports of steel and aluminum to go ahead on March 12.
Canada is heavily dependent on trade with the US, and Trump has expressed a desire to use “economic force” to make Canada the 51st state. His actions have sparked patriotic fury in the northern nation, with consumers boycotting American products and demanding that governments turn their attention to finding new trading partners. Trudeau has said Trump’s threats against Canadian sovereignty should be taken seriously.
“America is not Canada. And Canada never, ever, will be part of America in any way, shape or form,” Carney said in his victory speech on Sunday.
“We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves. So Americans should make no mistake: in trade, as in hockey, Canada will win.”
Carney pledged to keep the government’s retaliatory tariffs on US goods until “the Americans show us respect — and make credible, reliable commitments to free and fair trade.” All proceeds from the levies will be used to protect workers, he said.
He also promised to make key investments to turn Canada’s economy into the strongest in the Group of Seven, including by creating new trade corridors with reliable partners and turning the country into an “energy superpower.”
Crisis Manager
Throughout the leadership race, Carney portrayed himself as an experienced crisis manager who led major central banks at pivotal moments — in Canada, during the global financial crisis, and in the UK, during its tumultuous exit from the European Union. But he is relatively untested as a politician and does not currently hold a seat in Parliament.
Carney, who resigned his posts as chair of Brookfield Asset Management Ltd. and Bloomberg Inc. to run for the leadership, has vowed to find new markets for Canada’s exports and reduce internal trade barriers. He’s pledged to scrap Liberal plans to increase the capital gains tax, eliminate the consumer carbon tax and use the power of the federal balance sheet to invest in major projects.
He also said he would split the federal budget into two — an operating budget that he promises to balance and a capital spending budget that would be allowed to allocate tens of billions of dollars to investments in productivity-boosting infrastructure.
“We can give ourselves far more than Donald Trump can ever take away,” Carney said. “This won’t be business as usual. We will have to do things that we haven’t imagined before, at speeds we didn’t think possible.”
Canada must hold an election by October, but the Liberal Party’s perilous status in Parliament, where it has fewer than 50% of the House of Commons seats, means it’s expected sooner.
Carney has to decide whether to plunge the country into a springtime election — leaving it with a caretaker government for several weeks, during which a trade war may be raging — or attempt to gain support from at least one opposition party to govern for a period of time.
Trudeau’s resignation, Carney’s candidacy and Trump’s threats have propelled the Liberals into a more competitive position in public opinion polls after more than a year of trailing the Conservative Party by a large margin. For weeks, the Conservatives have been running frequent attack ads against Carney.
Conservative Leader Pierre Poilievre has accused Carney of being opaque about his promises and his business interests — calling on him to proactively disclose his financial holdings to reveal any potential conflicts of interest. The Conservatives also took aim at Carney last month when he tried to downplay his involvement in Brookfield’s decision to move its headquarters to New York last year. Carney was still Brookfield’s chair at the time.
Carney took aim at Poilievre in his speech, making reference to the Conservative leader’s 2022 threat to fire Bank of Canada Governor Tiff Macklem, which he hasn’t repeated in recent years. Poilievre would “undermine the Bank of Canada at a time of immense economic insecurity,” Carney said. He also criticized Poilievre’s approach to climate policy.
Carney surged past his rivals in the leadership race — former Finance Minister Chrystia Freeland, ex-government House Leader Karina Gould and businessman Frank Baylis. Freeland was the one who delivered the fatal blow to Trudeau’s political career with a stinging resignation letter in December. Trudeau announced three weeks later that he would leave.
In what may have been his last political speech as prime minister, Trudeau told the crowd of jubilant Liberals gathered in Ottawa to keep their “elbows up” amid the “existential challenge” posed by the US.
“Make no mistake, this is a nation-defining moment,” Trudeau said. “Democracy is not a given. Freedom is not a given. Even Canada is not a given.”
--With assistance from Randy Thanthong-Knight and Paula Sambo.
(Adds quotes from Carney’s speech starting in sixth paragraph.)
