Canada’s new leader is a central banker with a liberal capitalist ethos who may fight Trump’s trade war, but will certainly impose the costs of it on the working class, argues John Clarke 

The Liberal Party of Canada has now replaced the highly unpopular Justin Trudeau with someone in which it places great hopes – for now. Mark Carney is a seasoned central banker, who was governor of the both the Bank of Canada and the Bank of England. He is also a veritable apostle of the notion that capitalism can have a human face. Now he heads the Liberal Party and, as such, will step into the role of prime minister at a very challenging point in time. 

There was never any real doubt that Carney would emerge from the leadership race as the victor. He won overwhelmingly on the first ballot, beating his closest rival, former deputy PM Chrystia Freeland, with 131,674 votes compared to the mere 11,134 that she managed to drum up. 

One of Carney’s many supporters inside the Liberal establishment, cabinet minister François-Philippe Champagne, captured the prevailing message when he suggested that people ‘know that he’s a very competent person … and they want him to use his talent to face the challenge that we have at this moment.’ He also added rather grandly that ‘we’re going to rebuild this country like never before.’ 

Challenges ahead 

Carney will be sworn in as prime minister within a few days and there is already strong speculation that he will call a general election with little delay so as to maximise the advantages that flow from the fragile sense of optimism that his victory has generated. Polls are indeed showing widespread support for the holding of an election because it is widely accepted that a government with a clear mandate is needed to best respond to the rise of US protectionism under Donald Trump. 

After a decade in power, the Liberals had seemed doomed to a massive electoral defeat. As I noted in an earlier article for Counterfire, there was a serious possibility that the next election might see them lose their official party status in the House of Commons. The sudden threat of a trade war with the US, however, has completely changed the political landscape. With the Conservative Party under the leadership of hard-right Pierre Poilievre seen as too ideologically close to Trump, the polls are now indicating a very close race indeed. 

In this situation, Carney is looking to promote himself as both a patriotic champion and a defender of ordinary people in the face of Trump’s trade measures and their devastating impacts. At the end of January, while campaigning for the Liberal leadership, Carney told the BBC that ‘President Trump probably thinks Canada will cave in but we are going to stand up to a bully, we’re not going to back down. We’re united and we will retaliate.’ 

Carney promotes this message of Canadian nationalism with some flourish but he is considerably more subdued when it comes to promises to protect the interests of working-class people. In line with his longstanding commitment to the idea that capitalism is the ideal system provided it avoids excesses, he is promoting himself as the voice of moderation but certainly not as any advocate of radical change. As The Breach put it, ‘Carney is offering Canada a centrist agenda par excellence—tailored, though, to fit the anti-Trump, nationalist moment. That means deep love for the free market, coupled with a grudging nod or two towards the welfare state.’ 

Carney’s promises of a moderate and sensible approach run up against the harsh reality that a trade war with the US will soon put an end to any notion of common interests between workers and capitalists. Trump’s tariffs and Canadian countermeasures will mean major job losses and the driving up of the cost of consumer goods. 

As efforts are made to seek out new export markets and reduce the reliance on trade with the US, the need for ‘competitiveness’ will drive demands for concessions by workers and further the rationalisation of workforces. Intensified measures of austerity can be expected that will undermine an already weakened social infrastructure. It will become abundantly clear that we are not all in this together and that Mark Carney is no impartial steward of the common good. As the trade war goes over to a class war, the Liberals, every bit as much as the Conservatives, will clearly reveal what side they’re on. 

Trade war 

As Carney prepares to take over from the newly discarded Justin Trudeau, Trump’s trade war and the Canadian retaliatory measures that come with it are now underway.  Amid an orchestrated mood of patriotism, the contest is gaining momentum. On 4 March, Trump imposed a 25% tariff on Canadian goods, with a 10% charge on oil products. The Canadian government immediately responded with tariffs on $30 billion worth of US goods, with another $125 billion in US exports to be targeted within 21 days. 

The Ontario provincial government has taken action on its own by imposing a 25% price hike on the electricity it supplies to Minnesota, New York and Michigan. In taking this step, Ontario premier Doug Ford declared that, ‘I will not hesitate to increase this charge. If the United States escalates, I will not hesitate to shut the electricity off completely.’ 

The uncertainty and tension of the present situation is greatly compounded by the erratic conduct of the Trump administration. The Ontario premier had just met with US officials and agreed to suspend the 25% charge when Trump announced that he was increasing the tariff on Canadian aluminium and steel products from 25% to 50%. With more Canadian countermeasures being readied, it now appears that this tariff increase has been withdrawn. 

Trump has also introduced a belligerent quality into the situation by augmenting his trade war with calls for Canada to become the 51^st US state. He raised this again when he announced the tariff increase on aluminium and steel and his Homeland security chief Kristi Noem had already fuelled this with a stunt designed to raise tensions. 

On 30 January, she entered a public library that straddles the border between the US state of Vermont and Quebec that people from both sides are allowed to use without passing through border control. Accompanied by a ‘whole entourage’ of U.S. Border Patrol and customs officials, she called out ‘USA number one’ before crossing the line of tape that marks the border and proclaiming the need for Canada to be incorporated into the US. Such conduct and the inflated rhetoric that accompanies it are making it relatively easy for Canadian political leaders to appeal to patriotic sentiment and a mythical ‘national interest’. 

The ‘America First’ attempt to redefine the US role in terms of immediate self-interest, without regard for previous notions of world leadership and a ‘rules-based order,’ has huge international implications. For Canada, with its massive trading relationship with the US, the changed situation is particularly momentous. 

Canadian capitalism must now function under conditions in which the dominant economic power to the south, which is also its principal trading partner, has made a major turn toward protectionism. The response of Canadian capitalists and politicians will be to try to preserve profitability by imposing the burden onto workers and hard-pressed communities.  

The Liberal Party of Canada is generally more moderate than its Conservative rival but, at decisive points, it can be just as ruthless as its opponent. Mark Carney takes over as prime minister as the trade war heats up. For all his fuzzy notions of capitalism with a heart and his talk of a patriotic alliance, he will be well-suited to the task of defending the interests of the capitalist class at the expense of working-class people. 

As the social and economic crisis unleashed by the trade war plays out and, as workers and communities press their demands and fight back, the political nature and the class loyalties of a Liberal government headed by Mark Carney will become abundantly clear.