The Liberal Party’s Mark Carney creation of a ‘patriotic alliance’ against Trump’s tariffs means attacks on workers’ rights and protections, explains John Clarke 

A Canadian federal election is now unfolding in the midst of a Trump-initiated trade war that has created both economic instability and political uncertainty. It would be an exaggeration to say that the outcome on election day at the end of April is assured but Mark Carney and the Liberal Party are well-positioned in the race and are most likely to form the next government. 

On 30 March, the CBC reported that the ‘Liberals would have a three-in-four chance of winning a majority government if an election were held today and a nine-in-10 chance of winning the most seats.’ The hard-right Conservatives, under the leadership of Pierre Poilievre, had until recently seemed to be virtually assured of victory but their ideological affinity with Trump has hurt them badly. The social-democratic NDP, having failed to create any viable left alternative to the Liberals, faces a dismal outcome and even risks the loss of official party status. 

Trade crisis dominates 

Unquestionably, the trade crisis dominates this election. Indeed, it was called because the newly installed Carney, having replaced the discredited Justin Trudeau as Liberal leader, insisted that a snap election was necessary to secure a strong mandate at this troubled time. The devastating impacts of the trade war with Canada’s largest trading partner will certainly create a major national upheaval and Carney has come forward as Canadian capitalism’s aspiring saviour. 

Carney’s strategy is to present himself as the head of a patriotic alliance that will defend the ‘national interest’ in the face of the Trump threat. After he won the leadership race, he declared that ‘we didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves, so the Americans, they should make no mistake: In trade, as in hockey, Canada will win.’ 

There is no denying that, when it comes to managing a capitalist economy at a challenging time, Carney brings a considerable body of experience to the task. He spent ‘over a decade in the London, Tokyo, New York and Toronto offices of Goldman Sachs’ before joining the Bank of Canada and attaining the role of governor. He ran the Bank of England from 2013 to 2020 before taking on the role of United Nations special envoy on climate action and finance.  

Carney is strongly associated with the perspective that capitalism must have a human face or wear a convincing mask, in order to survive. When he was governor of the Bank of England, he gave a speech before the Bank of International Settlements in which he stated that ‘my core point is that, just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.’ If Carney continues in the role of prime minister after 28 April, it is likely that the compassionate side of capitalism will be in short supply but, at the same time, he will doubtless put his progressive credentials to good use, as he seeks to contain opposition and impose the burden of the crisis on the working class. 

With an election underway, the Liberals don’t want to undermine the illusion they are crafting of a ‘Team Canada’ that will weather the trade storm in a way that benefits everyone. However, the reality is that Trump’s tariffs and Canadian retaliatory measures will mean both economic hardship and a threat to profitability. A government led by Mark Carney will shed a few tears and offer some gestures in response to the hardship but it will focus on preserving and restoring profits as its key task. There are already signs of how this will unfold. 

Various strategies may be adopted in the face of the trade crisis but they will all involve intensified exploitation of the working class. At this stage, Carney is focusing on removing regulations and restrictions that limit exploitative capacities. He has grandly declared that he will achieve ‘free trade by Canada Day (1 July)’ between the provinces and territories. While this is being presented as an exercise in job creation, what is actually being implemented is something that business lobbyists have been pressing for insistently. This is the reduction of the adequacy of provincial regulations that protect workers, consumers and the environment to the lowest common denominator. 

On 25 March, the Canadian Mining Journal reported that ‘federal approval [will] no longer be needed for key infrastructure and mining projects.’ This means that Carney ‘has publicly endorsed a long-desired policy goal amongst mining advocates in Canada of a “one project, one review” permitting system.’ The report pointedly notes that mining ‘companies, investors, and industry analysts have been saying for quite a while that permitting and approval delays have been a major obstacle to building projects and have acted as a significant deterrent to mining investment.’  

Given the appalling history of environmental degradation and violations of Indigenous rights that the mining industry is associated with in Canada, this initiative has the most serious implications. It is, however, entirely consistent with the general approach of removing social protections that curtail the pursuit of profits. 

Response to Trump 

All of the lesser imperialist powers that have functioned as junior partners of the US are reeling under the impact of the America First approach and the protectionism that comes with it. As Carney is well aware, however, the effects on Canada will be particularly severe, as we can see from the fact that, in 2023, 77% of Canadian exports went to the US and 63% of goods imported into Canada came from that country. 

Under conditions of such extreme economic integration, the sudden protectionist shift by the US necessitates a very major economic and political reorientation on the part of Canada’s ruling establishment. This election is about securing a stable government, with a solid electoral mandate, that can go about this task with full vigour. 

The particular vulnerability of Canadian capitalism has compelled those in power to take a combative stand in the face of Trump’s trade measures. Carney openly declared on 28 March that the ‘old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over.’ He added, rather bitingly, that it’s ‘clear the US is no longer a reliable partner. It is possible that with comprehensive negotiations, we could reestablish an element of confidence but there will be no going backwards.’ 

Like other abandoned allied powers, Canada is preparing for a situation of global rivalry in which it can no longer count on the support of the vast military power of the US, and a turn to increased military spending will be embarked upon, at the expense of social spending. On the campaign trail, Carney has provided some initial indications that he will move more decisively in precisely this direction. 

The ‘Liberal plan to invest in trade enabling infrastructure, to diversify our trade away from the United States, create new jobs and build one Canadian economy’ that Carney announced in the opening days of the election campaign, is also of major significance. It creates a $5 billion ‘Trade Diversification Corridor Fund’ that will be devoted to shifting away from reliance on trade with the US and securing new export markets. 

It is important to appreciate that this central element of the Canadian establishment’s plan to survive the regime of US protectionism poses a major threat to workers and communities. As we can see from Carney’s early initiatives, the effort to diversify trade will come at a cost. If Canada is to compete successfully in the international scramble to secure new markets that Trump’s tariff wars are creating, lower wages, rationalised workforces and reduced social spending will be the price to be paid. Working-class needs and Carney’s version of the ‘national interest’ are on a collision course. 

Mark Carney, the wily central banker, seems likely to prevail in this election. If he secures his mandate, he will be a dangerous adversary who is devoted to stabilising Canadian capitalism in the face of the trade crisis at the expense of working-class people. As the harsh realities of his agenda become unmistakably clear, very major class battles lie ahead.