Mark Carney is the new leader of the Liberal Party and prime minister. He has miraculously resuscitated the Liberals, capitalizing on the fears raised by Trump’s threats. But while Carney may fight against Trump, the question remains: In whose interests?
Liberals back from the dead
Carney completely dominated the Liberal leadership race, winning 85.9 per cent of the vote. Runner-up and former Trudeau sidekick Chrystia Freeland came away with only eight per cent. Carney even trounced Freeland in her own riding—signalling above all else a desire to distance from the hated Trudeau.
Canada now has a former banker, never elected to any political post in his life, in the most important seat of the country. He was also elected in a leadership race in which only 38 per cent of registered Liberals voted—just over 150,000 people. And this happened after the hated Liberals appealed to the representative of the British King to cancel parliament in order to buy time to sort out their problems! So much for living in a “democratic” country.
According to some polls, with Carney as leader the Liberals are now in a dead heat with Pierre Poilievre’s Conservatives. This meteoric rise can be attributed almost entirely to the changed political dynamic brought upon by Donald Trump’s threats against Canada.
Prior to this, the Liberals found themselves in an abject crisis. Having overseen the largest cost-of-living crisis in a generation, anger against Trudeau was at an all time high. Poilievre, arguing that “Canada is Broken,” benefited massively from the dissatisfaction with the status quo, denouncing the government for everything under the sun.
But with an economic disaster looming, Carney is being seen by many as a “safe pair of hands” to steer through the crisis.
The question is: safe for who?
Carney and Poilievre: Two sides of the capitalist coin
While Carney has said that he will put “people before money,” and has criticized Poilievre for worshiping “at the altar of the free market,” when we look at their programs, they are identical on all fundamentals.
In fact, it would be difficult to find someone in politics who is more of a direct representative of the ruling class than Mark Carney. He’s been governor of the Bank of Canada and Bank of England, and worked for companies like Goldman Sachs, Brookfield Asset Management, and Bloomberg, which collectively manage trillions of dollars of assets.
In terms of their programs, both Poilievre and Carney have stated that they want to end Trudeau’s deficit spending and balance the budget—a euphemism for austerity. In fact, Carney is going further than Poilievre. He’s said he’ll balance the budget in three years, while Poilievre has been more vague.
Both Carney and Poilievre want to increase military spending to the two per cent NATO target. But Carney has actually said he would do this by 2030—two years before the target set by Trudeau while Poilievre wouldn’t commit to a timeline, blaming the “dumpster fire” of a budget he was going to inherit.
Also, both Carney and Poilievre have stated that they will remove the Carbon tax and cancel the scheduled capital gains tax hike.
Liberals pivot to austerity
In 2015, Justin Trudeau rose to power, riding a wave of popular anger against the hated Harper Conservative government. His approach marked a stark contrast from the previous Martin/Chretien Liberals who obsessively balanced the budget by carrying out massive cuts to healthcare and education spending. Instead, he ran a deficit every single year.
Carney is a decisive break from that. To give any indication of the direction Carney is heading, we just need to look at his acceptance speech on March 9 where he started by worshiping former Liberal Prime Minister Jean Chrétien, who he claimed “made history by making courageous decisions,” and inspired him “to continue your tradition of fiscal responsibility.”
For those who either weren’t around or have a short memory, the Chrétien government in the 1990s carried out the largest cuts to healthcare and education spending in the history of the country.
Carney is already reaching out to the most fiscally conservative Liberal leaders across the country, trying to assemble his team. Carlos Leitão, who was the finance minister in Quebec and oversaw brutal cuts to social spending has confirmed that he’s in discussions with Carney. “We’re going to review, program by program, to see if it’s still relevant to maintain this, or to eliminate them altogether.” Sounds like Elon Musk? Nope, that’s Leitão in 2014, whom Carney wants on his team.
It’s also come to light that Carney is courting former premier of Quebec, Jean Charest. Charest is best known for provoking and being tossed out of power by the largest student movement in the history of the country, when he tried to to double tuition in 2012, amongst a slew of other austerity measures. Charest began his career as a federal Conservative and tried to run for the federal Conservative leadership but ultimately lost to Poilievre. Others, like former B.C. premier Christy Clark are also considering jumping on board. She is likewise hated for her corruption, attacks on unions, and deregulation.
Of course, Carney isn’t openly talking about austerity. He does, after all, need to get elected. Instead, Carney throws a lot of technocratic dust in the air, talking about splitting the federal budget into the “operational budget” and “capital spending”. He says he’ll balance the operational budget while running a small deficit in capital spending—“spend less, invest more”, according to his slogan.
In plain English, what this means is that he is prepared to go into debt to fund corporate projects but not social services.
Indeed, the operational budget is things like wages for public employees, spending on programs like EI, and transfers to the provinces for healthcare and education. Carney claims that he won’t make cuts to services, but that’s impossible if Carney wants to balance the budget. He plans to cap public sector employees and review program spending.
But the idea that “cutting waste” (a term that both Poilievre and Carney use) is enough to balance the budget is pure fantasy. In 2023 federal program spending amounted to $450.3 billion, and the federal deficit was $61.9 billion. To meet the NATO target right now, Canada would need to increase military spending by an additional $20 billion. Balancing the budget and increasing military spending at the same time would require an 18 per cent cut in spending. Carney could fire every single federal employee, and still need to find another $21 billion in cuts.
The dilemma facing the ruling class
The ruling class in Canada faces a huge dilemma. The economic prospects are gloomy and the trade war with the U.S. threatens a catastrophe. The two options of Poilievre or Carney present us with two bad paths.
Poilievre claims that he will “cut corporate welfare” but if this happens, many companies who rely on it would simply shut down, resulting in tens of thousands of job losses.
On the other hand, Carney promises a more interventionist government stating that “Markets are the most powerful tool we have ever invented. […] When they’re governed badly—or not at all—they’ll deliver enormous wealth for a lucky few and hard times for the rest.”
According to Carney’s plan, he is prepared to go into debt to fund capital investments; that is, one-time expenditures like on infrastructure. The claim is that this will “catalyze enormous private investment”. This is just a convoluted way of saying he’ll subsidize private corporations.
But this is exactly what governments at all levels across Canada have been doing for years, from pandemic subsidies, to purchasing the Trans Mountain pipeline, to giving handouts to Volkswagen and Northvolt. None of these instances were followed by “enormous private investment”, just capitalists pocketing free money.
So Carney and Poilievre are both scrambling to find a way out of the dilemma facing the system. But neither of their so-called solutions will “catalyze enormous private investment” (Carney) or “unleash the free market” (Poilievre). Capitalism has failed and the golden days are not coming back.
Carney a safe pair of hands for the ruling class
Prior to Trudeau’s resignation, a layer of the Canadian bourgeoisie, unhappy with Trudeau’s “costly political gimmicks” and his proposed capital gains tax were lining up behind Poilievre who represented the more austere option. They understood that faced with the crisis of the system, they needed to decrease the debt and eliminate barriers in the way of private investment in order to make Canada more competitive on the world market.
But if we are to be honest, the ruling class never quite trusted Poilievre, chafing from his populist, anti-elite, anti-Bay Street rhetoric. They understood that appealing to the working class against the “financial elite” is a dangerous game, one they were unwilling to play.
Therefore Carney is the saving grace for the ruling class. He represents the safe pair of hands that it needs to pilot the ship through stormy waters. But this will be easier said than done.
Over the history of Canada, the Liberal party has carefully balanced between defending the interests of the system, while at the same time throwing some crumbs to the working class to ensure class peace. This strategy has been aptly described as “getting money from the rich and votes from the poor, with the pretext of protecting one from the other.” And this worked for a period of time.
But those days are decisively over. If Carney wins the coming election, this approach will be completely untenable. If we read between the lines, Carney’s government will be decidedly more right-wing and fiscally conservative than Trudeau. While he tries to be the smiling face of the system, claiming that he can meet the needs of both the capitalists and the workers, this is no longer possible.
