Next PM promises to be tough on Trump, scrap carbon tax, capital gains tax changes
The Liberal Party chose its successor to Justin Trudeau on Sunday, thrusting former investment and central banker Mark Carney into the currently crazy mix of global politics as Canada’s next prime minister.
The man whose career started with Goldman Sachs and saw him lead the Bank of Canada and the Bank of England, will face unprecedented challenges when he moves into his office at 80 Wellington Street (24 Sussex is still out of action with a hefty price tag on renovations).
With the spectre of Trump’s tariffs along with new retaliatory levies announced over the weekend by China, the incoming PM will face trade battles and potential military ones (if he continues Trudeau’s supportive tone on Ukraine). Plus, there’s the political battle of an election before the year is over, possibly sooner than the October deadline.
But with 86% of Sunday’s vote, Carney was seen as the right candidate to lead the federal government rather than former finance minister Chrystia Freeland or other challengers Karina Gould and Frank Baylis.
In his victory speech, he acknowledged that the country and the government will have to “do things that we haven’t imagined before, at speeds we didn’t think possible.”
Business leaders will be hoping that includes making good on his pledge to reform the carbon tax, and that certainly featured in his victory speech along with another unpopular tax move by the Trudeau administration:
“My government will immediately eliminate the divisive consumer carbon tax on families, farmers and small and medium-sized businesses. And we will stop the hike in the capital gains tax because we think builders should be incentivized for taking risks and rewarded when they succeed,” Carney promised.
Addressing Trump’s tariffs, Carney said: “My government will keep our tariffs on until the Americans show us respect — and make credible, reliable commitments to free and fair trade.” Before his win, he also hit back at Trump’s talk of Canada becoming the 51st state of America: “We have made this the greatest country in the world and now our neighbours want to take us. No way.”
Taking several swipes at Conservative leader Pierre Poilievre, he reiterated his message that he is not a career politician and “knows how the world works” having held multiple private sector roles. Carney is only the second person to ascend to PM without being a member of parliament, although it’s expected he will seek a seat to avoid logistical challenges.
It’s not clear when the new PM will take office, but discussions with Justin Trudeau are likely to provide answers in the coming days.
Carney is no stranger to challenges having been governor of the Bank of Canada during the global financial crisis of 2008, responding with aggressive interest rate cuts that lasted more than a decade and liquidity measures.
Crossing the pond, his time as governor of the Bank of England saw the challenges of the Eurozone crisis that threatened the region’s financial stability, and the UK’s Brexit vote, which required the BoE to protect against financial crisis and help calm the markets.
Back home in Canada, the former FSB chair and Brookfield Asset Management executive helped the Canadian government with the economic impact of the Covid pandemic.
