Carney’s Holiday Moment of Triumph Masks a Tenuous Grip on Power

Mark Carney took the stage at a holiday event last week in a jubilant mood. He had just scored a political victory, and he was eager to make some theater of it.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Mark Carney took the stage at a holiday event last week in a jubilant mood. He had just scored a political victory, and he was eager to make some theater of it.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.“Some of you, and I salute you, have been Liberals your whole life,” the Canadian prime minister told the assembled group of elected officials and staffers. “Some may have just joined our party — like, literally, just joined our party.” Then he pointed to his right, where Michael Ma, a lawmaker whom he had just recruited from the opposition Conservatives, was about to enter to a standing ovation.The addition of Ma marked another dramatic moment in Carney’s campaign to hold Canada together with a centrist model of governing in an era when democracies are pulling to the populist right and left. The former central banker’s approval rating is above 50%, according to a recent poll. He’s winning over some conservative-leaning businesspeople with pro-growth ideas. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Yet Carney’s grip on power remains tenuous, nine months after he assumed Canada’s highest office with an agenda focused on the economy and countering US President Donald Trump’s protectionism.Even after adding Ma and another Conservative, Carney’s Liberals are still one seat short of a majority in Canada’s House of Commons, making them vulnerable to defeat on legislation. Middle-aged voters don’t love his party and opinion surveys show that Canadians are worried about the same issue that vexes the Trump administration — the cost of living.A year ago, Carney was still lurking on the sidelines of politics as Justin Trudeau’s administration was collapsing. When Trudeau quit, he jumped in and made history as the first person to become Canada’s prime minister without holding any other elected office first.“It was a pretty unprecedented, chaotic, crazy year,” said Dan Arnold, a pollster who worked for Trudeau and is now chief strategy officer at Pollara Strategic Insights. “A year ago, nobody would’ve had predictions for the year unfolding as it did. And we can make our predictions today, but I think there could be some wild cards out there.” That includes the possibility of another election in 2026. Even if that doesn’t happen, major political risks await Carney. Governing from the center means alienating chunks of his party’s coalition — as shown by the deal he cut with Alberta to advance a new oil pipeline. That decision caused the resignation of his Quebec lieutenant and may yet cost him support in the French-speaking province, which was crucial to his April election victory.Carney’s government also faces a perilous review of the US-Mexico-Canada Agreement, the trade deal that’s currently keeping Canadian exports to the US from falling off a cliff. Meanwhile, separatist movements are making noise in Alberta and Quebec. In the latter, a separatist political party is likely to win a provincial election, and it’s promising to hold an independence referendum.In many respects, the easy part for Carney was creating a personal contrast with Trudeau — a left-leaning longtime politician whose act had worn thin — and using Trump as a target.“Canadians have tended to elect boring, centrist prime ministers,” Arnold said. And Carney worked hard to appear as exactly that. It was effective. During the election, Carney largely avoided polarizing appeals to the left or right, and instead relied on his economic bona fides as the ex-governor of the Bank of Canada and Bank of England, one whose experience in the financial crisis and in the Brexit shock would help the government manage a trade war launched by Trump.That political strategy moved an important bloc of baby boomers, who shifted in large numbers from the Conservatives to the Liberals. In the face of Trump’s trade measures and menacing jabs about annexing Canada, those voters took the attitude that “we have to defend Canada at all costs, and Carney seems to be the right guy at this time to do it,” said Andrew Enns of polling firm Leger 360.Solidifying that older vote may also prove to be Carney’s method of holding onto power. “If there’s an election next year, I think those voters are going to be hard to get away from him,” Enns said. “He’s kind of governing like a small-c conservative — heavy on the economy, not getting caught up in some of the environmental stuff, taking action on crime and law and order.” But an issue that helped propel him to power in the first place — the trade battle with the US — may yet cause him trouble. After telling the public his government would use retaliatory tariffs to create “maximum pain” in the US, Carney backtracked. Under pressure from Trump, he withdrew a digital services tax to restart talks. Trump increased the base tariff on Canada anyway. Carney then removed many of Canada’s counter-tariffs unilaterally. Two months later, Trump cut off trade talks despite progress.Carney frequently talks about the Canada-US relationship as having suffered a historic “rupture” because of Trump. To trade lawyer Mark Warner, that rhetoric is political, and not necessarily helpful to the end goal: alleviating the suffering of tariff-hit industries and workers.“He’s got to bring Canadians around to the idea that we might have to compromise on some things that we’ve never been willing to compromise on,” said Warner. For example, that might include accepting that the Trump administration isn’t going to hand back billions of dollars in duties that Canada believes the US has unjustifiably collected for years on softwood lumber, he said.

The Oil CardCarney has been plowing ahead on another policy that may prove divisive. In November, he signed an agreement with Alberta Premier Danielle Smith — the sworn enemy of Trudeau and the Liberal Party’s environmentalist wing — to promote a new bitumen pipeline through the Rocky Mountains to the coast of British Columbia.The document calls for a higher industrial carbon price and use of technologies to reduce greenhouse gas emissions. But it also relaxes some major Trudeau-era environmental rules, such as those regulating pollution from power plants and from the oil and gas sector.Carney is selling the plan as a way to reduce Canada’s economic reliance on the US by opening up more energy exports to Asia and stimulating expansion in Alberta’s oil sands — a key driver of capital investment and economic activity. But it may cause him trouble in some key political battlegrounds, such as Vancouver and Montreal. There is probably “more downside than upside when it comes to this,” Arnold said, given the voters Carney may lose. “But I think it’s something he’s not necessarily doing because of electoral calculus, it’s because he’s legitimately focused on the economic issues.”That focus has been the main source of Carney’s political strength so far, said Lori Turnbull, a Dalhousie University professor specializing in Canadian parliamentary governance.“I just don’t think he’s in any way practicing polarizing politics or wedge politics,” she said. “A lot of the policies that Carney is putting forward, those are conservative ideas.” Indeed, some are similar to ideas Conservative Leader Pierre Poilievre has proposed himself. Affordability is an issue that plays well for Poilievre. It draws in younger voters who are particularly concerned about housing and other costs. Those issues tend to rise in importance during moments when Trump isn’t being belligerent toward Canada.But there are few easy answers for any politician. Bank of Canada figures show that housing is still much less affordable than it was before the pandemic, despite a decline in home prices, and grocery prices consistently outpace overall inflation.For that reason, Arnold said, a messy review of USMCA next year might end up working out, politically speaking, for Carney. “If all people are talking about is trade negotiations with the US, that becomes an even larger ballot question for voters,” he said. “I think Carney looks to be the one most trusted to deal with that, until people have evidence of the contrary.”Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.