How Mark Carney will change the Liberal Party
Mark Carney pictured at the Liberal caucus meeting in Nanaimo, B.C., on Tuesday, Sept. 10. THE CANADIAN PRESS/Darryl Dyck
“Why is he doing this?”
“Mark is jumping on a sinking ship.”
“I don’t get it.”
These were just a few of the messages lighting up my phone this week, all expressing bewilderment at Mark Carney’s decision to officially start advising Prime Minister Justin Trudeau.
For a man with Carney’s history of sidestepping calls to enter politics, it begs the question why now?
Trudeau’s motives seem straightforward enough. The Liberals are trailing badly in the polls, public frustration is high and the government is barely clinging to power. The prime minister needs a new economic narrative quickly—one with credibility and gravitas. Carney, with a resume that includes leading the Bank of Canada and the Bank of England, brings exactly that.
But what’s in it for Carney?
The former central banker has hovered around the edges of Liberal politics for a long time without fully committing. (A quick Google search of “Mark Carney Scott Brison” will tell you how long.)
Carney left the Bank of England in 2020. Since then, Trudeau has tried multiple times to bring him into the fold, offering roles in government and even a cabinet position. But Carney—who already holds a top-tier role at a major alternative investment firm, chairs a leading financial information company, sits on the board of a global fintech giant and advises the UN on climate change—has always declined.
Until now. And at a moment when Trudeau’s political prospects have never seemed dimmer.
‘Pragmatic, focused’
Officially, Carney’s new job is to advise the Liberal Party, not the government. His title is Chair of the Leader’s Task Force on Economic Growth and, according to a statement, his mandate is to draft “pragmatic, focused” policy recommendations for the Liberal leader and the party’s election platform committee.
Working for the party and not the government serves two purposes. First, it allows Carney to avoid conflicts of interest and keep his corporate roles intact.
More significantly, it gives Carney what he likely values most: control.
He now has a chance to steer the Liberal Party’s economic policy without getting bogged down in the daily grind of a government that may not survive the next election and where he would compete for influence.
While Carney doesn’t have a political machine, he’s positioning himself as the party’s intellectual heavyweight. That’s a powerful vantage point—whether he eventually runs for leader or not. Even if he stays behind the scenes, he’ll shape the economic debate in Canada, particularly around climate transition.
Critics will dismiss this as political theatre, and Carney isn’t likely to see any quick wins for his work. Even if his ideas make it into the Spring budget, there’s a more than 50-50 chance the fiscal plan won’t survive a parliamentary vote. And let’s face it, the platform, no matter how solid, will likely lose at the polls.
But Carney’s influence could outlast election defeat, potentially transforming the party’s policy toolkit for years to come.
The Liberal Party is ripe for change in its thinking. Since the pandemic, the Trudeau government has leaned heavily on fiscal expansion and social activism, an approach that appears to have run its course.
Scant payoff
In the last four years, Canada has seen a massive increase of both spending and revenue, but with scant political or economic payoff. In other words, no growth dividend, sagging poll numbers and challenges like climate transition and defense spending still unresolved.
To be sure, the structural shifts in the global economy and geopolitics require a more engaged government going forward. But these challenges—particularly on climate—are too vast for any government to tackle alone without significant private investment. This is where the Liberals have failed—the government’s overreliance on activism has undermined its own effectiveness and weakened private sector growth.
And this is probably where Carney believes he can step in.
I can only speculate on what Carney will propose, but it’s almost certain—based on his voluminous public record—that he’ll move away from using government spending as the main instrument to solve Canada’s biggest challenges. Instead, he’ll lean more on targeted regulatory frameworks to push the private sector to shoulder more of the burden.
And should he ever become prime minister, Carney won’t be shy about imposing costs on businesses that don’t get on board.
This approach reflects Carney’s broader philosophy: set clear, firm rules and use strict follow-through and accountability to make sure the private sector delivers. It’s the same method he used to reshape global banking regulations after the financial crisis, and it’s the foundation of his work on integrating climate risk into the financial system.
While the Liberals will argue they are already doing these things, Carney’s contribution will be to shift the party’s center of gravity toward core priorities (like climate), away from activist, government-first approaches and to emphasize what he calls mission-oriented capitalism where the private sector drives growth and change through market-driven solutions.
That’s where the Liberals are headed. Unless of course someone in the party has any better ideas.
