Former Prime Minister Stephen Harper has launched an attack on Mark Carney, front-runner for the Liberal leadership, concerning Carney's economic record just days before the party's leadership election. Harper, who appointed Carney to lead the Bank of Canada during the 2008 financial crisis, now alleges Carney has taken undue credit for guiding the nation through turbulent economic waters.
Carney’s leadership campaign prominently highlights his role at the helm of the Bank of Canada and later the Bank of England, claiming he successfully navigated Canada through one of the most challenging economic periods. His campaign website states, "Carney guided Canada through one of the most turbulent economic periods in modern history, protecting jobs and helping to secure a stronger recovery."
Harper counters this narrative, asserting through a Conservative party fundraising email, sent out on Monday, March 3, 2025, just days before the Liberal party meets on March 9 to select its new leader, "It was then-finance minister Jim Flaherty who made the hard calls," implying Carney lacks experience managing the economy day-to-day.
Interestingly, Harper's recent criticisms starkly contrasts with the respect he afforded Carney eight years earlier when he stated Carney had done an "admirable job" amid economic uncertainties and was considered "a valued partner" in the government’s stabilization efforts.
Throughout the 2008 global financial crisis, Carney's decisive actions, such as slashing interest rates to historic lows and ensuring liquidity for Canadian banks, have been praised by many, including Flaherty, who passed away in 2014. Carney's effectiveness won him recognition as one of Time magazine’s 100 most influential people of 2010.
Carney has significantly out-fundraised his counterparts within the Liberal contest, including former finance minister Chrystia Freeland and former House leader Karina Gould. This trend suggests he is consolidatively seen as the preferred candidate at this juncture. Harper's comments come at a time when the Conservative party grapples with declining poll numbers following Prime Minister Justin Trudeau’s recent resignation.
Meanwhile, the political climate is heating up south of the border as President Donald Trump announced 25% tariffs on imports from Canada set to start on Tuesday, March 4, 2025. This sweeping measure is positioned to thrust the North American continent toward trade war. "No room left for Mexico or for Canada to make a deal," Trump stated at the White House, confirming his administration's strict enforcement of new economic policies.
This upcoming tariff, which includes a lower 10% levy on Canadian energy, reflects Trump's persistent focus on economic nationalism and is emblematic of protectionist rhetoric increasingly dominating American politics.
Initially delayed to implement these tariffs, Trump previously linked the measures to illegal immigration and drug trafficking. Yet now it seems these tariffs are manifesting as punitive economic tools. "What they’ll have to do is build their car plants, frankly, and other things in the United States, where you have no tariffs," Trump remarked on potential steps available to Canada and Mexico to avoid these new duties.
Canadian Foreign Affairs Minister Mélanie Joly indicated Ottawa is ready to respond with its retaliatory tariffs. If the U.S. tariffs go forward, Canada will impose its own 25% tariffs on $30 billion worth of U.S. goods, with plans for additional levies on $125 billion more to follow. Joly stated, "We are ready," reiteratively signaling Canada’s commitment to counteracting U.S. tariff measures as the diplomatic environment remains fraught.
Canadian officials and provincial leaders had been voicing concerns and negotiating with U.S. representatives for months, endeavoring to stave off Trump’s tariff threats. Joly’s recent actions, including the appointment of a new "fentanyl czar" and the designation of Mexican cartel groups as terrorist organizations, highlight Ottawa's strategic shifts aimed at thwarting illegal drug trafficking and mitigating U.S. concerns.
Despite these preparations, some U.S. officials express skepticism about the targets of the tariffs. New York State Gov. Kathy Hochul emphasized on CNN, "This is such an extreme remedy," pointing out the disproportionate effect tariffs may have compared to the actual volume of drugs crossing the northern border.
Commentators, including Republican strategist Doug Heye, suggest Trump’s tariff threats are part of broader political maneuvering to claim victory on economic policy, irrespective of actual outcomes such as burdening American families with increased costs due to tariffs.
The timeline is complicated, as these tariff threats align with Trump’s broader agenda and the upcoming mandatory review of the Canada-U.S.-Mexico Agreement (CUSMA). The agreement, which replaced NAFTA during Trump’s previous presidency, faces scrutiny amid Trump's renewed focus on bilateral trade relationships.
With political tensions rising on both sides of the border, the consequences of Carney's leadership campaign and Trump's trade policies will likely reverberate across the Canadian political spectrum and U.S.-Canada relations. Both developments highlight the current challenges facing political leaders accountable to their constituents amid international pressures and economic uncertainties.
With the Liberal leadership contest imminent and the looming threat of tariffs, Canadians will be watching closely as these narratives develop, shaping the economic and political landscapes long-term.