The echo chamber of Canadian politics reverberated with some particularly juicy scuttlebutt last week. Mark Carney was set to announce as a Liberal candidate and become Canada’s finance minister, it was heard and said.
The utterly imaginary ascended to the level of sure thing, thanks to two events. First, well-regarded York Centre Liberal MP Michael Levitt announced his resignation to become president of the Canadian Friends of the Simon Wiesenthal Centre for Holocaust Studies. The Toronto area riding was Conservative as recently as 2015, but it has historically been as safe a Liberal seat as any personage with an international reputation to protect could wish.
The second event was the return of Carney and his family to Canada, after seven years in London as governor of the Bank of England.
Wishful speculation swirled that he was buying a house in the ritzy Forest Hill neighbourhood of Toronto, as preparation for the York Centre by-election. The reality is understood to be more prosaic — he is abiding by the 14-day isolation period at a friend’s house in the city.
Liberals were particularly feverish about the homecoming. Always prone to political delusion, they saw Carney as the Messiah whose arrival would wipe away the accumulated sins of the Trudeau government, including the recent conflict of interest imbroglio.
In fairness, there are grounds for such daydreams. Last summer, the Liberals approached a number of luminaries to run in the 2019 election, including Carney and former Assembly of First Nations national chief, Shawn Atleo.
The timing didn’t work for either man — Carney had agreed to extend his time as bank governor in London until Brexit became a reality. But neither said no definitively.
The price of everything becomes the value of everything
Carney considered running for the Liberal leadership in 2012, before it became apparent that Trudeau would swamp all-comers, thanks to his extensive social media following. His thought at that time was to run in Ottawa-Vanier, the riding where he still has a home. That is said to remain his preference. The problem is, the riding is not vacant and the incumbent, associate finance minister Mona Fortier, has given no signs that she is prepared to relinquish the seat.
Trudeau’s team has apparently accepted that the prospects of Carney running for them at the next election are slim, so they have come up with a plan B.
BNN Bloomberg reported on Monday that Trudeau intends to appoint Carney as an advisor on economic recovery.
“There are lots of ways to serve your country without sacrificing happiness for duty,” said one source.
Carney spent a longer term in London than he originally intended and he was demonized by the angry populists in the Leave campaign during Brexit.
Such was the antipathy towards experts that two seniors from Bognor Regis interviewed by BBC Newsnight felt they had license to dismiss Carney’s economics doctorate, 13 years of investment banking experience and pilotage of two G7 central banks. “He doesn’t know any more than we do really, does he?” said one lady.
Such dispiriting encounters with the public should have suppressed any appetite to engage in elected politics — and it may have done so for his wife, Diana, a fellow economist Carney met at Oxford University. Yet, I fully expect him to run for public office one day — it is an ambition that remains unfulfilled, and he can’t have many of those left.
There are lots of ways to serve your country without sacrificing happiness for duty
In the meantime, he is eminently qualified to offer advice on Canada’s next steps toward recovery.
An article in The Economist in April set out his views on the post-COVID economy — crucially, on the potential for the gap to narrow between market values and what people value.
The crisis will accelerate the fragmentation of the global economy, he said, with travel restricted until a vaccine is found and applied.
Debt will inhibit the capacity for corporate growth and private dynamism could be restrained by too deep a relationship with the state.
COVID has reinforced the lesson of the 2008 financial crisis that resilience will be valued.
There will be lasting consequences for sectors that rely on aggressive household borrowing or a booming housing market.
He concluded that we have moved from a market economy to a market society, where an asset has to be in a market to be valued (for example, Amazon the company has a value; Amazon the region does not, until it can be farmed).
“The price of everything becomes the value of everything. The crisis could help reverse that relationship,” he wrote, citing climate change as the greatest test of this new hierarchy of values.
How much influence those views will have on government policy remains to be seen.
There are justifiable concerns that the Trudeau government has lacked focus and direction when it comes to emerging from the COVID crisis. Some senior Liberals believe Carney should be designer and driver of that plan as minister of finance.
In the drowsy heat of summer, there is a temptation to think the worst of the crisis is past. But a crunch is coming as Canadians come off the CERB and mortgage deferrals run their course.
Carney proved his worth in one crisis, when as Bank of Canada governor, he cut the overnight rate by 50 basis points at a time when other central banks were increasing rates. The Canadian economy subsequently outperformed its peers, becoming the first G7 nation to see GDP and employment levels recover to pre-crisis levels.
Perhaps to the detriment of all Canadians, similarly delicate, potentially precarious decisions cannot be taken by a hired gun.
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