By Paul Vieira
OTTAWA--Former Canadian and U.K. central banker Mark Carney said the Canadian economy is struggling and the Liberal government under outgoing Prime Minister Justin Trudeau didn't put enough focus on policies aimed at fueling growth.
Carney has said he's considering seeking the leadership of Canada's Liberal Party following Trudeau's resignation. In an appearance Monday night on The Daily Show, he suggested--without mentioning his candidacy--that the party could benefit from an outsider with experience in economics and finance to help the Canadian economy navigate through troubled waters.
Carney said with Trudeau's resignation, the Liberal Party has a shot in the next election, which must be held no later than October but looks likely to happen in the spring when parliament returns to work in late March. Current polling shows the Conservative Party, led by Pierre Poilievre, ahead by 20 to 25 percentage points.
"I think in a situation like this, you need change. You need to address the economy," Carney said, in his first media appearance since Trudeau's resignation on Jan. 6. "Canadians have been very hard pressed in the last few years. Wages have not kept up with inflation. People are falling behind, not getting ahead... And truth be told the government has not been as focused on those issues as it could be. We need to focus on them immediately."
Canada's standard of living currently sits at a level equivalent to that seen about a decade ago, based on data measuring gross domestic product per capita. Shelter costs are at elevated levels, in part due to an aggressive immigration strategy that the Liberal government is now trying to roll back. And Canada now faces new turmoil, with officials increasingly fearing that U.S. President-elect Donald Trump will follow through on his pledge to slap a 25% tariff on all Canadian imports--a move that economists say would trigger a deep recession.
Carney is presently chairman of Brookfield Asset Management, with $1 trillion of assets under management, and is a special envoy on climate change for the United Nations. Trudeau appointed Carney last summer to be an economic adviser to the Liberal Party of Canada, tasked with recommending policies to bolster longer-term growth and lift the country's lackluster productivity record. Trudeau had also tried on previous occasions to recruit Carney to join the cabinet.
Carney was previously at Goldman Sachs before joining the Bank of Canada as a deputy governor in April of 2003. He was the Bank of Canada governor during the global financial crisis, and earned kudos domestically for his role in guiding the economy and ensuring financial stability relative to other Group of Seven economies. He later served as the Bank of England governor, from 2013 to 2020, during Brexit.
In the Daily Show interview, Carney said Canada could address climate change without a carbon tax--which has been one of Trudeau's signature policies. Political analysts say Trudeau's decision to press ahead with carbon tax increases amid high inflation was a key factor in his government's dwindling popularity. The Conservative leader, Poilievre, has vowed to repeal the carbon tax should he win power, and has tagged Carney with the moniker "Carbon Tax Carney" in anticipation of the former central banker running to replace Trudeau.
Carney said climate change likely takes a back seat among policy priorities under the incoming Trump administration. But U.S. lawmakers "are going to care about [climate change] again," he said. Once that time comes, Canada needs to be "in a position where we've done our [part], but we need to do it in a way that Canadians today are not paying the price."
The former central banker, along with former finance minister Chrystia Freeland, are tipped as the front runners in a race to replace Trudeau as Liberal Party leader and prime minister. Liberal Party members will vote on a new leader on March 9. Freeland left the cabinet last month in a shock move, just before the introduction of a fall economic update, citing policy differences with Trudeau on how to prepare for a possible trade war with the U.S.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
01-14-25 1040ET