Mark Carney would struggle to distance himself from the Trudeau era

Mark Carney, the former governor of the Bank of Canada and Bank of England, is still deciding whether he wants the Liberal crown. But if Liberals have any hope of resurrecting the party, experts say a stark contrast must be drawn between the new leader and outgoing Prime Minister Justin Trudeau.

Experts interviewed by Canada’s National Observer say Carney is comfortable discussing climate change, understands the risks to the economy and what’s required to pull off the energy transition. 

In recent years, Carney has served as U.N. Special Envoy for Climate Action, and alongside U.S. billionaire Michael Bloomberg, steered the Glasgow Financial Alliance for Net-Zero (GFANZ), and testified to the Senate banking committee about the risks climate change poses to Canada’s financial system. 

But at the same time, there are warnings about Carney’s approach.

“He has not been a big proponent of regulation, and rather, has leaned into things like maybe requiring disclosure, which is just simply revealing data and leaving it to the market to determine what kind of positive actions will be taken as a result of that data,” said Richard Brooks, climate finance director with Stand.earth. “That is an overly optimistic — and I would say naive — approach to how action happens.”

What we know about Carney and climate change

Voluntary, market-based climate policy, like disclosing a company’s emissions, is Carney’s bread and butter. 

In May, Carney appeared before a Senate banking committee discussing legislation that would require federally regulated financial institutions, like banks and pension funds, to align their portfolios with Canada’s emission reduction targets. Carney said he disagrees with the bill. 

“Do we, through law, choose to dictate that alignment, for example, with capital rules that are punitive?” he asked. “When there are elements of the bill that get to be dictating what a financial institution in Canada must do in terms of lending or not lending, or investing or not investing, that’s where I part ways with the bill as designed.”

Conservative Leader Pierre Poilievre is attempting to brand Carney as “Carbon Tax Carney,” but in reality, Carney has expressed discomfort with carbon pricing. At the May Senate hearing, he said carbon pricing has “served a purpose up until now.”

Brooks called Carney’s reluctance to regulate action “disappointing.”

“These voluntary initiatives that Carney has championed really have failed to produce results, and that I think is a real mark against his record on this issue of climate and financial regulation,” he said.

“When you look at his track record, he was the one who really drove the set-up of the Glasgow financial alliance for net zero, and the creation of the various bodies under it, including the net zero banking alliance which literally today is collapsing,” he said, referring to major U.S. banks exiting the alliance.  

“GFANZ bent over backwards to make as big a tent as possible to welcome as many private sector financial institutions into it as humanly possible, and in doing so, under his leadership, they have watered down all the criteria for entry.”

Adam Scott, executive director of Shift: Action for Pension Wealth and Planet Health, said Carney’s failed strategy to set up a big tent to incentivize financial institutions to help cut greenhouse gas emissions should be a lesson in the limitations of voluntary action.  

“Carney could've built a coalition of actually ambitious players early on and kept their membership restricted, and exclusive, and that might've been more effective,” he said. 
“But GFANZ has been a vehicle for greenwashing since it was invented, and we haven't really seen Mark Carney step up and use his leadership power to do anything about that. 

“It's just eroded into nothing and it's been quite frustrating.”

Liberal backroom track for corporations

A frequent criticism of Trudeau’s time in power is the federal government’s hypocrisy on climate action. It famously bought the Trans Mountain pipeline to carry out a multi-billion dollar expansion to facilitate increased oil production the day after declaring a climate emergency. But experts say critical measures to tackle emissions from the largest corporate polluters were commonly slow-walked as billions of dollars of tax breaks, policy loopholes, and watered-down regulations were offered to the fossil fuel sector. 

Experts say the next Liberal leader should differentiate themselves from Trudeau — a painful lesson U.S. Democrats learned when President Joe Biden bowed out of the presidential race leaving Vice President Kamala Harris to run on the incumbent’s record with little attempt to show voters how she would be different. 

“There are things you can do to stand out, and be what Canadians need in the next leader of the Liberal Party, and it is basically to stand up to corporate polluters,” Brooks said. “You embrace a position that appeals to Canadians because it speaks about confronting big corporations and their excess of profits, and the damages they are causing to our environment, and also addresses the affordability and jobs crisis in Canada.” 

But for Carney, in particular, who is well connected to corporate Canada, (another major position on his CV: chair of financial titan Brookfield Asset Management) it’s unclear if he could credibly champion holding big corporations accountable. 

Scott traces much of the Trudeau government’s slumping public support to the "overwhelming" sense the Liberal Party takes the preferences of major corporations and their powerful lobbies into consideration too much. 

“There's a separate backroom track, a direct line into corporate boardrooms, that really dictates what policy gets done and how,” he said. 

“That's a major concern for Carney, and he would need to demonstrate pretty clearly that he has independence from all his corporate finance connections.”

The Angus Reid Institute published polling data Friday on the pros and cons of potential Liberal candidates of Carney; former Finance Minister Chrystia Freeland; Foreign Affairs Minister Mélanie Joly; Innovation, Science and Industry Minister Francois-Philippe Champagne; Minister of Finance and Intergovernmental Affairs Dominic LeBlanc; and Minister of Transportation and Internal Trade Anita Anand. 

“While Chrystia Freeland is most likely to turn Canadians toward the Liberals, she is divisive, and also most likely to turn voters away,” the polling firm found. The data, published before Trudeau resigned, also suggests that all the other candidates “generate little change compared to Trudeau.” 

“If the Liberal Party is to avoid an electoral catastrophe, it will need foremost to pull fence-sitters from supporting the NDP,” the polling found. “More than half of those who would definitely consider the Liberals currently lean toward Jagmeet Singh’s party.”

Former B.C. Premier Christy Clark — a proponent of LNG — has also expressed interest in running for Liberal leader. In the lead up to the holidays, she was in Ottawa to network with Liberals, including door-knocking in Poilievre’s riding with Liberal candidate Bruce Fanjoy.