For a victory speech, Mark Carney, the new leader of Canada’s Liberal party and the country’s next prime minister, struck a sombre note. “I know that these are dark days,” he said, speaking to party members in Ottawa on 9 March after winning the leadership race. “Dark days brought on by a country we can no longer trust.”
Carney, the former governor of the Banks of Canada and England, has had a remarkable political rise – this is his first elected office – in part thanks to Canada’s dark days. Since Donald Trump’s victory, the country has faced a slew of increasingly antagonistic threats of annexation and trade war. Carney entered the race to become the next Liberal leader after Justin Trudeau announced his resignation in January. Trudeau had become a liability for the party after a decade as prime minister and his popularity was plummeting among voters (in December 2024, 74 per cent of Canadians disapproved of his leadership). While the other main contender for Liberal leader, Chrystia Freeland, had served as Trudeau’s foreign minister, economic minister and deputy prime minister, Carney remained un-tainted by the prime minister and his unpopular policies. Instead, he sold himself as a “pragmatist” who would scrap Trudeau’s despised carbon tax and double the pace of building new homes in the coming years.
But there are few illusions that this election centred on domestic matters; the most urgent political issue for the country is now Donald Trump. Claiming he wants to protect American jobs and manufacturing as well as halting illegal immigration and drug trafficking, the US president has targeted Canada, as well as Mexico and China, with a new tariff regime. His 25 per cent tariffs on almost all Canadian imports and 10 per cent tariffs on energy and critical minerals, would, if enacted, be devastating for the Canadian economy, tipping the country into a recession and wiping out as many as a million jobs. Canadians have responded by boycotting American products, while Ontario premier Doug Ford ordered all American-produced alcohol pulled from the shelves of the government-run liquor stores. Ontario also cancelled a $69m contract with Elon Musk’s Starlink satellite service. Trudeau meanwhile announced retaliatory tariffs on US imports, a move which Carney has echoed.
On the brink of economic warfare, it’s possibly not surprising that Liberal party members rallied around a career economist. Carney won on the first round ballot with close to 86 per cent of the vote. (Freeland, who has long been viewed as the party’s heir apparent, won a bruising 8 per cent.) As he is not an MP, Carney is expected to call a federal election very soon in order to gain a seat. (While unusual, it’s not without precedent that a party would choose a non-MP as its leader: in 1984, John Turner became the Liberal leader – and prime minister – after he had already retired from parliament.)
In a sign of just how dramatically Canadian politics have shifted in recent weeks, Carney’s Liberal party could very well win that election. Until Trump returned to the White House, the Conservatives led by Pierre Poilievre were expected to wipe-out the Liberals at the next federal election as they commanded a double-digit polling lead. But Poilievre has long mimicked Trump’s political style – from demonising the media to insulting opponents – a strategy which has now hurt his credibility. As Carney put it in his victory speech on 9 March, “Donald Trump thinks he can weaken us with his plan to divide and conquer. Pierre Poilievre’s plan will leave us divided and ready to be conquered. Because a person who worships at the altar of Donald Trump will kneel before him, not stand up to him.”
On paper, Carney might seem like the perfect candidate to meet this moment. Born in 1965 in Canada’s Northwest Territories and raised in the city of Edmonton, he studied economics at Harvard and Oxford before going to work for Goldman Sachs (where he advised Russia through its financial crisis in 1998). When he was just 42, he was named governor of Bank of Canada in 2007 and was widely credited with helping the country recover from the 2008 financial crisis relatively unscathed. He became the governor of the Bank of England in 2013, which he helped navigate through the tumultuous Brexit years (and was often accused of politicising the position by making public statements that were viewed as anti-Brexit). What he lacks in political experience, he appears to make up for in crisis management.
Many Canadians view Trump’s tariffs as not just an economic crisis, but an existential one. While Trump has embarked on a trade war with China and threatened both Mexico and Canada, there is only one country that he has also repeatedly suggested annexing. Though many American analysts and commentators have treated Trump’s social media posts referring to Canada as the 51st state or Trudeau as “the governor of Canada” as something of a joke, officials and citizens north of the border recognise a deeper threat.
In describing Canada as merely an extension of the US, Trump’s imperialist rhetoric echoes the worldview of Vladimir Putin regarding Ukraine. While there are no tanks massing on the border, the threatened tariffs are their own warning sign. In a speech on 4 March, Trudeau said that Trump was orchestrating “a total collapse of the Canadian economy because that will make it easier to annex us”. According to the New York Times, in a phone call in early February, Trump told Trudeau directly “that he did not believe that the treaty that demarcates the border between the two countries was valid and that he wants to revise the boundary”.
Carney clearly intends to mount a strong offensive against Trump. He used his victory speech to confirm that he would uphold retaliatory tariffs on the US “until the Americans show us respect” and has previously suggested Canada should diversify its trade relationships with “more reliable” partners. He has also pledged to boost defence spending to Nato’s target of 2 per cent of GDP by 2030 (which is still far below the amount Trump says he wants Nato members to spend). Yet it’s not clear that that will be enough.
However, the uncomfortable fact remains that Canada has spent decades building its economy around its southern neighbour: trade makes up one third of the Canadian economy and 75 per cent of its exports go to the US. The threat posed by Trump has united the country more than any other issue in recent history. The national pollster Angus Reid found that 91 per cent of Canadians want to be less reliant on the US in the future, preferring that option over repairing the US-Canada relationship. Yet shifting exports into new markets isn’t a simple endeavour: sending millions of barrels of Canada’s crude oil a day anywhere other than the US is impossible at the moment due to the lack of infrastructure, such as pipelines. Untangling the country’s fortunes from the US would require a radical remaking of the economy. That is something that Mark Carney, a technocratic centrist, is unlikely to do.
The dark reality of Canada’s dark days is that the only person capable of rescuing the country from the economic turmoil – and potential annexation – threatened by Donald Trump seems to be Donald Trump. If the US president wants to use his economic and military muscle against its long-time ally, there is very little any one leader can do to stop him.
[See also: America is turning on Trump]
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This article appears in the 12 Mar 2025 issue of the New Statesman, Why Britain isn’t working