Mark Carney leaves room for hope but there is little sign that he is about to do what's necessary
Last year, I supported the Conservatives in the federal
election because the Liberal government of the previous 10 years had produced
large net capital outflows, presided over Canada’s decline in the rankings of
the most prosperous countries per capita, conducted a suicidal war on the
petroleum industry, self-defamed the country for attempted genocide of
First Nations, was a useless member of the western alliance and did not deserve
a fourth consecutive term in office.
I had seen Mark
Carney as a central banker in Canada, where he was a scene-stealer when the
prime minister, Stephen Harper, and the finance minister, Jim Flaherty, guided
us through the 2008 financial crisis.
I also saw him in
the United Kingdom, where, as governor of the Bank of England, he had plunged
the bank into absurd controversies about global warming and parroted the
Cameron government’s nonsense about Europe.
His successor has renounced his dire predictions of the
consequences of Britain withdrawing from the European Union.
He paid no attention whatsoever to British reservations
about lack of democracy in the European Union, where the commissioners shower
the entire population of the combined membership with authoritarian communiques
and are not remotely answerable to the so-called European Parliament, much less
the electorate.
The British are right to be hesitant to subordinate the
institutions that they have carefully built up over nearly 1,000 years to the
well-intentioned but unfledged institutions of Brussels and Strasbourg.
Carney ignored all of this. Although he won the election on
a spurious misrepresentation of U.S. President Donald Trump as a ravening
dragon assaulting the pure Canadian snow maiden of the north, almost everything
is fair in politics, he is our prime minister and I wish him success.
His principal strength in the polls continues to be his
supposed ability to stand up to Trump. This is just posturing. After then-prime
minister Justin Trudeau told Trump that the Canadian economy would collapse if
he imposed the tariffs he was considering, and because Canada had not made a
respectable contribution to its own defence since the retirement of Brian
Mulroney in 1993, and because, like most foreigners, Trump does not see much
difference between an English-speaking Canadian and an American from a northern
state, it seemed to him logical for the two countries to federate. At no point
was he threatening to occupy or annex Canada.
I strenuously criticized some of Trump’s reflections on
Canada, including directly to him personally, and supported some of Ontario
Premier Doug Ford’s rather draconian proposed countermeasures, including
threatening to add a surcharge to electricity exports to the United States.
It was an outrage for Trump to liken Canada’s conduct to
that of Mexico, which was complicit in the illegal entry of millions of people
into the United States, including many thousands of dangerous criminals, and
which systematically sought to create unemployment in the United States by
attracting American manufacturing to Mexican cheap labour for export
under free trade to the U.S.
The attempt, announced in Carney’s speech at Davos, to
mobilize the “middle powers” in resistance to the abuse of the hegemons, and
then going to Beijing to pander to the worst hegemon, is nonsense. If Canada
was governed well, it would be seen by everyone to be one of the most important
countries in the world.
Instead of trying to mobilize a gaggle of grumbling little
powers, we should concentrate on becoming a power ourselves. The world envies
not only our proximity to the globe’s greatest market, but the fact that the
Americans have not seriously bothered us for over 200 years, a comment that
very few other countries in the world can make about their neighbours.
The world is finally adjusting to the end of the Cold War
and of the Soviet Union. Former U.S. president Franklin D. Roosevelt knew that
if the U.S. did not maintain some presence in western Europe and the Far East,
all of Eurasia could be dominated by forces hostile to democracy and the
security of the United States would be endangered in every generation, and he
defeated the isolationists. But after the Cold War, the U.S.S.R.’s collapse and
reunified Germany’s integration into the democratic West, western Europe is
perfectly able to defend itself against Russia, which has floundered
ineffectually about in Ukraine for longer than the Russo-German war between
Hitler and Stalin. Russia is no serious threat to western Europe.
The U.S. doesn’t care what goes on in other countries as
long as it is not threatened. All the talk of China catching the United States
as the world’s greatest economic power has stopped. The U.S. can now be less
indulgent of countries that have been accustomed to taking advantage of it in
exchange for not fraternizing too intimately with America’s rivals.
This is the context for Trump’s greater nationalism, not
any ambition to “break Canada.” Of course, we should try to diversify trade,
roughly 70 per cent of which is now with the U.S. But building exports
elsewhere will be a lengthy process. We must start by reducing our corporate
tax rate to below the U.S level (21 per cent). Otherwise, we will not attract
foreign investment and our comparative GDP per capita will continue to fall.
Carney removed the federal carbon tax, and has attempted to
reduce inter-provincial trade barriers and encourage major infrastructure
projects, and he has announced an increase in defence spending and is creating
a sovereign wealth fund. I was in Calgary last week and many well-connected
people are confident that he will promote a new pipeline and assist oil and gas
exports.
All of this portends well, though little has come of it in
his first year. My greatest reservation about Mark Carney is that he truly
believes in Brussels-like government: highly educated bureaucrats determining
what is best for vast populations, with little accountability.
The European project has done a magnificent job of uniting
the continent but has been an economic failure: between 2008 and 2024, EU GDP
per capita (in current dollars) grew by 16.5 per cent, compared to 74 per cent
in the U.S. This is no model for Canada to emulate.
We have a more civil society than the United States and
most of my life it has been nearly as prosperous. But not anymore. We must
focus immediately and fiercely on narrowing that gap and turning our mighty
treasure house of a country into the envy of the world. Mark Carney leaves room
for hope but there is little sign that he is about to do that.
National Post