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CWA # 1621, 15 March 2025
Global Politics Explainer
Canada’s New Prime Minister: Who is Mark Carney? What are his immediate Challenges?

  Vaneeta

On 14 March 2025, Mark Carney became Canada's twenty-fourth Prime Minister. On 9 March, he won the leadership election of Canada’s Liberal Party. Carney won against three rivals with 86 per cent votes. In his first media address as PM, he said, "We will never, in any shape or form, be part of the US," and calls US Secretary of State Marco Rubio's comment on Canada being the 51st state “crazy.” Earlier in his victory speech, amid the tariff row with the US, he said, "My government will ensure our response has maximum impact in the US and minimal impact here in Canada while supporting the workers impacted."  

Who is Mark Carney, Canada’s new PM?
Mark Joseph Carney, born in 1965, is an economist; he studied at Harvard and had a successful career as an economist before becoming Canada's new prime minister. He has contributed significantly at many crucial moments. First, reintegration of South Africa into the international bond market post-apartheid while working at Goldman Sachs. Second, during the financial crisis in 2008, as governor of the Bank of Canada, his expertise in risk assessment and financial strategy helped Canada. Third, during Brexit, as governor of the Bank of England, he minimised the economic instability and helped in the transition.    

Carney does not have prior political experience, but his extensive experience in leadership and management in the private and public sectors makes him a reliable candidate at times when the trade war is knocking on Canada's doorstep.

What led to Carney’s election?
First is Justin Trudeau's resignation as Canadian PM and party leader. On 6 January 2025, Trudeau resigned from the Liberal Party leadership and as head of government amid disastrous opinion polls and party pressure. This led to a new election to choose a new leader for the liberal party and the new PM.

Second, Mark Carney’s financial sustainability expertise. Carney has extensive knowledge of economic crisis management and has successfully managed in the past, from the Russian financial crisis in 1998 to the 2008 crisis. His prior reputation as a respected financial leader played a crucial role in his election amid escalating trade tensions with the United States under President Donald Trump.

Third, the liberal party’s strategic shift. The rising cost of living, housing unaffordability, crime and a strained healthcare system in Canada made the ruling party unpopular, and polls showed the conservative party led by Poilievre as favourites. Therefore, the change in leadership amid Trump's threats shows a strategic shift to address the issue and revive public confidence. Carney’s policy agendas are centrist, a change from Trudeau, who moved the Liberals to the left.

What are the key challenges for the new PM?  
First, relations with the US. Donald Trump announced a 25 per cent tariff on steel and aluminium. As a result, Canada announced 25 per cent retaliatory tariffs on these metals along with computer and sports equipment. In his victory speech, Carney called tariffs “unjustified tariffs” and said that Trump was "attacking Canadian workers, families, and businesses." His big challenge is to balance Canada’s interests an manage the relationship with the largest trading partner. 

Second, addressing domestic economic issues. The cost of living in Canada has gone up, and people are struggling to afford houses. He has promised major investments in housing and clean energy projects, also tax cuts for middle-class families. Furthermore, diversifying the economy away from the US will be crucial for his tenure.   

Third, managing Justin Trudeau’s legacy. He has left a multifaced legacy from 2008 to March 2025. He became popular by pushing progressive values. Primarily, he will be remembered for his social policy.  He legalised cannabis, allowed euthanasia and introduced dental care, pharma care and government-subsidized childcare. Additionally, the affordability crisis and inflation. During his tenure, he increased government spending to rely on high tax revenue, which worked in his favour, but COVID-19 disturbed the economy and led to deficits. Moreover, the housing crisis was a major problem in Canada in 2024, leading to his unpopularity with a 22 per cent approval rating in December 20024.

Fourth, Canada’s climate policy and environmental commitment. Carney has been an advocate for sustainability and climate change awareness. He was a UN Special Envoy on Climate Change in 2019. However, contradictory to his beliefs, as a new PM, he might need to cut the pollution tax he championed. The opposition in Canada has linked pollution tax to the affordability crisis, and the slogan “axe the tax” became popular. Similarly, his victory speech mentioned making Canada “an energy superpower” with solar, wind, and “conventional” energy. All these decisions as a leader, which are against what he said before, pose a challenge.

What does Mark Carney mean for India- Canada relations?
As Canada's new PM, Mark Carney, will be a potential turning point for India-Canada relations. Carney has expressed a desire to mend ties with India. He wants to expand trade relations with like-minded countries and said, "...there are opportunities to rebuild the relationship with India.” The Comprehensive Economic Partnership Agreement (CEPA) talks might restart under him, which were pushed when Trudeau was PM. Carney is expected to bring a stable diplomatic relationship with India, boosting trade, immigration, etc. Some reports say India’s Ministry of External Affairs is thinking of restoring the Indian High Commissioner to Canada.

References

1. Andrea Shalal “Trump Threatens Further Tariffs as EU, Canada Retaliate for Those Already in Place." Reuters, 12 March  2025, https://www.reuters.com/markets/commodities/trumps-steel-aluminum-tariffs-take-effect-us-canada-trade-war-intensifies-2025-03-12/.

2. Anagha Jayakumar "Mark Carney: Canada's New Prime Minister." The Indian Express, 13 March 2025, https://indianexpress.com/article/explained/explained-global/mark-carney-canada-new-pm-9879189/.

3. Jessica Murphy "Mark Carney Wins Race to Succeed Justin Trudeau as Canada PM." BBC News, 10 Mar. 2025, https://www.bbc.com/news/articles/c36wkg47z1po.

4. Jillian Kestler-D'Amours "How the Justin Trudeau Era Changed Canada." Al Jazeera, 6 Jan 2025, https://www.aljazeera.com/news/2025/1/6/how-the-justin-trudeau-era-changed-canada.

5. Nadine Yousif "How Trump's threats have changed everything about Canada's politics." BBC News, 13 March 2025, https://www.bbc.com/news/articles/cd7eyz3yn5do.

6. Jillian Kestler-D'Amours  "How the Justin Trudeau Era Changed Canada." Al Jazeera, 6 Jan. 2025, https://www.aljazeera.com/news/2025/1/6/how-the-justin-trudeau-era-changed-canada.

7. "What Does Mark Carney as Canada Prime Minister Mean for India in Terms of Trade and Bilateral Relations?" Mint, 15 March 2025,https://www.livemint.com/news/india/what-does-mark-carney-as-canada-prime-minister-mean-for-india-in-terms-of-trade-and-bilateral-relations-11741972356770.html

About the author
Vaneeta is a postgraduate student at the Centre for South Asian Studies, Pondicherry University.

 

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