Canada’s Liberals stage an improbable comeback
If you keep track of international finance or economics, you have probably heard the name Mark Carney.
In 2008, he was appointed Governor of the Bank of Canada—Canada’s central bank. He was responsible for monetary policy, managing government debt, and, critically, the stability of Canada’s financial system.
And he took over at the beginning of a major financial crisis, when banks around the world failed and economies slid into a deep recession. Canada was able to avoid the worst of the pain; it got off easier than the U.S. and many countries in Europe, and Carney was widely praised for his steady leadership.
He was held in such high esteem that in 2013, he was appointed to the very same job, only this time at the Bank of England—the central bank of the United Kingdom, a much larger economy. That made him the first non-British citizen to lead the U.K.’s central bank, and the only person ever to head the central banks of two different countries.
The U.K. job turned out to be a tougher job than even he expected. That’s because he was in office during the U.K.’s vote to leave the European Union, called Brexit. Before the vote, he argued against Brexit. But after the vote, he helped stabilize the British economy during its messy divorce from the EU. Brexit negatively impacted the British economy, but it was far less bad than it might have been.
So Mark Carney led one central bank through the financial crisis, and then another through Brexit. That made him a bit of a star in the world of international finance. Many Canadians were proud that one of their own had done so well on the global stage. After his time at the Bank of England, he worked for a United Nations agency on climate finance.
But in early 2025, Mark Carney went back to Canada, became prime minister, and then led his Liberal party to a shocking comeback in an election his party was all but certain to lose. How did that happen?
Canada has two big political parties—the Liberals on the left and the Conservatives on the right. There are also smaller parties, the New Democrat Party, and the regional Bloc Québécois, which advocates for French-speaking Quebec.
The Liberals are the most successful party in Canada’s history. They have been in power for 65 of the last 100 years. But in early 2025, they were in trouble. The party was coming to the end of its third consecutive term in power—and it showed.
The public was growing tired of Liberal governance. The prime minister, Justin Trudeau, was deeply unpopular. Voters were frustrated with the cost of housing, high and rising taxes, and a slowing economy. Many thought Trudeau was too worried about social issues, and some were irritated by his preachy demeanor.
South of the border, Donald Trump had just won his second term in office. And Canada had its own mini-Trump: Pierre Poilievre, the leader of the Conservative party. He threatened to take money away from universities, reduce foreign aid, limit tax increases, and crack down on illegal drug use. Like Trump, he held large rallies, gave his opponents belittling names, and bashed the news media.
This approach seemed to be working. The Conservatives started the year with an almost-30-point polling lead. They were on course to win a national election for the first time since 2011; the Liberals were facing a near-death experience.
But then two things happened. First, Justin Trudeau resigned as prime minister. That meant that he, the unpopular incumbent, would not lead his party into the next election. The second thing that happened is that Donald Trump imposed tariffs on Canada, and started taunting America’s northern neighbor, saying Canada should become America’s fifty-first state.
Mark Carney spotted his opportunity. He wasn’t even living in Canada, but he left his job in London and moved to Ottawa, Canada’s capital. He ran for the leadership of the Liberal party, leveraging his reputation for competence and steady leadership. He won, filling the vacuum left by Trudeau’s resignation. That made him prime minister even though he wasn’t a member of Canada’s parliament.
He called an election for April 28, and the official campaign lasted just 36 days. He pivoted the Liberal party away from some of the more unpopular Trudeau-era policies, like a carbon tax. And he rallied Canada behind an anti-American and anti-Trump message. He said Canada should keep its “elbows up.” That’s a reference to a physical posture in ice hockey, Canada’s national sport. When you have your elbows up, you’re ready to defend yourself.
He hammered the point home on the campaign trail: “America wants our land, our resources, our water.” He convinced Canadians that he was the right person to defend Canada’s national sovereignty and negotiate with and against Trump on matters of trade and national security.
He said, more in sadness than in anger, “The 80-year period when the United States embraced…global economic leadership…is over. While this is a tragedy, it is also the new reality.” He said that Canada needs to get over the “American betrayal,” adding, “This is Canada and we decide what happens here.”
Pierre Poilievre was caught off guard. He had carefully honed his attack lines on Justin Trudeau, only to lose his easy opponent at the last minute. His Trumpian rhetoric, once a strength, became a liability amid Trump’s tariffs and fifty-first state taunts.
In the final weeks of the campaign, Poilievre tried to soften his tone, but it was too little and too late. He never could bring himself to fully denounce Trump. He presided over a last-minute collapse in support and even lost his own seat in Parliament.
In the end, the Liberals won the election, though they fell just short of a majority. That means they will need to work with smaller parties to pass legislation, as they have in their two most recent terms.
Jeff’s take
A couple more biographical details about Mark Carney. He was born in a town called Fort Smith, Canada. It’s in the Northwest Territories. He’s the first PM to be born in the territories—Canada’s vast, sparsely populated north.
If you’re by your computer, I want you to look at Fort Smith, Canada, on a map. That is way, way north. The population of the town is about 2,000. But even that doesn’t do justiceto how small the place is—the nearest large town is several hours drive away.
His parents were both teachers. He grew up in Edmonton, which is the capital of the province of Alberta. As a kid, he wanted to be an ice hockey player. He has degrees from Harvard and Oxford. I mentioned he’s the only person to lead the central banks of two countries. He’s also the only person to head a central bank and then be elected as head of a government. He’s just 60 years old and had never held any elective office before becoming prime minister.
He openly admits that he needs to work on his French—usually that would be a liability in Quebec, but the Liberals did pretty well in the French-speaking province this year.
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