Mark Carney and the Liberal Party have staked their political project on the notion that Canada is in the throes of a generational crisis. Economic turmoil, geopolitical instability, and the end of the special Canada-U.S. relationship—these are, in their telling, the conditions demanding not just good governance but historic transformation. It’s the intellectual and emotional case for Carney’s own entry into political life: he is, by his own admission, a man for the moment.
But what if the moment is passing?
There are signs that the government’s crisis narrative is increasingly at odds with unfolding realities. Consider three developments in just the past few weeks.
First, Donald Trump—widely invoked by the Liberals as a looming threat to global order and Canada’s own prosperity—has notably softened his rhetoric toward the country. Gone are the broadsides about becoming the 51st state. He’s already granted us various carve-outs from his global tariffs and spoken positively about a new Canada-U.S. trade and security agreement. Whatever one thinks about the president and his motivations, these developments plainly undermine the centrality of Trump-as-bogeyman in the government’s messaging.
Second, Canada’s stock market is at record highs. Markets are not perfect barometers of national well-being, but they tell us something about investor confidence in the country’s fundamentals. The strong performance of the TSX—even amid global uncertainty—doesn’t suggest an economy on the brink. It suggests resilience, recovery, and normalization.
Third, the federal government itself has reversed course on some of its retaliatory tariffs against the United States. After warning of dire consequences if Ottawa didn’t respond forcefully to Trump’s trade threats, the Carney government quietly backed down. It’s a revealing decision—not only because of its substance, but because of what it signals. Rhetorically, the Liberals continue to insist we’re in a moment of existential stakes. But in practice, they’re behaving like the emergency is easing.
One gets the sense, then, that the gap between the government’s words and its actions is growing. It’s a case where watching what the government does is more instructive than listening to what it says.
That tension leads to a fundamental question: can the Carney government give up the contention that we’re in a crisis?
It’s not merely a communications issue. The government’s entire agenda—its massive spending plans, industrial subsidies, and broader mission of economic nationalism—has been sold as a response to extraordinary circumstances. If those circumstances begin to dissipate, the political rationale for such an interventionist program becomes harder to sustain.
The risk is not just that the government looks out of step with the national mood—it’s that it becomes actively invested in preserving a sense of crisis. If you believe your governing legitimacy flows from exceptional times, you may be tempted to drag them out. That might mean taking an unnecessarily hard line in trade negotiations. It might mean extending temporary spending programs. It might even mean overstating threats in order to justify extraordinary responses like another pandemic-style (and debt-financed) spending boom.
This is where Carney himself becomes a particularly interesting figure. His decision to enter public life—after years of being courted—seems tied to the conviction that this is a time of historic consequence. He speaks the language of transformation, of seizing the crisis as an opportunity to reorder markets and institutions. But what happens to that ambition if the moment turns out to be more ordinary than exceptional? What becomes of Carney the reformer if Canadians mostly want competence, not crusades?
There’s a risk here—not just for the government, but for the country. Canada could find itself governed by a party and a prime minister who are committed to a vision of the world that no longer quite matches the facts. They may continue to act as if we are in 2009 or 2020 or 2022, long after the policy conditions for that urgency have faded. That’s how we end up with bloated deficits, distorted markets, and a growing statism that undermines rather than strengthens Canada’s economy—and creates the conditions for another “lost decade.”
The irony, of course, is that the normalization of events—Trump’s tempering, market stability, a calmer geopolitical environment—should be good news. But it may be politically inconvenient for a government whose core identity is built on the proposition that Canada is at a “hinge moment” in its history.
The true test of the Carney government may not be how it responds to crisis. It may be whether it can channel the new prime minister’s self-espoused pragmatism as the sense of national crisis fades and the humdrum but necessary work of building a more prosperous and wealthier Canada beckons.
