Mark Carney’s trip to New York this week for the UN General Assembly included a stop at the Council on Foreign Relations, where he laid out, for an American audience, the theory of the case for his agenda.
While the venue lent a more international flavour, much of what he said will have sounded familiar to Canadians. Carney has been articulating for months his thesis about a changing world order and the policy response it demands.
All governments rest on some intellectual bedrock. But for Carney, intellectualism seems to be a default setting. And now that Parliament has returned from its summer recess and much of the political attention has shifted to execution, competency, and partisan sparring, it’s worth remembering the extent to which Carney’s agenda is being constructed on critical underlying assumptions about where the world is headed, and Canada’s place in it.
It’s also worth pointing out that those assumptions are not universally shared. Carney’s thesis rests on three pillars: first, that Canada is disintegrating economically from the United States and should embrace, even accelerate, the trend; second, that Donald Trump’s return to the White House has shortened the timeline for adjustment and created a crisis that must be addressed rapidly; and third, that meeting this challenge requires an activist state prepared to borrow and spend to reshape the economy.
I’m not contesting his thesis in this column. All I want to do is highlight that there are alternative theories of the case that lead to different sets of “optimal” policies, and perhaps a different future for the country.
Disintegration
On disintegration, the core assumption is that rising American protectionism is not a temporary political phase but a permanent structural feature of the global economy. Carney is telling Canadians that our economy must be transformed to be less reliant on the U.S. This means promoting more internal trade, building economic and other “nation-building” infrastructure at home, and diversifying international partners.
Reducing dependence on the U.S. has been a longstanding objective of governments over the past two decades. So has removing internal trade barriers to create a bigger domestic market. But the implication now is that a rupture has taken place that requires a whole new economic model, pursued with urgency rather than slow, incremental drift.
