Prime Minister Mark Carney’s decision to enter the political arena and capitalize on his time as Governor of the Bank of Canada to help win an election is a tragedy for the neutrality of a core Canadian institution.
Not only did Carney make the unprecedented jump from leading the Bank of Canada to leading a partisan political party, but he did so through emphasizing his role helping to steer Canada through the perilous waters of the Great Recession in his capacity as Governor of the Bank of Canada.
Commercials flooded the airwaves during this past spring’s election campaign with pictures of Carney with former prime minister Stephen Harper and the late former finance minister Jim Flaherty, trying to signal to centrist or swing voters that he could work with Tories.
Carney took credit for steering Canada through the Great Recession, despite the fact that it was Harper and Flaherty who made the tough political and policy calls. And Flaherty himself, who passed away tragically in 2014, wasn’t even able to dispute Carney’s recounting of events.
Carney’s rise to the prime minister’s office raises questions about the very future of roles like Governor of the Bank of Canada itself. If holders of that office secretly harbour future political ambitions, will they make decisions on crucial matters like interest rates with an eye to popularity?
One has to wonder for just how long Carney has aspired to seek elected political office, particularly given how central of a role he chose to play publicly throughout the Great Recession, something not replicated by his predecessors or successors, even during the COVID-19 pandemic.
Of course, no political appointee can be expected not to hold any personal political persuasions. But never before in Canada’s history has someone in a position like the Governor of the Bank of Canada gone on to aspire to political office. And Carney deliberately chose to run on his track record at the Bank of Canada during both his leadership campaign and the 2025 Canadian federal election.
Today, millions of Canadians would desperately like to see lower interest rates, which impacts everything from mortgages to car loans to credit card bills. If the present Governor of the Bank of Canada, Tiff Macklem, harbours political ambitions, what’s to stop him from pushing interest rates lower, even if doing so might upset the inflation equilibrium?
The answer is that there is little to stop Macklem from lowering rates if he makes a clear decision to do so. That’s the key role of the Governor of the Bank of Canada. The problem is that Carney’s decision to get involved in elected politics, and the way in which he decided to do so, may forever lead Canadians to wonder about the political neutrality of the Bank of Canada.
Former U.S. President Joe Biden made a similar mistake in appointing former Federal Reserve Chair Janet Yellen as his Secretary of the Treasury. While not quite as political as having Yellen run for president as a Democrat, it still gave voters the impression that Yellen had clear political persuasions. And she had only been out of the job as Fed Chair for less than four years before accepting Biden’s nomination to a political role.
The Bank of Canada is an important institution. But it is meant to operate in the political background and make sometimes unpopular decisions to raise interest rates or choose not to lower them. When the role of the Governor of the Bank of Canada becomes politicized, every move made becomes subject to greater scrutiny.
Carney’s decision to get involved in politics in and of itself is one thing. But running on his record as Governor of the Bank of Canada is quite another. One can only hope that Carney hasn’t set a future precedent and that officeholders in roles as important as Governor of the Bank of Canada will not in the future make a similar mistake. It may be good politics, but it simply isn’t good for the country.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
