"When you are attacked, you are at war"

Canadian Prime Minister Mark Carney stood at the podium, his expression tense, as he announced that negotiations with Canada's largest trading partner had failed.

“Last spring, I warned that America was trying to break us so it could own us,” he said. “And I promised: that would never, ever happen. We are keeping that promise.”

For years, the former central bank governor worked hard to calm markets. Now he asked Canadians to embrace uncertainty and confrontation.

Towards the end of last Saturday's press conference, one reporter commented on the somber and combative tone of the speech: "Why does it seem like Mark Carney is going to war today?"

The Prime Minister paused.

“We are under attack. When you are attacked, you are at war,” he said. “We were attacked.”

The unexpected transformation of an economist and central banker with no prior electoral experience into a powerful global politician defied previous practice and expectations.

However, Carney fit into the role he warned Canada needed - that of a wartime leader confronting an unpredictable and vengeful adversary, seemingly determined to subjugate Canada.

After trade talks with the US collapsed, the two sides traded accusations and made threats of new tariffs on each other. In the latest move of petty provocation, Trump signed an executive order last Thursday ordering the US federal government to rename Lake Ontario “Lake America.”

However, by abandoning the proposed agreement, Carney did what few other leaders have done: he challenged Trump and the US to test his country's resolve.

"We cannot accept what they offered and we will not give what they asked for," he said.

“He was quite stubbornly determined”

For those who have worked with the demanding and occasionally temperamental central banker, such a resolute refusal to agree to a bad deal comes as no great surprise.

Carney grew up on the prairies of western Canada, and his story of an outsider who gradually makes his way into powerful institutions and ultimately reshapes them, gives clues about a man who is unwilling to accept the conditions others place on him.

“He was pretty relentlessly determined,” said one man who worked with Carney when he was the UN special envoy for climate action in 2021.

When trying to persuade banks to join climate commitments, Carney could be charming. “He was quite diplomatic when dealing with people he knew he had to win over,” said his former colleague.

So it was no surprise to see Carney confronting Trump on the world stage. “It doesn’t surprise me… and I think it’s because of that determination and unwillingness to back down.”

Carney wasn’t always so confident. When he was personally selected by then-British Chancellor of the Exchequer George Osborne to be governor of the Bank of England in 2013, Carney’s energetic and demanding approach didn’t sit naturally with the venerable institution in the City of London. When he arrived, guards in pink uniforms and top hats were still standing at the entrance.

He has carried the qualities he acquired during his time at Goldman Sachs into his term as prime minister. He still rises early, is dedicated to running and demands that his ministers know their portfolios down to the smallest detail, according to people who work with him.

The media also reported that employees were expected to wear formal business attire and that documents were written using British spelling - much to the dismay of Canadian linguists.

While Carney's career in a number of powerful institutions reflects a sharp and analytical mind, his tenure at the Bank of England showed that this economist, prone to detailed analysis, was also prepared to step into politics when he deemed it necessary.

When Karni changed the Bank's communications strategy and introduced so-called “forward policy guidelines” to show how the institution was thinking about future interest rates, the move was not initially seen as successful.

Senior Labour MP Pat McFadden, now a member of the government, accused the Bank under Carney of confusing investors and the public with contradictory messages about future interest rate movements.

In October 2015, as a referendum on whether Britain should leave the European Union approached, Carney, in a speech at Oxford University, highlighted the benefits the United Kingdom would derive from the “economic and financial openness” associated with membership.

While the eurozone debt crisis was still fresh in memory, Carney also pointed to the increased risk of financial instability that EU membership brought, but Brexit advocates used his positive comments as evidence of inappropriate interference in a highly politicized topic.

The dispute escalated further when Carney suggested that Brexit could push the UK into recession. Bernard Jenkin, the Conservative campaign director for leaving the EU, wrote to the governor urging him not to interfere.

Carney's response showed the same tendency toward confrontation that was later evident in his relationship with Trump.

“Dear Mr. Jenkin,” his letter began, “I am responding to your letter in order to immediately dispel the numerous and significant misconceptions it contains.”

He went on to accuse the experienced MP of "a fundamental misunderstanding of the independence of the central bank, as established by law."

In the end, there was no recession due to Brexit, which many economists attributed in part to the Bank of England's decisive response, including rapid interest rate cuts and quantitative easing - an emergency bond-buying program used during the global financial crisis.

Charles Rendell spent five years on the board of the Financial Stability Oversight Board, which Carney chaired after becoming governor of the Bank of England. “I’m sure if you call enough people who worked with him at the Bank you’ll find some who will say he had his faults,” Rendell said. “But when I’ve had time to reflect on my experience … he’s one of the most impressive people I’ve ever worked with.”

Rendell said that even behind the scenes, Carney was "a very serious person, extremely analytical, very motivated" and "very careful in the way he communicates."

“The morning after the Brexit vote in 2016… he went before the cameras to reassure financial markets that the Bank was prepared to face all the consequences of that decision,” he said. “It was a masterpiece of strategic communications.”

"Complacency will not bring security"

Joseph Steinberg, an economics professor at the University of Toronto, said that Carney "did not shy away from talking about hard economic truths" during the Brexit debate, but that he did not talk much about the economic aspects of the ongoing trade war with the United States.

“In public he leans quite strongly on the issue of sovereignty. It is clear that in private he is probably thinking about the cold, harsh economics of an extremely uncertain situation.”

Carney's decision to retaliate against the US has led some economists, including Steinberg, to suggest that Canada will suffer a much more painful blow than the US.

For the first time in his career, Karni is completely dependent on a wary public, which further highlights the clash of his two roles: a technocrat who understands economics and a politician who must be mindful of the political cost of compromise.

“At this point, Canadians are likely to be extremely intolerant of any concessions from the US, even if they would be in our economic interest,” he said.

Carney warned in Davos in January that “appeasement will not bring security” in a world increasingly dominated by hegemonic powers. Although he did not mention Trump, his speech was interpreted as a thinly veiled criticism of the US president’s intention to abandon long-standing alliances and reshape the world to his advantage.

One of Carney's prescriptions - building deep relationships with like-minded "middle powers" and restructuring to reduce dependence on former allies - has already begun to materialize in Canada, at a speed and scale that pollster David Colletto described as "a government set up on war footing, but without war."

“It is a government organized around an external threat, willing to suspend its own party dogmas, centralize power to act quickly, and measure its success by results, not values,” he wrote.

Carney has rolled back many of his predecessor Justin Trudeau's policies, including measures on carbon emissions and electric vehicles. He has also accelerated major projects, including an oil pipeline, and invested tens of billions more in defense.

“The public barely blinked,” Colletto said in an interview. “Mark Carney’s ratings have held up throughout this period.”

“When Carney first became prime minister, I was sceptical that a central banker would be able to respond to public sentiment, because that is against the nature of their job,” he said. “But I was surprised by how nuanced his understanding of the country was. He has shown himself to be adept not only at political action but also at maintaining support during a very difficult period. It suggests that there is little point in underestimating his political instincts.”

Public opinion polls show that Carney continues to command the highest levels of trust among Canadians when it comes to guiding the country through economic uncertainty. But the prime minister has also accepted a role that would once have seemed almost incompatible with him: asking a country that is much smaller and weaker than its neighbor to stand firm and stand firm.

In a recent address he said:

“Canadians don't obey the weather - we thrive in it. We don't wait to see which way the wind blows. We don't let the waves blow us around, and therefore we don't let events toss us from side to side.

We set our own course. We create our own time. In Canada, we are masters in our own house, from coast to coast.”

Translation: NB