Good morning. When the Conservative Party gathers on Parliament Hill today to mark the 20th anniversary of the modern party’s first rise to power, the governing Liberals might have just as much reason to reflect on what came next. That’s in focus today – plus, the good news and bad news about Canada’s oil exports.
Up first
In the news
Pensions: The CAAT Pension Plan’s board chair has been suspended pending investigations into a deepening governance crisis at the $23.3-billion pension fund.
Acquisitions: Eldorado Gold Corp., a Vancouver-based company that owns multiple mines overseas, is buying Foran Mining Corp. for $3.8-billion.
Aerospace: Domestic manufacturers are struggling to find clarity after Trump’s threats to strip safety permits for Canadian-made planes.
Stephen Harper meets in 2011 with former finance minister Jim Flaherty and Mark Carney, who was then governor of the Bank of Canada.The Canadian Press
In focus
Paying it forward
Stephen Harper’s decade in office reshaped Canada’s trade architecture in ways that are proving vital to Prime Minister Mark Carney, whose efforts to forge new and deeper ties beyond North America are becoming urgent in the face of an isolationist United States. As Conservatives gather to celebrate a momentous 2006 election, I spoke with Harper biographer and long-time Globe journalist John Ibbitson about how the former prime minister’s economic legacy is shaping Canada’s response to a more hostile trading world.
If you look at Stephen Harper and Mark Carney side by side, do you see similarities in how they approach governing?
I think they’re remarkably similar, and they would probably agree that they’re remarkably similar. It was Stephen Harper who first said that Canada was an energy superpower. And what did Mark Carney start saying as soon as he became prime minister? Canada is an energy superpower. They both believe in Canada’s potential as a petrochemical state.
They’re also practical managers. The budget was balanced when Harper arrived. When the financial crisis came in 2008 and the G20 leaders agreed on stimulus, he took the budget back into deficit, then worked hard to get it back into balance by the time he left office. He was a conservative, but a practical conservative. He did what needed to be done.
When you think about Harper’s economic legacy, what stands out as most relevant today?
Certainly economic and industrial deregulation. Sound financial policy. And trade.
Let’s talk about that. How did Harper’s approach compare with earlier governments, and how are we seeing that legacy today?
Jean Chrétien didn’t really believe in free-trade agreements. He preferred multilateral agreements and didn’t particularly like one-on-one deals, so almost nothing got signed during those 10 years.
Paul Martin brought in economist David Emerson with a mandate to get things going. When Harper won two years later, he simply kept Emerson and gave him the same mandate.
Under Harper, Canada signed agreements with Israel and South Korea. He completed the South Korea agreement that we had almost won and then lost. He launched the negotiations that led to CETA, the trade pact with Europe. And he brought Canada into the Trans-Pacific Partnership.
So the trade diversification Mark Carney is pursuing today is very much the child of the diversification that Stephen Harper launched as prime minister.
Stephen Harper and Pierre Poilievre at a rally in Edmonton last April.JASON FRANSON/The Canadian Press
How did Harper think about Canada’s role in the world more generally?
Harper would have said he was not primarily a foreign-policy prime minister. He would have said he was dedicated to the federation and to the economy of the federation.
That said, Canada played a significant role internationally. He led the push to expel Vladimir Putin from the G8 after Ukraine. Canada played a front-line role in Afghanistan. We were a leader in Libya. Canada was one of the first countries to get aid to Haiti. But that was not how he primarily defined his job.
How does that compare with Carney?
Carney sees himself as an architect of a new world order, based on the absence of the United States as the leader of that order. Harper did not see himself that way.
You’ve talked before about Harper’s approach to federal-provincial relations. How central was that to his governing philosophy?
Harper believed that the best way to keep the country functioning was for Ottawa to stay within its constitutional mandate and not interfere in provincial jurisdiction. In my lifetime, it was the only period I can remember when there was no major existential crisis in federalism.
The Parti Québécois even won government and then probably lost it because they had nothing to push against. Harper was giving Quebec and every other province full room to exercise its jurisdiction.
Do we know yet where Carney falls on that spectrum?
The jury is still out. Housing may answer that question. Health care may answer it. If Carney tries to compel provinces or municipalities to do things through federal rules, that would be very un-Harper-like.
We’ve talked about trade, but you also mentioned similarities in how Harper and Carney approached federal spending. That’s not a question, but can we pretend it is?
(Laughs politely.) Harper reduced the size of the public service largely through attrition. It wasn’t dramatic in the early years. Where he really showed discipline was after the financial crisis. Once the stimulus period ended, his government capped federal spending growth at around 2 per cent.
I remember talking to the chief economist of a major bank around 2011 or 2012. He said, “Do you have any idea how hard it is to cap federal spending at 2 per cent?” You really have to turn the screws to keep the federal government operating within inflation. But they did it.
In your view, how does that compare with what Carney is doing now?
Carney is dealing with a much larger public service than Harper did. Harper did it after stimulus measures. Carney is doing it under different circumstances.
Watching Pierre Poilievre at the party’s leadership review this weekend, I was thinking about out how he moves forward. What does he do if Carney is governing in a way Harper might have?
You need to look at two speeches. Carney’s Davos speech laid out a vision of a post-American world order, where middle powers work together. If the next election is about Canada’s place in the world and the threat posed by Donald Trump, that speech could be foundational.
Poilievre’s speech focused on affordability – groceries, housing, economic insecurity – without mentioning Trump. If the election is about economic anxiety and the need for change, that speech could be just as powerful. They are two very different priorities.
Charted
Oil’s well?
The share of Canada’s crude petroleum flowing to countries other than the U.S. hit an all-time high in November, topping the previous month’s record, as the Trans Mountain pipeline boosted Canada’s trade diversification efforts.
But while the latest trade numbers from Statistics Canada show the pivot away from the U.S. is working, Jason Kirby writes, the gains elsewhere have not been enough to make up for slumping demand from south of the border.
Quoted
Fans embraced us, and we loved them right back. This statue is for the fans.
— Joe Carter
The Blue Jays legend will be honoured with a statue outside Toronto’s Rogers Centre.
Up next
More files we’re following
On trial: What to know as Frank Stronach prepares to stand trial on sexual assault charges.
In Washington: How soon before Trump dubs Kevin Warsh ‘clueless’? (And is there a Polymarket play for that?)
In the ground: Copper’s slide from record-high prices reflects the reality of weak demand and rising stocks, analysts say.
Morning update
Global stocks rose after a three-day decline, with investor confidence picking up after gold recovered some lost ground and a long-awaited trade deal between the United States and India.
Wall Street futures were mixed, while TSX futures were in positive territory as commodity prices improved.
Overseas, the pan-European STOXX 600 was up 0.19 per cent in morning trading. Britain’s FTSE 100 eased 0.4 per cent, Germany’s DAX gained 0.26 per cent and France’s CAC 40 advanced 0.03 per cent.
In Asia, Japan’s Nikkei reached a new record high, closing up 3.92 per cent, while Hong Kong’s Hang Seng climbed 0.22 per cent.
The Canadian dollar traded at 73.11 U.S. cents.