PM Carney’s new cabinet filling – a reflection of fiscal urgency, executives say
Prime Minister Mark Carney has remade the economic core of his cabinet by filling key roles with ministers who are expected to follow his lead in rapidly reshaping Canada’s economy − balancing experience with fresh faces who bring financial know-how.
Business leaders who felt ignored and shut out under the previous government said Mr. Carney‘s cabinet looks different enough and now feel cautiously encouraged that the government should have a sharper focus on economic growth and productivity.
Some coveted economic portfolios went to long-serving members of the Liberal cabinet, with François-Philippe Champagne keeping his new role as Finance Minister, Dominic LeBlanc taking on the all-important Canada-U.S. trade file, and Mélanie Joly appointed Minister of Industry after her stint at Foreign Affairs.
Any wariness rippling across Bay Street that Mr. Carney’s front bench still resembles Justin Trudeau’s was largely drowned out by a sense that the rookie Prime Minister has surrounded himself with experience in Ottawa that he will need to rely on. And most business leaders expect that Mr. Carney himself will be firmly in charge of economic decision-making.
“It‘s very clear that Prime Minister Carney is laser-focused on the economy,” Frank McKenna, deputy chair of TD Securities and a former Liberal premier of New Brunswick, said in an interview.
“I think he gave very careful consideration to the key economic ministries because that is going to be the calling card of this government for the next several years,” he added.
The one thing in short supply on Bay Street is patience − and Mr. Carney appears to share their sense of urgency. The private sector expects Canada to act fast to boost growth, diversify trade, get energy projects built and restore a measure of fiscal discipline to the public purse.
Mr. Carney is signalling that he believes Canada can manage the changing trade relationship with the United States, in spite of the chaos created by President Donald Trump’s tariffs. Still, Mr. Carney is making it clear to his ministers that Canada needs to be transformed.
“They’ve been told it‘s a sprint, not a marathon: ‘Get your running shoes on,’ ” Mr. McKenna said.
The Globe and Mail spoke to 20 business leaders and advisers on Tuesday and is not identifying some of them as they were not authorized to speak publicly.
The litmus test for businesses will be whether the government gets things done in short order. Some business leaders are waiting to see the next federal budget before passing judgment and will be looking for evidence of renewed fiscal discipline, as well as concrete measures to jump-start economic activity.
The Canadian Chamber of Commerce stressed in a statement that, “right now, the business of government must be business.”
Executives took comfort that there were no major surprises in the key roles that shape the business climate and conditions for markets.
“Carney will likely play a central role on economic matters, and that will likely tell the story more than which faces are in which portfolios,” Canadian Imperial Bank of Commerce chief economist Avery Shenfeld said in an e-mail.
Goldy Hyder, president of the Business Council of Canada, said he’s encouraged by the mix of experience and freshness in the federal cabinet.
Many Canadian business leaders also said they are optimistic that the new government will be more responsive and willing to hear them out. Mr. Hyder said he’s already seeing a change in relationship.
“I think I’ve had more communications with the government in 100 days than I had in 10 years. And it was not always me the one calling,” Mr. Hyder said.
“That is in itself a great indication that there is a genuine interest and understanding and recognition of the importance of the role of large employers in Canada,” he said.
Multiple business leaders said they think Mr. Champagne is the right choice to lead Finance. He was a capable industry minister, who showed a knack for working a business crowd, building the strongest ties with Bay Street of any previous Liberal minister.
There is still an expectation that Mr. Carney will make the biggest decisions on the Finance file, and business leaders speculated that he chose Mr. Champagne to be a lieutenant who will follow the Prime Minister’s lead.
“I think it‘s critical that Finance has somebody who’s really experienced,” said Matthew Holmes, chief of public policy at the Chamber of Commerce.
The biggest question on Bay Street is how Ms. Joly will approach the Industry portfolio. She is not well known in the business community, nor does she have deep experience with the major sectors that drive Canada’s economy. But the business leaders say she has steadily taken on more responsibility in cabinet, without any obvious fumbles, and won Mr. Carney’s trust.
“Right now, the big job that Prime Minister Carney has for her is to be at centre ice in transitioning the Canadian economy,” Mr. McKenna said.
“I think she relishes the idea of having an economic portfolio. She’s an entrepreneur herself, she comes from an entrepreneurial family. She’s very pro-business and she’s whip-smart.”
The new face in government who is a familiar face with Canada’s top executives is Tim Hodgson, the Energy and Natural Resources Minister.
He is close with Mr. Carney and advised him when he was governor of the Bank of Canada. Mr. Hodgson has hands-on experience in energy as chair of Ontario power provider Hydro One Ltd., a board member for oil sands producer MEG Energy and a former investment banker at Goldman Sachs.
He was also on the board of major Canadian pension funds − most recently Ontario Teachers’ Pension Plan − that invest heavily in conventional and renewable energy.
Multiple executives said Mr. Hodgson brings no baggage to the Energy portfolio, and some see his elevation to the job as an olive branch to Western Canada. Some energy leaders were quietly hoping he would get the job.
Others lamented that Mr. Carney didn’t choose a Western MP to lead the file, and worried that Mr. Hodgson’s very matter-of-fact style may not mesh with Western premiers such as Alberta’s Danielle Smith.
Bay Street broadly welcomed Mr. LeBlanc adding responsibility for Canada-U.S. trade, and were relieved that there will be continuity in the team that has dealt directly with Mr. Trump’s administration. Mr. LeBlanc is known to be one of the Liberals’ most-skilled relationship builders and communicators.
Mr. Hyder said he is pleased to see Mr. LeBlanc remain in charge of intergovernmental affairs while taking on the U.S. trade portfolio.
“I think he has the right persona to manage the premiers and to manage the U.S. administration,” Mr. Hyder said.
Several business leaders with political connections − both Conservative and Liberal − were surprised by Mr. Carney’s decision to leave rookie MP Carlos Leitão out of cabinet. Mr. Leitão was Quebec’s minister of finance from 2014 to 2018, and spent decades at Royal Bank of Canada as well as Laurentian Bank of Canada, where he was chief economist.
Two executives, one of whom worked with Mr. Leitão, said he earned former prime minister Stephen Harper’s respect when he was leading Quebec’s finance ministry, and was well regarded in the banking community as an economist.
This article was first reported by The Globe and Mail
