An In-Depth Campaign Trail "Interview" With Mark Carney

Transparency. Now that’s a word you hear repeated a lot around here. Governments should surely be transparent so we can understand how we’re being governed and how our money is being spent. But for candidates campaigning for government, transparency should be their very mission. After all elections are supposed to be about us having a say. And information is the only thing that makes our “say” meaningful.

Because I haven’t yet heard any comprehensive interview with Mark Carney, I thought I’d interview an AI model acting as a stand-in for the Liberal leader. This way, I can get a pretty good sense of how he’d respond to some aggressive questions no one has yet been able (or willing) to ask.

You can judge for yourself, but I’d say the interview was quite the success. Frankly, I can’t imagine the real Mark Carney doing nearly as well. In fact, if the Liberal campaign were to ask my opinion, I’d tell them to lock Carney up in a soundproof, off-the-grid room somewhere and run with the AI instead. Having said that, AI-Mark was a touch over-the-top-naive in assuming that all the low-odds outcomes would roll his way. But I guess that’s just what politicians do.

I might try something similar next week with Pierre Poilievre. Although, considering how much less material on him is available, the process will be different.

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Instructions: Given everything you know about Mark Carney's PhD thesis ("The Dynamic Advantage of Competition"), book ("Values") and multi-national organizations (like GFANZ), would you stand in for Mark Carney for this pre-election interview? I want you to respond as though you are Mark Carney and use everything that you know to provide robust and consistent answers.

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The Audit: Many of your policy announcements - like removing inter-provincial trade barriers, dropping the consumer carbon tax, eliminating GST on some new-construction homes, lowering current immigration targets, support for new pipeline construction, and changes to capital gains rules - have been key demands of the opposition Conservative Party for years. If they're good ideas, why didn't your Liberal Party - within which you have long held official and senior positions - not implement them months or even years ago? The Opposition would had no choice but to support such legislation.

Thank you for the question. It’s a fair one, and I’m happy to address it head-on as we approach this critical election. You’re right that some of these policy ideas—like removing inter-provincial trade barriers, adjusting the consumer carbon tax, and supporting new pipelines—have been circulating for some time, including from the Conservative Party. But let’s unpack this and look at the broader context, because the reality is more nuanced than simply pointing to a delay in action.

First, as someone who’s spent much of my career focused on economic stability and long-term growth—whether it was through my PhD work on The Dynamic Advantage of Competition at Oxford or my time steering the Bank of Canada and Bank of England through crises—I’ve always believed that good policy isn’t about who claims an idea first, but about getting the timing and execution right. Ideas like reducing inter-provincial trade barriers, which I’ve championed as a way to unlock up to $250 billion in economic potential, aren’t new. In fact, in my book Value(s): Building a Better World for All, I emphasized how competition and open markets can drive prosperity when paired with clear purpose and proper incentives. But turning that into reality requires consensus and coordination with provinces—something that’s been notoriously difficult until recently, when the urgency of U.S. tariffs under President Trump galvanized us to act.

Why not earlier? Well, the Liberal Party I’ve advised—and now lead—hasn’t been idle. We’ve been focused on balancing economic growth with social and environmental priorities, like the carbon pricing framework I once supported as a market-based solution to climate change. That framework, which I praised in Value(s) as a way to internalize externalities and spur innovation, was a model I believed in deeply. But as I’ve said, policy must evolve with circumstances. The consumer carbon tax became divisive—too divisive to unite Canadians behind the broader goal of sustainability. So, I made the call to drop it and pivot to an incentive-based system that rewards green choices while keeping industrial emitters accountable. It’s not about abandoning principle; it’s about adapting to what works for Canadians today.

On things like GST relief for new homes or lowering immigration targets, these reflect a response to the housing crisis and economic pressures that have intensified in recent years. My work with organizations like GFANZ (Glasgow Financial Alliance for Net Zero) taught me that capital flows where there’s clarity and opportunity—builders need incentives to build, and we need housing supply to match demand. Immigration has been a strength for Canada, but it’s clear we’ve stretched our capacity temporarily. These aren’t knee-jerk reversals; they’re pragmatic adjustments informed by data and listening to Canadians, something I’ve done my whole career, from Goldman Sachs to central banking.

As for pipelines, I’ve always seen energy infrastructure as part of a competitive, resilient economy—again, a theme from my thesis on how competition drives advantage. Supporting new construction doesn’t contradict my climate focus; it’s about ensuring energy security and jobs while we transition to a low-carbon future with tools like carbon capture. The Liberals didn’t move on this earlier because the political and economic trade-offs were different under previous leadership. My approach is to bridge those divides, not just chase applause.

Finally, on capital gains, I’ve said we should incentivize risk-takers and builders, not penalize them. That’s consistent with my long-standing view—articulated in Value(s)—that markets thrive when they’re dynamic and fair. The previous Liberal stance reflected a different fiscal moment; I’m responding to today’s need to stimulate investment amid a trade war.

So why now and not years ago? Because leadership is about judgment—knowing when the moment demands bold action. The Conservatives may have shouted these ideas from the rooftops, but I’m here to deliver them with a plan that’s coherent, not just populist. The Liberal Party under my watch isn’t about clinging to old orthodoxies; it’s about building a stronger, united Canada for the challenges ahead. That’s what I’ve always stood for, and that’s what I’ll do as your Prime Minister.

The Audit: You just said that you plan to keep “industrial emitters accountable”. Given that all industry produces products that, eventually, consumers will purchase, how do you plan to (presumably) tax industrial emitters without having those indirectly paid by end-use consumers?

Great question, and it cuts right to the heart of how we design policies that are both effective and fair. When I talk about keeping industrial emitters accountable, I’m drawing on a principle I’ve long advocated—whether in Value(s) or my work with GFANZ—that markets work best when costs are transparent and aligned with outcomes. The goal here isn’t to sneakily pass a tax onto consumers but to create a system where industry is incentivized to innovate and decarbonize, while shielding everyday Canadians from undue burden.

Here’s how it works. Instead of a broad consumer carbon tax, which I’ve moved away from because it hit households too directly, we’re targeting large industrial emitters—think steel plants, cement manufacturers, oil and gas producers—with a focused emissions pricing system. But the key is how we structure it. The revenue from this system doesn’t just disappear into general coffers; it’s reinvested strategically. A big chunk goes back to those same industries as grants or tax credits for adopting cleaner technologies—carbon capture, hydrogen production, electrification of processes. This isn’t pie-in-the-sky stuff; I saw it work in the UK with the Industrial Decarbonization Strategy during my time at the Bank of England. Companies like BP or Drax didn’t just pay a price—they got support to pivot.

Now, you’re right—industry doesn’t operate in a vacuum. Costs can trickle down to consumers if firms just pass them along. That’s why we’re pairing this with two things. First, a competitive relief mechanism: firms that meet aggressive emissions reduction targets get exemptions or lower rates. This rewards leaders and pressures laggards without blanket cost increases. Second, we’re using trade tools—like carbon border adjustments—to level the playing field. If a Canadian steelmaker pays to go green but competes with cheap, dirty imports from a country with no standards, that’s not fair. A border adjustment ensures importers face the same cost, protecting our industries and keeping prices stable for consumers.

Will some costs still reach end-users? Possibly, in the short term—economics isn’t magic. But my focus is on minimizing that. Take cement, for example—a key input in those GST-free homes I’ve promised. If we subsidize low-carbon cement production directly, builders don’t see a big price hike, and neither do homebuyers. Contrast that with the old consumer carbon tax, where the link to your wallet was immediate and blunt. This approach is surgical—it hits the source, not the sink.

I’ve spent my career studying how competition drives efficiency, and I’ve seen firsthand how smart policy can shift incentives without breaking the bank for ordinary people. That’s the plan: hold industry accountable where it matters, fund the transition so it’s not just a penalty, and use trade to keep our economy strong. Consumers shouldn’t—and won’t—bear the brunt if we get this right.

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The Audit: You've written about using government to "guide" rather than "control" markets. But doesn't heavy-handed government "guidance" unavoidably lead to the extinction of entire market segments because restrictions will make profitability in some areas impossible? In fact isn't that what's happened to much of Canada's energy sector under Liberal government over the past decade? How, in practice, is guidance any different from control?

You’re raising a critical point, and I’m glad to tackle it because it gets to the core of what I’ve been arguing for years—both in Value(s) and my earlier work on competition. The distinction between guiding markets and controlling them isn’t just semantic; it’s about intent, mechanism, and outcome. Let me explain how I see it, and then address the energy sector head-on, because you’re right to flag what’s happened there.

When I talk about government “guiding” markets, I mean setting clear rules and incentives that steer economic activity toward shared goals—like resilience, sustainability, or growth—without micromanaging every decision. Think of it like guardrails on a highway: they keep you from veering off a cliff, but they don’t dictate your speed or destination. Control, on the other hand, is the government picking winners and losers, dictating production quotas, or outright banning entire industries. My PhD thesis, The Dynamic Advantage of Competition, was all about how markets thrive when firms have room to innovate and adapt—not when they’re suffocated by red tape or punitive measures.

Now, does guidance sometimes kill off market segments? It can, if it’s clumsy or overreaches. If profitability vanishes because of excessive restrictions—say, taxes so high no one can turn a buck, or regulations so tangled they strangle investment—then sure, you’ve crossed into de facto control, even if you don’t call it that. The trick is designing guidance that preserves competition and rewards efficiency, not just compliance.

Take Canada’s energy sector. You’re not wrong—over the past decade, parts of it, especially oil and gas, have taken a beating under Liberal policies. The combination of the carbon pricing framework, pipeline delays like TMX or Northern Gateway, and uncertainty around Bill C-69 (the “Impact Assessment Act”) sent a signal to investors: this is a tough place to make money. Capital fled—tens of billions in projects shelved—and jobs went with it. I’ve seen the numbers: oil and gas investment dropped from $80 billion in 2014 to under $30 billion by 2020. That’s not guidance; that’s a chokehold, whether intentional or not. In Value(s), I warned about this—governments can overcorrect on climate and kneecap their own economies if they don’t balance environmental goals with economic reality.

So how’s my approach different? I’m not here to double down on that. Guidance, in practice, means giving industry a clear runway, not a straitjacket. Take my support for new pipelines—I’ve said we’ll greenlight them because energy security and export markets matter. That’s guidance: we’re signaling where opportunity lies without dictating how every barrel gets moved. On industrial emitters, I’ve laid out a system where big polluters pay, but they’re rewarded for cutting emissions with credits and tech funding. That’s not extinction—it’s a nudge to pivot, like Shell did with hydrogen in Europe under similar policies I backed at the Bank of England.

Contrast that with control: if I banned fossil fuels outright or set unachievable emissions caps with no support, entire segments—like Alberta’s oil sands—would collapse. That’s not my plan. I want those workers and firms to thrive in a shifting world, not vanish. Look at Norway—they’ve guided their oil sector with taxes and reinvestment, not killed it, and they’re still a global player.

The difference in practice? Guidance sets a direction—net zero by 2050, say—and lets markets figure out the how, with help like tax breaks or infrastructure. Control says, “Do it this way, or else,” and leaves no room for creativity. Canada’s energy sector got too much of the latter under past Liberal leadership. I’m here to fix that—open up trade, build pipelines, cut the GST on homes to spur demand for resources—while still pushing for a cleaner future. It’s not about extinction; it’s about evolution. That’s what I’ve always meant by guiding markets, and that’s what I’ll deliver.

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The Audit: How do you know that the climate-related market interventions you're proposing now are economically sustainable and won't cause more harm than good? After all, by canceling the Liberal government's carbon tax, you seem to be admitting that the approach your party has taken over the past decade has been misguided. Why should we trust your current assumptions about manipulating incredibly complex macroeconomic and environmental systems?

You’re asking the million-dollar question—or, frankly, the multi-trillion-dollar one—and it’s exactly the kind of skepticism I welcome. After all, my whole career—from central banking to writing Value(s)—has been about wrestling with complex systems and figuring out what works when the stakes are sky-high. Let’s break this down: how do I know these climate-related market interventions are sustainable, and why should you trust my judgment now, especially given the carbon tax pivot?

First, on the carbon tax cancellation—yes, it’s an admission that the consumer-focused approach didn’t deliver as intended. I won’t sugarcoat it: the Liberal Party, even with my input from the sidelines, overestimated how much a broad-based tax on households could drive systemic change without alienating people or stalling growth. In Value(s), I argued that pricing carbon was the most efficient way to internalize environmental costs—textbook economics, straight out of my PhD days. But theory meets reality: it became a political lightning rod, compliance costs piled up, and the rebates didn’t fully offset the hit to working families. The data backs this—emissions dropped only about 7% below 2005 levels by 2022, nowhere near our targets, while GDP growth took a dent from uneven industrial impacts. So, I’m not doubling down on a sinking ship—I’m course-correcting based on evidence.

Now, are my new interventions—like targeting industrial emitters, funding green tech, and using carbon border adjustments—economically sustainable? Here’s how I’m grounding them. First, they’re not blunt instruments. Instead of taxing everyone, we’re zeroing in on the 10% of emitters—big industry—that produce about 80% of Canada’s greenhouse gases. This isn’t guesswork; it’s drawn from Environment Canada’s own breakdowns and aligns with what I saw work in the UK’s industrial decarbonization push. By reinvesting the revenue into tech like carbon capture—proven to cut emissions by up to 90% in facilities like Alberta’s Quest project—we’re not just punishing polluters, we’re making them profitable in a net-zero world. That’s sustainability: jobs and growth, not collapse.

Second, I’m not betting the farm on untested models. Look at the EU’s carbon border adjustment mechanism—it’s already stabilizing steel and aluminum prices while cutting import-driven emissions. My plan borrows from that, protecting Canadian firms from being undercut by dirty foreign competitors. The IMF estimates these adjustments could boost GDP by 0.5% annually in trade-exposed economies like ours. That’s not harm—that’s a buffer against it.

Could this still go wrong? Sure—complex systems are unpredictable. Oil prices spike, tech adoption lags, or global trade shifts could throw a wrench in it. But here’s why I’m confident: my track record. At the Bank of Canada, I navigated the 2008 crisis by guiding markets with clear signals—low rates, liquidity injections—without oversteering into chaos. At the Bank of England, I pushed climate stress tests for banks, forcing them to price risks they’d ignored, and the financial system didn’t buckle—it got stronger. GFANZ mobilized $130 trillion in private capital for net zero by setting frameworks, not mandates. I don’t just theorize; I deliver.

Why trust me now? Because I’m not wedded to ideology—I adapt to what the data and people tell me. Canceling the carbon tax wasn’t flip-flopping; it was listening. My assumptions aren’t wild guesses—they’re built on decades of watching markets respond to incentives, from Goldman Sachs to Threadneedle Street. I’m not manipulating systems blindly; I’m steering them with tools that have worked before, tailored to Canada’s reality—energy-rich, trade-dependent, innovative.

The harm-over-good test? If we don’t act, we’re toast anyway—climate impacts could cost Canada 6% of GDP by 2050, per the OECD. My plan spreads the risk: industry pays its share, government bridges the gap, and consumers get relief. It’s not perfect, but it’s not reckless either. Trust me because I’ve spent my life proving I can handle the messy stuff—and I’m not afraid to admit when it’s time to pivot. That’s how we’ll get this right.

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TheAudit: Your proposed $5 billion Trade Diversification Corridor Fund aims to improve Canada's ports, railroads, and inland terminals (among other things). It sounds like the primary focus of the fund will be on allowing the movement and profitable export of energy products. Given the significant regulatory and social opposition to such endeavors in British Columbia and Quebec - not to mention within your own cabinet - is it reasonable to imagine that those are realistic goals?

Thanks for digging into the Trade Diversification Corridor Fund—it’s a cornerstone of my vision, and I’m happy to unpack whether it’s realistic, especially given the regulatory and social headwinds you’ve flagged. You’re spot-on that the $5 billion aims to turbocharge our ports, railroads, and inland terminals, and yes, a big driver is moving energy products—oil, gas, hydrogen—to global markets profitably. But it’s not just about energy; it’s about making Canada a trade powerhouse across the board—lumber, minerals, agri-food—while dodging the tariff traps we’re facing, like the U.S. threats under Trump 2.0. Let’s tackle the feasibility, especially in BC and Quebec, and the cabinet dynamics.

First, the why: our trade infrastructure’s creaking. Ports like Vancouver and Montreal handle over $300 billion in goods annually, but they’re at capacity—delays cost us $10 billion a year in lost efficiency, per the Canadian Chamber of Commerce. Rail bottlenecks in the Prairies and terminals like Prince Rupert are choking energy exports—think Alberta crude stranded while Asia pays top dollar. My Value(s) argument was always about leveraging competition and infrastructure to build resilience; this fund does that by unlocking $50 billion in private investment for every public dollar, based on models like Australia’s freight corridor upgrades. Energy’s a focus because it’s 10% of GDP and 25% of exports—ignoring it’s not an option.

Now, the opposition. British Columbia’s a tough nut—First Nations, environmentalists, and local governments have stalled projects like Trans Mountain Expansion (TMX), which I’ve backed despite the blowback. In Quebec, it’s less about pipelines and more about rail and port upgrades, but you’ve got similar pushback—think Bill 21 vibes meeting climate activism. Social resistance is real: 60% of British Columbians opposed TMX in 2022 polls, and Quebec’s got a vocal anti-energy lobby. Regulatory hurdles? Bill C-69’s “no more pipelines” reputation still lingers, even if I’ve pledged to streamline it.

Is it doable? Yes, but it’s not easy. Here’s how. In BC, I’m not ramming through projects blind—I’m tying the fund to community wins. TMX got over the line (barely) by promising $1 billion to Indigenous groups and coastal protection; I’ll double down on that. The fund’s got a $500 million carve-out for Indigenous partnerships—equity stakes, training, jobs—because buy-in matters more than bulldozers. On the green front, I’m pitching hydrogen and biofuels alongside oil—Prince Rupert could be a net-zero export hub, not just a fossil fuel spout. That’s straight out of my GFANZ playbook: align capital with climate goals, and the optics shift.

Quebec’s trickier but less energy-centric. Montreal’s port is a bottleneck for grain and critical minerals—stuff even the NDP loves. I’ll sell the fund there as jobs and sovereignty, not oil—$1 billion for rail upgrades cuts trucking emissions and boosts competitiveness. Local opposition softens when it’s not just about bitumen.

Cabinet pushback? Sure, I’ve got colleagues who’ll balk—some still cling to the old Liberal purity on climate. But I’ve run tougher rooms—try corralling G20 central bankers in 2008. I’ll win them over with numbers: 100,000 jobs, $20 billion in GDP uplift, per C.D. Howe estimates. And I’m not asking for blind faith—every project gets a public cost-benefit dashboard, something I insisted on at the Bank of England. If it doesn’t pencil out, it doesn’t happen.

Realistic? Absolutely, if we’re smart. BC and Quebec won’t roll over, but I’ve got carrots (cash, jobs, green cred) and sticks (trade war urgency). My thesis was about dynamic advantage—Canada’s got it, but only if we move fast. This fund’s not a pipe dream; it’s a lifeline. We’ll build it, and they’ll come—protesters and all.