Carney’s Challenge: Steering Canada through Housing, Climate, and Trump’s Trade Storm

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On election night, Mark Carney stepped onto the stage with a blend of cautious optimism and measured pragmatism. As Canada’s new Prime Minister, the former Bank of Canada governor, UN climate envoy, and Brookfield executive and director offered a reassuring message to a nation facing multiple crises—economic, geopolitical, climatic, and notably, housing-related. The clarity of his victory underscored the sense of urgency among Canadians, who turned to Carney’s vision at a critical juncture.

Carney’s approach to energy policy is nuanced, reflecting Canada’s uncomfortable reality as a minor petrostate with significant fossil fuel exports. His victory speech embraced the controversial idea of Canada becoming a modern-day “energy superpower,” albeit one simultaneously invested in both traditional fossil fuels and emerging clean technologies. It’s an awkward balancing act, reflecting a political pragmatism forced by geography and entrenched industry interests.

On a note about awkward balancing acts, it’s been fascinating to watch Carney’s communication approaches. Strategically, his game was rock solid, but his execution has been occasionally flawed. I read his book, Values, and it’s excellent-ish. The timing was right, coming out in 2022 and providing deep insights into his world view. But while I deeply enjoyed the book, the first half was a wonkish explanation of economic and monetary theory history. For a nerd like me, it was great, but it wasn’t exactly Obama’s The Audacity of Hope.

Then he pre-announced his candidacy while bantering with Jon Stewart on The Daily Show, exchanging jokes and looking completely relaxed. Great venue, great progressive host, great presentation, but an American show. His campaign video with Mike Myers was brilliant. Carney has been mostly out of Canada since 2013, leaving him open to attacks on being a fly-in candidate, attacks that were incredibly successful against another Canadian PM candidate with an extraordinary foreign career, Michael Ignatieff. But Carney played the real Canadian, testing LA-based Canadian comic Myer’s Canadian-ness with a fun quiz beside an ice rink while wearing hockey jerseys. Carney actually plays Canada’s national game and spent a bit of time on ice with one of Canada’s national teams during the campaign, unlike his losing opponent Poilievre, who is rumored to not even be able to skate. That video ended with Carney and Myer’s leaning into the #ElbowsUp movement that’s so strong in Canada as Trump spouts his errant and threatening nonsense.

And then there’s the third-rail in Canadian politics: French and Quebec. Carney has clearly been working on his French, but he’s been in mostly London and New York for over a decade, and the working languages there aren’t Quebecois. Normally weak French is cause for outrage in Quebec, but in this case Quebecois had their elbows up too, and voted overwhelmingly for Carney and the Liberals, giving Carney a break for his linguistic and cultural stumbles. The Bloc Quebecois federal separatist party—yes, that’s a thing in Canada, avowed separatists sit in Parliament and help the creaking of democratic governance keep the country moving—lost seats despite trying to capitalize on Carney’s mangling of their language. But back to what Carney’s win portends.

Carney has pledged to build a trade and energy corridor—a grand vision designed to strengthen domestic infrastructure for transporting everything from oil and natural gas to electricity and critical minerals. The corridor’s intent is twofold: enhance energy security by reducing dependence on American markets and streamline approval processes by engaging Indigenous peoples meaningfully. Yet, it also underscores Canada’s persistent reliance on resource extraction—an economic and political necessity rather than an enthusiastic endorsement of fossil fuels.

Interestingly, a cross-Canada electricity grid is listed separately in the Liberal platform from the trade and energy corridor, as well as being implied to be part of it. That might be simply a platform edited in haste in the five week election cycle, or it might be significant, and only time will tell. My published opinion is that I’m okay with pipelines for gas and oil being included if they are required to sell a cross-Canada HVDC transmission link connecting every province, but want electrons to dominate over to-be-stranded molecule transmission assets. The Trans Mountain pipeline debacle is sucking $3 billion a year in new fossil fuel subsidies and I’m uninterested in subsidizing fossil fuels even more than Canada already does. Hopefully Carney and the Liberals will be able to avoid the trap that former Finance Minister Morneau got Trudeau and the Liberals into due to his Bay Street love of making a deal.

In parallel, Carney promises vigorous support for clean energy supply chains, proposing new federal funds aimed at critical minerals vital for electric vehicle batteries, renewable technologies, and other cleantech sectors. The proposed First and Last Mile Fund could genuinely accelerate Canada’s clean technology market, attracting private investment via targeted tax credits and mobilizing large-scale industrial investment through the Canada Growth Fund. It’s a nuanced position, simultaneously preparing Canada for a greener future while reluctantly embracing existing fossil infrastructure.

The critical minerals part is important. Canada has historically been a mining giant, and like the rest of the West, has let that lapse over the past few decades. Ontario’s Ring of Fire northern region is awash in vast mineral resources, but promises of road and rail links to unlock them have been unmet for decades. I was working on a proposal for a zero emissions, remotely operated mine plan a dozen years ago, one of thousands of bids that have never left the spreadsheets and engineering drawings stage. Carney’s plan does include lots of upskilling for trades, but not specifically for mining engineering and metallurgy, a big western gap I’ve been exploring recently, including with Gavin Mudd, director of the critical minerals intelligence centre in the British Geological Survey. While movement of critical minerals is in the trade and energy corridor portion of the platform, that appears not to be a new cross-Canada rail corridor, but new rail lines into the Ring of Fire and up to the Arctic, the latter likely part of the dream in Manitoba to be a new oil, gas and minerals export port in the melting Northwest Passage.

On climate, Carney tackled perhaps his most contentious campaign promise by abolishing the federal consumer carbon tax in his first days as Prime Minister, before calling the election itself—an immediate political salve addressing the affordability crisis. It’s a risky move that raises important questions about how Canada plans to meet its ambitious emissions targets without this proven policy lever. As I noted when Poilievre, the leader of the losing Conservatives, started attacking it with his jingoistic and simple-minded—but sadly effective—”Axe the Tax” messaging, Canada’s carbon pricing was working, so of course it had become a target.

Carney assures voters this is not a retreat from climate responsibility, reiterating commitments to industrial carbon pricing, a firm emissions cap on oil and gas, and aggressive mandates for zero-emission vehicles and net-zero electricity grids by 2035. The credibility of Carney’s climate strategy hinges on alternative mechanisms he’s promised but has not yet detailed. His plan to introduce “made-in-Canada” sustainable investment guidelines and issue billions annually in green transition bonds is made much more credible his financial acumen and ambition to leverage private-sector investment toward climate goals. Still, the actual impact of these financial instruments remains speculative.

I certainly trust his thinking on financing, which has been shaped by decades in top banking and investment roles in Toronto, London and New York, over Conservative leader Poilievre’s, which is shaped by the crypto currency YouTube videos he and his wife apparently like to watch at night. I wish I were making that up. Rarely has a Canadian major leader been so unfit to be a candidate for Prime Minister, never having worked outside of politics and only having on cabinet post for a few months in 20 years, spending his time being a rabid pit bull in Parliament, and he almost made it. Instead, like his Trump-lite counterpart Peter Dutton in Australia, he not only lost the election, he lost his seat. This is the first time Poilievre’s constituents in Carleton, the Ottawa suburb riding he’s held for 20 years, have had the opportunity to vote in a referendum on his cozying up to the invading force of truckers and anti-vaxxers that held Ottawa hostage for weeks in 2022, and they voted for the stay-at-home dad Liberal candidate by a wide margin. Unlike Dutton, who had the good grace to resign as party leader, Poilievre is trying to cling to power, but the long knives are out.

Carney’s Liberal platform promises substantial federal support to accelerate Canada’s shift toward electric vehicles. The government aims to significantly expand EV adoption by rolling out thousands of new charging stations nationwide, dramatically improving charging infrastructure to alleviate range anxiety and boost consumer confidence. Additionally, the Liberals have reaffirmed commitments to Canada’s zero-emission vehicle mandate, maintaining aggressive sales targets requiring 100% of new car sales to be electric by 2035.

The Liberal platform also has a clear emphasis on enhancing home energy efficiency through the adoption of heat pumps and the development of district heating systems. Recognizing the dual benefits of reducing greenhouse gas emissions and lowering household energy costs, the government plans to expand initiatives like the Canada Greener Homes Initiative, which provides financial support for homeowners to retrofit their homes with energy-efficient technologies, including heat pumps. Additionally, the platform outlines investments in modernizing and expanding district heating infrastructure, aiming to provide communities with sustainable and cost-effective heating solutions.

Carney’s climate platform also emphasizes adaptation and resilience, reflecting the growing reality of extreme weather events such as wildfires and flooding that Canadians now face regularly. Multiple towns have already been destroyed by climate-change fueled wildfires, including oil sands bedroom community Fort McMurray, tourist haven Jasper, both in Alberta and Lytton in BC, and rebuilding has been very, very slow. Ottawa itself has seen severe flooding and planned retreat in the region is moving residents and rewilding flood plains. Plans to establish a Youth Climate Corps for climate-related disaster recovery and to expand Indigenous-led conservation efforts add practical value, highlighting Carney’s understanding of climate policy as not purely emissions-driven but also focused on tangible, community-level outcomes. Such investments in local resilience and conservation not only benefit the environment but serve as strategic political moves that directly resonate with voters increasingly experiencing climate disruption firsthand. With luck, planned retreat will be more front and center, and the municipal guide on the subject I co-authored a few years ago will be leveraged. Certainly the housing strategy will have to avoid high-climate risk construction.

The economic context framing Carney’s election victory is stark, shaped largely by tensions with the U.S. under Donald Trump’s second presidency. The Trump administration’s renewed trade war has exposed Canada’s deep vulnerability to American economic dominance, driving Carney’s prioritization of national economic sovereignty. One of his first stated legislative priorities—removing interprovincial trade barriers—stands out as a long-overdue initiative promising genuine economic benefit by integrating fragmented regional markets. Carney asserts this internal economic integration could boost GDP by 5% by itself, effectively countering U.S. tariffs and interestingly being a boost on the scale of all of fossil fuel’s contributions to the economy.

Yet, realism tempers ambition. Carney has candidly acknowledged the profound challenges posed by this new era of economic nationalism. In early diplomatic outreach to Washington, Carney took a tough stance against Trump’s tariffs, emphasizing that Canada would respond robustly through domestic investment and trade diversification efforts with Europe and Asia. It’s an ambitious and perhaps risky approach, banking heavily on Canada’s ability to pivot swiftly and effectively toward less familiar international markets. How successful Carney can be, given parliamentary constraints and geopolitical realities, remains to be seen.

Housing policy, perhaps more than any other issue, has emerged as a litmus test for Carney’s premiership. The housing crisis was part of why Trudeau became so unpopular, blamed by the Conservatives for the decimation of federal housing initiatives that they had initiated of course. Carney frames Canada’s housing crisis as severe enough to warrant federal intervention at a level not seen since post-WWII reconstruction. His flagship initiative, Build Canada Homes (BCH), aims to double the current rate of housing construction to 500,000 a year using innovative methods, including modular construction and mass-timber technologies. The mass-timber element is especially promising, integrating climate and economic objectives by leveraging Canada’s abundant forestry resources to build faster, more sustainably, and cost-effectively. Carney has also proposed cutting the GST entirely for first-time homebuyers on new builds, significantly lowering initial costs and stimulating construction.

The reintroduction of tax incentives like the Multi-Unit Residential Building (MURB) program to spur rental construction represents another practical, economically sound strategy. By combining direct federal housing development, incentivizing private investment, and drastically streamlining municipal approvals and development fees, Carney’s housing plan attempts to overcome historical inertia that has kept Canada’s housing stock far behind demand. However, practical implementation will be critical. Municipal cooperation and private-sector responsiveness remain unpredictable, NIMBYs remain a significant problem in Canada’s cities and towns, and the scale of federal intervention Carney proposes is unprecedented in recent memory.

I’ll be following the intersection of MURBs, pre-fab and mass-timber construction for housing closely. In general in the west we’ve rather foolishly attempted to do pre-fab for individual homes instead of for modular MURBs. There’s a long history of that in Canada, as now defunct retail giant Sears used to sell home kits that would be delivered by rail and wagon a hundred years ago. Now we’re too affluent for that, and buyers want all the mod-cons in unique—but depressingly similar pastiche amalgam—homes, not well-aligned with pre-fab’s one-size-fits-all approaches and branding. However, MURBs are one of the places mass-timber, pre-fab construction shines. Canada’s vast forestry products can be shaped in factories into beams, walls and floors with all of the cut outs for doors and windows, and all of the routings for cables and pipes routered in, then delivered in a just-in-time approach for Lego-like construction. It’s one of the key levers in my cement decarbonization projection through 2100, second only to a reduction in total concrete use as China’s infrastructure boom ends and global population growth slows.

Ultimately, Carney’s victory signals a pivotal moment for Canada, a nation grappling simultaneously with geopolitical pressures, economic uncertainty, climate urgency, and a housing affordability crisis. His blend of pragmatic, ambitious policy-making reflects his belief that bold federal intervention, strategic investment, and national unity can address these multifaceted challenges effectively. Yet, parliamentary realities, provincial relations, Indigenous consent, and the practical complexities of economic diversification and large-scale infrastructure projects represent substantial hurdles. The challenges are non-trivial, but Carney dealt with the sub-prime mortgage meltdown and the beginnings of COVID as central banker. He’s adept at dealing with non-trivial problems. Canada chose wisely, although mostly because of our allergic reaction to Trump.