A Stunning Comeback: Mark Carney Elected Prime Minister
Congratulations to Prime Minister elect Mark Carney! His victory (at present narrowly short of a majority) will go down in Canadian history books as the most remarkable recovery in political fortunes. Bravo!
He might not have been on the ballot, but this election was all about President Donald Trump. Canada will soon discover whether Carney can earn the confidence that the country has expressed in him. I don’t envy him. His challenges are not confined to those at our southern border.
Divided Nation: Alberta’s Growing Discontent
The country is dangerously divided between the east and west. While central Canada may not want to hear about it, Premiere Smith has announced changes to its election laws that lowers the bar for referendum questions. Preston Manning has stepped back on the stage musing about creating the Canada West Assembly—which purports to be a democratic forum designed to evaluate the region’s future within or possibly outside of Confederation. Clearly the West is preparing the battlefield for Carney’s Throne Speech.
I’m well-aware that many Canadians are exasperated with separation threats, so I won’t dwell on this except to point out Alberta’s exit from Canada would be an even greater existential economic risk for the nation than Quebec’s as this chart illustrates:
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Economic Reality Check: Canada’s Fiscal Warnings MountThe Prime Minister’s problems don’t end there. A day after the election, the bond rating company FitchRatings cautions:
FitchRatings’ warning follows hot on the heels of downgrades of British Columbia (March 2025) and Quebec (April 2025). Scotiabank and others warn that a recession could dramatically worsen the already strained outlook. Can Carney Calm the Currency and Keep Investors Confident?Prime Minister Carney’s background as a central banker equips him well for these issues. Canadians should keep an eye on the Loonie as a report card for his success. Currently, the surprising weakness of the U.S. dollar has provided a welcome relief to longer term weakness. That respite disappears when compared with the Euro (or other currencies):
Charts courtesy of StockCharts.com Looking Ahead: Calm Before the Storm or a Turning Point?Against this backdrop, the Canadian Stock Market has performed admirably, confirming a central truth of investing—the stock market is not the economy! Time will tell whether our new Prime Minister can spin all these plates or whether this is the calm before the storm for Canadian investors. President Trump managed to do something that few Canadian politicians have been able to do in my lifetime—rekindle Canadian national pride! As proud Canadians, Briana and I wish our new Prime Minister success in his endeavours to equip this great country for an uncertain future.
Glen |
