Mark Carney’s first year: A promising start…with the hard part still ahead

As published on Substack

Mark Carney’s first year as Prime Minister can best be described as one defined more by direction than by deliverables. That is not a criticism; it reflects the difficulty of this moment of geopolitical turbulence, economic uncertainty and a Canadian federation that often moves slower than events demand.

Carney has approached his job like a policymaker confronting structural challenges. Whether on economic growth, trade diversification or industrial competitiveness, his government has signaled that it intends to shift Canada’s economic trajectory rather than simply manage the status quo.

The first visible shift has been ideological. Under Carney, the Liberal Party has moved back toward the political centre. In doing so, many aspects of the policy framework associated with the Trudeau era are being dismantled, particularly where economic competitiveness is concerned.

The emphasis now is less on symbolic policy debates and more on practical economic outcomes: growth, investment, infrastructure and productivity. This recalibration reflects an underlying recognition that Canada faces a new economic reality.

For decades, Canada benefited from a relatively simple formula: a stable domestic policy environment combined with privileged access to the United States market. That formula helped attract investment and supported millions of middle-class jobs. But the global landscape has changed. Competition among great powers has intensified, supply chains are being reorganized and economic security has become inseparable from national security.

Over the last year, and most notably in a speech at the World Economic Forum in January, Carney has made it clear that Canada must adapt.

His government has placed a heavy emphasis on trade-enabling infrastructure and investment attraction, with ambitious goals for capital inflows and major projects.

New institutional structures, including agencies focused on major projects, defence procurement and housing construction, signal a willingness to experiment with how government operates in order to accelerate decision-making.

In short, the Prime Minister is attempting to move Canada from a country that debates infrastructure to one that actually builds it.

Yet this is precisely where Carney’s leadership will experience its first real test.

Ambition is easy to announce. Execution is much harder in Canada.

Major infrastructure projects face a complex web of regulatory processes, provincial and municipal interests, Indigenous consultations, and capital constraints. The federal government does not control all the levers required to build pipelines, expand ports or develop critical mineral deposits. Even when there is broad public support, projects can often take years, sometimes decades, to move from announcement to completion.

The success of Carney’s economic strategy will ultimately be judged not by plans but by tangible outcomes: new export capacity, faster project approvals, visible improvements in Canada’s investment climate, all leading to better jobs and more prosperity for Canadians.

Of course, the geopolitical environment has both spurred on and complicated Carney’s agenda.

He won an election last April with the promise of taking a tough stance on threatening rhetoric emanating from the United States. Tariffs and threats to Canadian sovereignty have strengthened public support for diversification. In many ways, this shift has given the Prime Minister political space to pursue policies aimed at strengthening Canada’s economic resilience.

But emotion should not drive strategy.

Canada’s economic reality remains clear: the United States is by far our largest trading partner and will remain so for the foreseeable future. The Canada-United States-Mexico Agreement (USMCA) continues to underpin much of Canada’s prosperity, supporting millions of jobs and anchoring investment decisions across the country.

Diversification is an important goal. But it is not a substitute for a stable North American economic framework.

At some point, the Prime Minister will need to articulate this balance more clearly. Canada can and should expand its trade relationships across Europe, Asia and other middle-power economies. Yet maintaining constructive economic relations with the United States will remain essential to Canadian prosperity.

Managing the dual reality of diversification without delusion will be one of the defining challenges of Carney’s time in office.

Another challenge lies closer to home.

Canada’s federation can be both a strength and a constraint. Provincial and territorial governments guard their jurisdictions vigorously and national projects often require delicate negotiations among multiple governments with competing priorities. Carney has shown an openness to engaging premiers and encouraging cooperation. But cooperation alone may not always be enough.

Carney must be willing to exercise federal authority when the national interest demands it.

To be fair, he has already shown signs of political courage. His willingness to pursue energy infrastructure that benefits Western Canada, despite limited political upside for his party in that region, suggests a prime minister willing to prioritize national interest over narrow partisan calculations.

That instinct is both refreshing and necessary.

Still, the hardest phase of any government comes after the early momentum fades.

The first year is about setting direction. The second and third years are about delivery.

Governing Canada requires building coalitions across regions, persuading a skeptical public and navigating a federation that rarely moves quickly.

Carney has begun redefining the conversation about Canada’s economic future and repositioning the country for a more competitive and uncertain world.

But the real measure of success will not be found in speeches, frameworks, or even budgets.

It will be found in steel in the ground, investment flowing into the country, good-paying jobs and a Canadian economy that grows stronger, more resilient, and more confident in the years ahead.

The strategy is taking shape.

Now the country is waiting to see if it can be delivered.