A Carney in charge of the circus

Canadians in the bottom 50% income bracket should buckle up

Is Mark Carney going to be the saviour of the middle class?

I wouldn’t hold your breath.

His previous public service has been as the head of not one but two central banks, which serve first and foremost, capital. Central banks have played a pivotal role in the neoliberal shift that seeks to accumulate as much profit as possible.

But Carney hasn’t just been a banker. He has also been on the other side. After his time at the British central bank, Carney held roles in leadership with Brookfield Asset Management, an asset management firm that is one of Canada’s wealthiest. He was chairman of the board right up until he launched his Liberal leadership campaign.

Brookfield is an asset manager that manages more than $900B in assets worldwide. Among their assets are a mix of sustainable energy infrastructure, like hydroelectric dams, and infrastructure. They also manage $276B in real estate assets, including single detached homes and appartment buildings across the United States. Brookfield profits off of things that should be state owned and operated — bridges and energy projects for example — and off of things that should not draw any profit from — rental appartments and single-family homes.

They also stash their money in tax havens, hiding billions from the state that should be investing in our public services. In 2023, a report from the Centre for International Corporate Tax Accountability and Research found, “Brookfield’s track record of alleged tax dodging has received some attention in Australia and Canada, where it may claim the title of Canada’s top tax dodger … And there is an apparent pattern of aggressive tax avoidance consistent across its global operations.”

What’s more, Brookfield was among the companies that received the Canada Emergency Wage Subsidy (CEWS) and still paid money out to their shareholders.

In an analysis of the companies that received CEWS money but that also paid money out to share holders, economist DT Thompson included this special note about Brookfield:

Brookfield Asset Management Inc deserves special attention among the 37 CEWS recipients.

It had the largest tax gap in 2017-21.

It has the most identified tax haven subsidiaries.

It is tied for the most CEWS-receiving subsidiaries (with Suncor and Thomson-Reuters).

Its acquisition of other companies greatly outpaces any other Canadian company.

Perhaps most importantly, five of its wholly-owned CEWS-receiving subsidiaries are owned through Bermuda.

Brookfield maintains an incredibly complicated web of interowning subsidiaries, which raises questions about why such a complicated—and costly—tangle of subsidiaries is necessary.

On December 9, 2022, Brookfield added to the complication by reorganizing itself into two publicly-traded companies: Brookfield Corporation and Brookfield Asset Management Ltd.

Carney was surely just doing his job when he was part of a group that cleverly oversaw systems intended to defund the state through hiding tax revenue. But what does it mean for how he will govern as (our unelected) prime minister?

Well, if we were to be charitable, maybe it means that Carney will go with the flow, not rock the boat and listen to Canadians, the vast majority of whom want Canada to be more fair and invest in its social services. If he’s a man who just follows the flow of things, and Canadians lay out what it is that we want, maybe he’ll change course.

But if we were to be less charitable, we might conclude that Carney has no real loyalty to state revenues (and everything they make possible) and that he will bring this attitude into the PMO.

If the Liberals had had some impressive left wing history on taxation, perhaps I’d be willing to be charitable. But for all of the progressive rhetoric, Carney is walking into an office that has been downright hostile to tax reform and tax fairness.

The most significant tax policy that the Liberals promised was to tax large sums of money at a higher rate through changing the capital gains exclusion rate. That legislation is still not yet passed, and it has been punted to 2026 to take effect, if it ever does. Given their three-year relationship with the NDP, the lack of concrete measures related to taxes, it’s pretty clear that when it comes to tax fairness, this is not a party that actually cares.

Now, I know what you’re thinking: Carney is better than Pierre Poilievre. Nothing that he has done or will do will justify not voting for him to block Poilievre. If you aren’t thinking that, thank you for not being reductive in this moment where reductive politics have lead us into a cage match between two not very impressive options.

And if you do think that, well, all I can do is implore you to read up on how much of the current mess is equally the fault of the Liberals. There is no material difference between having someone beat you up and insult you versus having someone beat you up and apologise. Nor is there a difference between being beaten up slowly or being beaten up quickly. It’s all bad and your stomach will thank you if you learn how to transcend such narrow reasoning.

The reality is that the next federal election will not save us, and regardless of what you think of my writing, you certainly know this deep down. Even a Carney reprieve is unlikely to stave off an even more rabid Conservative party in the next election after this one. But if we aren’t clear-eyed about what is happening, then we sure as hell cannot see where we’re going. And to have a banker, a CEO’s man in the office of Prime Minister, it is going to bring with it a world of challenges that near certainly will pave the road for someone worse than Poilievre.

The only real decision, then, isn’t whether or not to support the Liberals, but how you can use your energy and limited time to make something better, build something more powerful, that can force the Carneys of the world to make better decisions.