Bay Street's big red tent

Amid Mark Carney's triumph at the Liberal Party of Canada's leadership convention, the politics of dynasty, deference, and elite identity reigned supreme.

James Richardson, D.C. Jamieson, Pierre Trudeau, John Turner, Jean Marchand, and Gerard Pelletier arrive for the swearing in of cabinet in 1968.

Last weekend, Mark Carney was elected leader of the Liberal Party of Canada and prime minister designate. He is widely expected to call a federal election within the next week — the coming campaign set to either complete his meteoric rise in national politics or make him the shortest-serving prime minister in history depending on the result.

As for the Liberal leadership convention itself, the result wasn’t even close. Garnering nearly 86 percent of the vote on the first and only ballot, the former central banker won the most support among the party’s membership in every single one of Canada’s 338 electoral districts. Chrystia Freeland, a senior cabinet minister and the most visible Liberal figure of the Trudeau era besides its eponymous figurehead, managed just 8 percent and was handily trounced by Carney in her own riding of University-Rosedale (188 votes to 1322). Karina Gould, the sole candidate in the race to offer anything resembling a credibly centre-left pitch, managed less than half of even Freeland’s share.

Source: Liberal Party of Canada.

The outcome here is hardly surprising. Carney has looked poised to win from more or less the moment he entered the race in January. His margin of victory, however, is astonishing by any standard, and speaks to the exceptional and unusual nature of Canada’s present political moment. Since I’ve already written on Carney at some length, I won’t belabour the arguments again here.

Nonetheless, in watching the convention I was struck by how conservative its overall tenor really was. Throughout his victory speech, Carney had Liberal members applauding his commitment to reverse the flagship climate policy of the Trudeau era. Applause similarly greeted his promise to ditch the government’s recent increase to the capital gains tax, justified on the grounds that “builders should be incentivized for taking risks and rewarded when they succeed” (that increase, for context, exclusively affected roughly 40,000 Canadians who taken together have an average income of $1.4 million). Among other things, this is identity politics for the 0.1% — a brazen defence of special tax privileges for the very wealthiest justified, no less, by the additional suggestion the rest of us should applaud them for so generously reaping the dividends afforded by passive income.

It’s also, it should be said, perfectly contiguous with the Liberal attitude towards taxation, even throughout the earlier and more centre-leftish moments of the Trudeau era.

In Canada, the 100 highest-paid CEOs made 210 times more than the average workers' wage (as of 2023). The word “wage”, in fact, isn’t even quite right when it comes to the former. These days, elite executives tend to receive the lion’s share of their compensation from the likes of stock options — only 50% of the income from which, thanks to an absurd loophole, is exempt from taxation entirely. In 2015, the Liberals campaigned on closing this very loophole (which among other things costs the federal government $750 million in annual tax revenue) but quickly flip flopped on the pledge. Here’s how Finance Minister Bill Morneau — recruited directly from Bay Street by the Liberals — justified the reversal:

“I heard from many small firms and innovators that they use stock options as a legitimate form of compensation, so we decided not to put that in our budget.”

This is, of course, a classic bit of triangulation designed to make the maintenance of lavish tax privileges for the exorbitantly wealthy sound like a win for the little guy. It was also quite straightforwardly a lie. I was incidentally working as an investigative journalist at Press Progress at the time, and through access to information we acquired correspondence between Morneau and various salt of the earth representatives from mom and pop enterprises like John Manley (CEO of the Business Council of Canada and himself a former Liberal finance minister), Michael Wilson (Chairman of Barclays Capital Canada and a former Tory minister of finance) and someone from the Canadian Venture Capital and Private Equity Association. In effect, the correspondence showed that the upper echelons of Bay Street politely asked one of their own to maintain their special tax privileges, and the government in which he served quite dutifully complied.

Quite apart from the letters’ content, their tone itself was striking. Though written on official letterhead, some were also quite familiar and the interlocutors addressed one another on a first name basis.

To return to both Carney and last weekend’s Liberal convention, it’s germane to note of some broader continuities here. Carney’s net worth is currently unknown, though it’s safe to say he’s extraordinarily rich by the standards of anyone who isn’t a billionaire. Throughout its modern history, the Liberal Party has almost always been fronted by wealthy and/or aristocratic leaders.¹ Justin Trudeau, who Carney is replacing, would simply never have been a national political figure with a different patrilineage. As the right-leaning columnist Andrew Coyne quite fairly wrote more than a decade ago after Trudeau’s own overwhelming first ballot victory:

If we are honest, we will concede this is almost entirely a function of heredity. No one would pretend he won because of his platform, or his record in office, or his character and accomplishments. But neither was it simply a matter of celebrity or good looks. The reason he is the leader of the Liberal Party today, the reason 40% or more of Canadians say they would like him to be prime minister, is because of who his dad was.

Trudeau’s predecessor Michael Ignatieff has a patrician family history too extensive to detail here, and has written two separate memoirs about the different generations of Russian and Upper Canadian aristocrats who comprise each side of his family. Paul Martin — finance minister, prime minister and Liberal leader in the early 2000s — was CEO of a major steamship company and is reportedly worth $225 million (his father, Paul Martin Sr., held cabinet posts under four different Liberal prime ministers). John Turner, who also briefly served as prime minister and held the finance portfolio before that, worked as a corporate lawyer on Bay Street. Though he was on the political left before his 1965 run for the Liberals, Pierre Trudeau grew up with an inheritance and was educated at the Collège Jean-de-Brébeuf — an Eton of sorts for members of the Québécois elite which has seen more future prime ministers pass through its doors than any other school in the country (later attended by all three of his sons).

With all this in mind, what struck more than anything about last weekend’s Liberal convention was the sheer extent of the elite dynastic politics on display. Ahead of Trudeau’s speech to the floor, he was introduced by his teenage daughter — whose presence immediately had TV commentators speculating about a future political career — who spoke at length about the difficulties of growing up with a dad in the prime minister’s office, in turn noting that her own father’s childhood had been defined by the very same. Carney, after being introduced by his own daughter, began his speech by joking “maybe we should just skip a generation.” The convention’s other big speaker was Chrétien, who in an interview afterwards mention he had personally campaigned with Carney’s father when the latter was a Liberal candidate in Edmonton. (Carney is himself is also godfather to one of Chrystia Freeland’s children.)

I'm obviously not here to criticize the two young women who introduced their respective dads, and in its immediate context this stuff is perfectly innocuous. I’d wager, in fact, that the overwhelming majority of convention attendees found the various invocations of dynastic politics and references to familial ties charming. This, however, is precisely the point — because, against the wider backdrop of a former prime minister’s son handing the baton of national leadership to a technocratically-minded central banker, it speaks to how deeply the elite politics of dynasty and deference remain embedded in Canada’s historically hegemonic political party.

To address an obvious objection to what I’m suggesting here, it’s of course the case that many quite naturally follow in the footsteps of their parents. The Liberals are also far from the only party in Canada where successive generations from the same family have been prominent figures. None of us choose the families we’re born into or the cards we’re dealt in life (though we can and do choose how exactly we want to play them).

But there is nonetheless an important distinction to be drawn that has to do with class. When the son or daughter of a clerk, teacher, nurse, or artist takes up a similar profession, the result is just that more people become clerks, teachers, nurses, or artists. In a class society, however, there will always be only a small number born to elite backgrounds, and those who hail from them very clearly have advantages and privileges others don’t. The most obvious of these have to do with money, but in some ways elite social networks are probably more significant. In any case, when the formulation above is repeated, the result is something qualitatively different: when the son or daughter of a rich executive or powerful politician takes up a similar profession, the upshot isn’t just more rich executives and powerful politicians, but the intergenerational transfer of wealth and power themselves.

In Canada, one of the major vehicles for this process is the Liberal Party, within which elite identity and dynastic politics have long been highly valued and cherished commodities. No one with even a cursory knowledge of Canada’s modern political history could deny these things have served the Liberals well — since the advent of mass suffrage, few parties anywhere have won national elections as regularly or been in government as consistently. Both historically and in the present day, a popular constituency for deference politics and aristocratic leadership undeniably exists.

In a democracy, however, there is nothing that obligates any of us to keep bending the knee.

1. The only exceptions to the overall trend are Stéphane Dion (an academic of middle class origin) and Jean Chrétien (who grew up in a quite poor working class family).