On YouTube and Facebook, Prime Minister Mark Carney and Opposition leader Pierre Poilievre are mortal enemies. It’s a weird contrast, because if they met at a party they’d find it easy to break the ice. 

Both have Irish grandfathers who immigrated to Canada. Carney was born in the Northwest Territories, but his family moved to Edmonton when he was six. Poilievre grew up in Calgary. Carney’s parents were teachers. So were Poilievre’s. 

Each eclipsed his modest roots and joined the elite while relatively young. Carney made good money as an investment banker at Goldman Sachs before joining the Bank of Canada as a deputy governor in 2003. Poilievre, 45, qualified for a parliamentary pension at the age of 31 by virtue of winning a seat in the House of Commons when he was still in his twenties. Thanks to their hard work, both will retire comfortably.  

Neither is thinking about retirement, of course. They are about to compete in an election that will be one of the most important in Canada’s history—because the winner will be tasked with transforming the country’s economy. 

The outgoing premier of Newfoundland and Labrador explained why that’s necessary on the latest episode of the Public Policy Forum’s “Wonk” podcast. 

“There were no tanks on Duckworth Street” when Newfoundland joined Canada in 1949, Andrew Furey said. “We couldn’t support ourselves at that time. My concern from Day 1: when [U.S. President Donald Trump] put forward the insult, to call our prime minister ‘the governor’ and to call us ‘the 51st state,’ he was not joking about that—and he was using and will use economic tools to create chaos, to extract not just fiscal value, but potential territorial value from the country we love so dearly.”

Newfoundland was abandoned by a benefactor that no longer had the wherewithal to maintain its disparate colonies. Canada’s circumstances are similar, if not quite the same. The job of the next prime minister will be to build an economy that will allow the country to support itself without the beneficence of the U.S. government. The productivity crisis will make that hard, but so will the way the political class has decided to conduct itself for the past decade or so. 

Carney and Poilievre agree the economy deteriorated under the previous government’s watch. Neither has presented a comprehensive plan for economic renewal, but they’ve made a bunch of specific promises that overlap. Carney stole Poilievre’s central pledge: axing the consumer carbon tax. Both would scrap the previous government’s plan to raise capital gains taxes, give first-time homebuyers a break on the federal sales tax, and do their best to cajole the provinces and territories into creating an internal market. 

That’s enough for a budget. A country with a different political culture would have formed a unity government in the face of this crisis and got to work. Alas, it’s difficult to make common cause with the people whom you’ve conditioned your donors to hate.  

Poilievre has been doing his best to wreck Carney’s reputation for the past couple of years. “I would like to specifically point out Mark Carney,” the Conservative leader said at a press conference in British Columbia in January 2024, long before Carney officially entered politics. Poilievre was answering a question about whether a future Conservative government would associate with anyone linked to the World Economic Forum. 

“There he was, celebrating the central banks who caused the inflation by printing trillions of dollars so that multimillionaires like him could have their asset values inflated, while the purchasing power of working class people and seniors was wasted away by inflation, a massive wealth transfer from the have-nots to the have-yachts.”

The drive-by smears got worse once Carney declared he would run for the Liberal leadership. Poilievre has nicknamed his opponent “Sneaky.” It was inevitable that Carney would respond with some conjecture of his own. “Pierre Poilievre would let our planet burn,” Carney asserted in his victory speech. 

What the winner of this election does as a leader and a legislator will have the greatest impact on the country’s future. But the way Carney and Poilievre conduct themselves in the campaign will matter too. 

The years of Trudeau’s fall from grace and Poilievre’s emergence as a political force coincided with a hardening of political polarization, a loss of trust and a steady decline in measures of happiness. That matters because a deterioration of “social capital” might partly explain why so many western democracies have struggled to generate sufficient economic growth to support the expectations of their citizens. 

Social capital is the intangible stuff that allows “human capital” to turn physical capital into wealth—the ties that bind everything together. But those ties have loosened considerably and are now at risk of coming undone. Andy Haldane, the former chief economist at the Bank of England, wrote at the end of last year that the “greatest peril” was not a global depression or another market crash, but a widening of what he called the “Great Division” that has emerged within societies over the past half century. 

If that feels a little flakey to you quantitative types, there’s lots of research that demonstrates a positive correlation between trust and economic growth and productivity. One of the reasons democratic capitalism works relatively well is that the rule of law and accountable institutions engender trust, and trust allows markets to function efficiently. Trust is the lubricant that keeps market economies and societies running. Without it, everything works less well. 

The forces pulling western societies apart are complex and powerful. Economic inequality is a big one. Furey, the outgoing premier, is an orthopedic trauma surgeon. He thinks society is suffering from post-traumatic stress caused by the COVID-19 pandemic. Social media and smartphones appear to have contributed an epidemic of loneliness. 

In Canada, politics has amplified these divisions, as competitive actors in a winner-takes-all game have adjusted their tactics to efficiently mine narrow veins of support, rather than try to appeal to a broader swath of the electorate. The governing party hasn’t won more than 40 per cent of the popular vote since 2000; former prime minister Justin Trudeau kept his job in 2019 with 33.1 per cent of the popular vote, and then again in 2021 with only 32.6 per cent.  

Practitioners call this “vote efficiency.” If the people running Canadian political campaigns were running the country’s companies, we wouldn’t have a productivity crisis. However, they’re contributing to the problem by stoking the country’s various pockets of rage and frustration. It’s a clever tactic, but one that alienates more people than it attracts. In 2015, Canada ranked fifth in the World Happiness Survey with a score of 7.4; in 2024, we came 15th with a score of 6.9. 

Canadian society has begun to corrode. Rebuilding trust will be an important part of rebuilding the economy. Carney and Poilievre can attack that problem immediately by stopping the personal attacks on each other. 

Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.