Can Carney Build a New Majority Around the Promise of Getting Things Done?

“The level of uncertainty is higher than what we have seen and felt for generations,” federal finance minister François-Philippe Champagne told the House of Commons in early November, describing the current state of the Canadian economy.

The transition Canada is undergoing—including the reshaping of “the rules-based international order and the trading system that powered Canada’s prosperity for decades”—is “a true generational shift,” he said. And it was in this spirit, he told the members of Parliament in the House, that he presented this year’s budget, the first from the Mark Carney Liberal government. Champagne then quoted former prime minister Jean Chrétien: “Let’s accept this role with humility, but also with confidence.”

Dubbed “Canada Strong,” the plan aims to mobilize roughly $1 trillion in public and private investment over five years, shifting Ottawa’s focus toward nation building, with major spending on housing, infrastructure, clean energy, defence, and innovation. If it’s true that, with this budget, we’re entering a new era, it seems worth remembering what we’re leaving behind.

As it happens, it’s the era Chrétien set in motion as finance minister. One in which markets were assumed more reliable than states, in which efficiency mattered more than capacity, and in which governments were to be lean and constrained and out of the way. An era during which privatization and deregulation, lower taxes, and free trade deals reigned, based on the consensus that growth could be coordinated externally rather than built from within. As for people’s expectations of governments—sure, they delivered decreasing support to citizens, but that was up to the market.

This period of neoliberalism worked—for a while, anyway. As Champagne noted, Canada broadly prospered. We became a central, though relatively small, cog in a massive global market that, luckily for us, revolved around a reliable and immense American economy. But it also fulfilled its promise in other ways too. Neoliberalism said that government was the problem, then spent forty years making it into one, weakening it from the inside out. Government outsourced expertise, trimmed capacity, and allowed its machinery of delivery to rust.

What finally ended neoliberalism was a sequence of stresses that exposed its limits, including the financial crash of 2008 and the COVID-19 pandemic. Each crisis revealed how much of that prosperity was built on the shaky ground of speculation and debt and how little institutional trust underpinned the entire apparatus. We are now living in the aftermath, the post-neoliberal moment. We watch the state struggle to do the things it once could decades ago. Big things, like supporting housing, or building infrastructure, or coordinating national security. Or smaller ones, like issuing passports on time, delivering the mail, or recruiting a military.

The real issue at hand for Prime Minister Carney and his budget isn’t about scale. It’s about execution. A larger state that still can’t plan or build will only deepen the cynicism. What matters now is showing that the government works at all. Canadians, for the most part, believe he is capable. In a pre-budget poll, Nanos revealed that 59 percent of Canadians said that Carney is the most trusted leader to support economic growth—besting Conservative leader Pierre Poilievre in every region.

But rebuilding administrative capacity is not only a governance challenge but a political wager. If Carney can prove the government can act with coherence and purpose, he might bring into existence a new electoral bloc organized around restored institutional competence. In a way, his entire project depends on it.

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The Justin Trudeau Liberals did try to revive the role of the state but did it without fully recognizing the change that had taken place. They still believed that the rules-based system—the one that underpinned neoliberalism—was still mostly intact. Trudeau became prime minister in the fall of 2015 as a kind of avatar of mid-century Canadian confidence.

In power, the Trudeau Liberals governed as if the neoliberal state still had capacity. His government issued subsidies and transfers, created funding envelopes and an infrastructure bank, and poured money into programs for housing, clean tech, and child care, among others. Some of those worked, but many stalled—not for lack of ambition or good intent but because the underlying state capacity had more or less disappeared, along with the trust that once animated public institutions. The Trudeau years revealed the truth of this post-neoliberal era: that you can spend without being able to build.

Anyway, the neoliberal era is over now. Even Champagne seems to admit it. What has replaced it is something new. For one thing, the old left–right spectrum has fractured; voters are sorting themselves along lines that depart from traditional ideological territory.

You can see this in the strange coalitions that now form around issues like immigration, housing, and public health, where parts of the left and parts of the right often end up on the same side, driven less by ideology than by anti-elite grievance or institutional distrust. Movements as different as anti-vaccine mandate protests, housing debates, and anti-carbon-tax populism all draw from these overlapping pools of frustration rather than traditional partisan identity. The political “centre” the Liberals once occupied is not merely contested; it has evaporated.

Meanwhile, the economy has changed. The old order assumed open markets and deep global integration. It was based around a stabilizing and internationalist America, along with a shared global economic system that prioritized efficiencies over resilience.

No more. The United States is in an ideological K-hole, disassociating and disoriented, paralyzed and lost somewhere in its own private reality. The logic of the last forty or so years has gone down with it. Today’s economy is heavy on grift. Entry-level jobs are flooded with AI-written résumés. Careers feel performative. Side gigs abound. Stuff gets more expensive all the time. It’s an era of highly atomized and increasingly anti-social individuals, perpetually confused or aggrieved, in which trust in institutions and elites feels naive because nothing seems to ever change. Everyone is scrambling. Everything is upside down. And the state is now back as a fundamental unit of political agency.

The task for the Carney Liberals is therefore architectural. Some parts of the budget still lean on the familiar nudging-the-markets playbook. Tax incentives for private capital in housing and clean tech, credit guarantees meant to mobilize corporate investment, and public–private partnerships for infrastructure delivery. But take other things: the new housing agency, the military-industrial strategy, the Buy Canadian Policy, the Critical Minerals Sovereign Fund, and the Arctic infrastructure project funding. These could all be considered a return to big government.

Success is daunting. It would mean two things going right. First, that the state can be rebuilt in a way that it can function coherently, reliably, and at scale. And second, that Canadians can see it working.

So far, Carney looks like he might have more success on the first than the second, even if the latter is the more crucial. He must reset voter expectations of government—and then meet them. In doing so, he might find a new, defined spot for the Liberal Party within the chaotic ideological realignment still underway.

No one knows how it will all settle, but the stakes are clear. If Carney succeeds, the political centre will become more than just a compromise position between left and right. It will be a place where the state works again, finally. If he fails, the emptiness will remain.