Liberal Leader Mark Carney delivers his victory speech during the Liberal leadership announcement in Ottawa on March 9.Adrian Wyld/The Canadian Press
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
Remember when the Liberal Party of Canada loathed bankers? And bankers like Mark Carney thought politicians were “circus clowns”? Liberals don’t. They just elected Canada’s most famous banker, Mr. Carney, as their party’s Leader and now Prime Minister.
Mr. Carney did not just head two central banks. Before that he had proved himself as an investment banker toiling for 13 years at the golden temple of global investment banking, Wall Street’s Goldman Sachs, a bank known for its “extreme profitability and market prowess.” He parleyed that into success at the Bank of Canada and later, at the Bank of England, cutting the most unique path to Prime Minister in Canada’s history.
Before Mr. Carney, Liberals juiced their populist credibility by bashing bankers whenever the opportunity presented itself. It was part of the Liberal Party brand. Standing up for regular folks and small business against banking big shots from Bay Street and elsewhere was the Liberal way.
What will the Liberal way be now that the party is being led by one of those big shots?
It wasn’t long ago, indeed it seems just like the last fall economic statement (2024), that Liberals were bashing bankers by attempting to impose “no-cost bank accounts” on them because they were too mercenary to do it on their own.
Then there was the last federal election (2021), and subsequent federal budget (2022), when Liberals led by Justin Trudeau used the party’s well-worn, populist stick to publicly beat bankers into submission as his government imposed special taxes on bank profits to generate billions for the federal purse because bankers wouldn’t pay their “fair share” otherwise.
Those who objected could not get the time of day from Ottawa. Anthony Ostler, president of the Canadian Bankers Association, was flabbergasted by the Liberal government’s indifference to the negative consequences of its policies. He said the government was “picking” on bankers – an accusation that was political music to Liberal ears.
Former Liberal prime minister Jean Chrétien, snubbed by bankers in his early political career when he couldn’t get them to return his phone calls, turned bank bashing into a blood sport when he was in office from 1993 to 2003. His bludgeoning of bankers reinforced his reputation as the “little guy from Shawinigan” and played well with voters across the entire country.
Bankers’ political ineptitude gave him plenty of opportunities to exercise that reputation.
Early in his first term, Canadian bankers warned that regulatory reform was needed to compete against more profitable U.S. banks on the global stage. Mr. Chrétien’s government laughed off such demands, saying “no.” When Canadian banks, particularly Royal Bank, called on Ottawa to end the arcane practice of prohibiting the sale of insurance in bank branches, Liberals said “non, merci,” and welcomed the insurance industry into the collective bank-bashing party that demand from bankers provoked.
Then, in 1998, Royal Bank and Bank of Montreal sprang a surprise merger proposal on the federal government, which was followed by another surprise merger proposal, between Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, leaving Bank of Nova Scotia on the sidelines. The Liberal government again said “no” and “no” and delighted in having Scotiabank executives condemn peer big banks in their public battle over bank mergers.
When Scotiabank hoped Mr. Chrétien’s Liberals would return the favour a few years later and let it merge with Bank of Montreal, they made it clear bankers don’t get favours from Liberals and killed the proposal before it went anywhere.
To leave no doubt about how Liberals felt about bankers, Mr. Chrétien’s government made it easier for foreign banks to do business in Canada and compete against large domestic banks, and created a banking consumer watchdog, the Financial Consumer Agency of Canada, to further complicate the business of bankers in the country.
Such policies were made easy because the Liberal caucus in the 1990s “roundly hated” big-shot bankers, according to former Liberal trade minister Roy MacLaren. “Who are those sons of bitches to be telling us how to run the country when they are hauling in so much money,” he asked a Toronto Star reporter in 1995.
Thirty years later, one of those banker big shots is the Leader of the Liberal Party of Canada. As Prime Minister, he will now be telling Liberals how to run this country.