{"id":62290,"date":"2025-07-24T16:25:43","date_gmt":"2025-07-24T16:25:43","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/07\/24\/carney-macklem-duo-brings-unique-dynamic-to-canada\/"},"modified":"2025-07-24T16:25:43","modified_gmt":"2025-07-24T16:25:43","slug":"carney-macklem-duo-brings-unique-dynamic-to-canada","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/07\/24\/carney-macklem-duo-brings-unique-dynamic-to-canada\/","title":{"rendered":"Carney, Macklem duo brings unique dynamic to Canada"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header article-header--feature\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<p>Breadcrumb Trail Links<\/p>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\">Economy<\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\">Two of the most powerful men in Ottawa share a history and experience, but what happens when times of crisis amp up natural tensions between the government and Bank of Canada?<\/p>\n<div class=\"article-meta\">\n<p><span class=\"published-date__since\">Published Jul 24, 2025<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">Last updated 42\u00a0minutes ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">13 minute read<\/span><\/p>\n<div class=\"article-meta__bottom\">\n<div class=\"bookmark-wrapper\">\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-no-style=\"\" data-popover-component=\"\" data-position=\"top\" data-sticky=\"\" data-tail-offset=\"200\" data-tail-position=\"right\"><button class=\"popover__trigger bookmark-button\"><span class=\"save-article-button save-article-button--default\" title=\"Save article\" data-article-id=\"be105bd0-c3b5-4081-86f8-544f02f65c1f\" data-evt-skip-click=\"true\"\/><\/button><\/p>\n<div aria-describedby=\"popover-desc-popover-bookmark\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<div class=\"popover__content__text\" id=\"popover-desc-popover-bookmark\">\n<div class=\"bookmark__popover__content\">\n<p>You can save this article by registering for free here. Or sign-in if you have an account.<\/p>\n<\/div>\n<\/div>\n<p><button class=\"popover__content__close\" data-evt-skip-click=\"true\" title=\"Close\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" viewbox=\"0 0 12 12\" class=\"icon--close\" height=\"12\" version=\"1.1\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=1200&amp;h=675&amp;type=webp&amp;sig=IsjUtf3mwSjtSfG6Zw2QRA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=2400&amp;h=1350&amp;type=webp&amp;sig=4Ir9e3w9d7JcutkQMmSUjQ 2x\" type=\"image\/webp\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=1200&amp;h=675&amp;type=jpg&amp;sig=r5DTkyboV23pcdB5TMyqVw,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=2400&amp;h=1350&amp;type=jpg&amp;sig=oTZht8HOUqLZ1P1uwtxC1Q 2x\" type=\"image\/jpeg\"><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=768&amp;h=432&amp;type=webp&amp;sig=40II7B_UY434UwwHq6A_TA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=1536&amp;h=864&amp;type=webp&amp;sig=mt07RXxRdjUwWH2ndRjA2Q 2x\" type=\"image\/webp\"><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=768&amp;h=432&amp;type=jpg&amp;sig=_zzkS7zig4-twJHIRul6sA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=1536&amp;h=864&amp;type=jpg&amp;sig=G4xA4IeGREiSgMuja1sHcQ 2x\" type=\"image\/jpeg\"><source media=\"(max-width: 767px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=375&amp;h=563&amp;type=webp&amp;sig=OZBXSHEAQ49QtRV-5dyy7g,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/carney-macklem-gs0723-1.jpg?quality=90&amp;strip=all&amp;w=750&amp;h=1125&amp;type=webp&amp;sig=NNq-O30cgvkF69OaaPvPnA 2x\" type=\"image\/webp\"><\/source><\/source><\/source><\/source><\/source><\/picture><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Under normal circumstances, the governor of the Bank of Canada and the prime minister meet formally on occasion, a careful arrangement that allows them to touch base on the state of the economy while preserving their respective jurisdictions over monetary and fiscal policy.<\/p>\n<p data-async=\"\">In challenging times, those meetings can grow more frequent, something many central bank watchers expect in the coming months as U.S. President Donald Trump and his administration pursue trade policies that have rattled the global economic order.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_2\">\n<section aria-describedby=\"advertisment8056616387985870748224023171170304\" class=\"ad\">\n<p>Advertisement 2<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" 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id=\"auth-screen-form\">\n<div class=\"identity-screen-form--active w-full flex-align-justify-center\">\n<div class=\"identity-screen-form identity-screen__content w-full\">\n<h2 class=\"blocker-title\">Sign In or Create an Account<\/h2>\n<p><span class=\"identity-divider__line\"\/><span class=\"identity-divider__text\">or<\/span><span class=\"identity-divider__line\"\/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<footer class=\"identity-footer identity-screen__content m-x-0 p-x-0 col-sm-6 col-md-12\"\/><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p data-async=\"\">For the foreseeable future, these meetings come with an interesting dynamic. Prime Minister Mark Carney is a former central banker himself, with an unprecedented resum\u00e9 that includes leading the central banks of two G7 countries, while the current governor of the Bank of Canada, Tiff Macklem, served under Carney at the central bank as his senior deputy governor for three years.<\/p>\n<\/section>\n<div class=\"js-widget-content article-content__widget-group article-content__widget-group--content-slot6 article-content__widget-group--newsletter-slot newsletter--indent\">\n<section class=\"newsletter-widget__new-story-page fp-headlinenews background--primary-light-gradient\" aria-labelledby=\"FinancialPostTopStories8454429813178910822821002408361984\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\">\n<div class=\"newsletter-new-story-page-template\">\n<div class=\"newsletter-widget__header__new-story-page\">\n<div class=\"newsletter-widget__banner__new-story-page\"><img decoding=\"async\" alt=\"Top Stories\" loading=\"lazy\" src=\"https:\/\/dcs-static.gprod.postmedia.digital\/19.1.5\/websites\/images\/newsletters\/icon-fp-topStories.svg\"\/><\/div>\n<div>\n<p>Top Stories<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">Get the latest headlines, breaking news and columns.<\/p>\n<\/div>\n<\/div>\n<div class=\"newsletter-widget__body__new-story-page\">\n<div class=\"js-replace-main__new-story-page\">\n<p class=\"newsletter-widget__disclaimer__new-story-page text-size--tiny\">By signing up you consent to receive the above newsletter from Postmedia Network Inc.<\/p>\n<\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<p>Thanks for signing up!<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text__new-story-page newsletter__feedback--last\">The next issue of Top Stories will soon be in your inbox.<\/p>\n<\/div>\n<p class=\"newsletter-widget__text__new-story-page js-submit-error\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\" style=\"margin-top:8px\">We encountered an issue signing you up. Please try again<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>People who know Carney and Macklem expect their\u00a0shared\u00a0history\u00a0will\u00a0allow them to smoothly navigate the relationship \u2014 one that has no extended precedent in the history of large developed nations \u2014 and put the government and central bank on a path to comfortably manage the natural tension between fiscal and monetary policy.<\/p>\n<p>\u201cCarney\u2019s experience means he understands the appropriate relationship between a central bank and the government, and I think he would respect the independence of the central bank,\u201d said Stephen Williamson, an economics professor at Western University who also holds the title of Stephen A. Jarislowsky Chair in Central Banking. \u201cFurther, given what I know about Macklem and Carney, even if there were differences to work out, in a crisis (for example), we\u2019ll never hear about those differences. After all, they know that presenting a united\u00a0front to the\u00a0public in a crisis is critical.\u201d<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<figure class=\"embedded-image article-content--full_width\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=cVOuxSrNsqCOR9WpdtsdDA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=3k9cgCXJXesLK3SodAEVjg 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=NKcT6r4wqN6HAkexjKhiUQ,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=WZhZcduXfUWunMgT6ZFgyw 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=WNyiKhjCiQuGygeNE37BNw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=m14wYocK8Sa8v1FpqjqXVw 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=h828_nw0Ph_lChwxajTWgQ,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=EvePV9PFMCm4nLv4a1hiYA 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=CK3bVswbTCT7iRnLlrKeNQ,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=gFrqdeIRGuEdxr8_nTACPA 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"Donald Trump and Jerome Powell\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=Rea049PDroGD76T6C7PQRA\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=Rea049PDroGD76T6C7PQRA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=Y3fukX37i2GtO9IHlO45ig 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/trump-powell-gs0724.jpg?location=full_width&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=hsqUDuOvX7tzNlGWpeuldg\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">A worst-case scenario in government-central bank relations is the situation unfolding in the U.S. with Donald Trump demanding that Federal Reserve chair Jerome Powell resign for not cutting interest rates.<\/span> <span class=\"credit\">Photo by SAUL LOEB<\/span> \/<span class=\"distributor\">AFP via Getty Images<\/span><\/figcaption><\/figure>\n<p>The unusual dynamic,\u00a0however, also raises\u00a0thorny\u00a0questions\u00a0about\u00a0how things might play out if competing priorities can\u2019t be easily balanced \u2014 especially if political pressure on the government rises.<\/p>\n<p>\u201cUltimately, once somebody is an elected politician, they start behaving like an elected politician,\u201d said Mark Manger, a political economy professor at University of Toronto\u2019s Munk School of Public Policy. \u201cAnd it doesn\u2019t matter if they were central bank governor or if they have a PhD in economics from Oxford. They become a politician.\u201d<\/p>\n<p data-async=\"\">A worst-case scenario in relations between a political leader and the head of a country\u2019s central bank is playing out in the United States in an escalating battle between U.S. President Donald Trump and Jerome Powell, chair of the U.S. Federal Reserve, who has come under increasing pressure to adhere to Trump\u2019s demands that interest rates be slashed.<\/p>\n<p>While no one expects anything close to a similar imbroglio in Canada, the Bank of Canada\u2019s independence has been tested from time to time over the years. However, the relationship has not ruptured publicly since the Coyne Affair in 1961, when then prime minister John Diefenbaker squared off against Bank of Canada governor James Coyne, leading to Coyne\u2019s resignation.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>Lesser public tensions have cropped up in the years since, such as when the run-up of inflation following the COVID-19 pandemic put central bank policy more squarely in contrast\u00a0with the desire of governments around the world to keep interest rates low to reduce the burdens of personal and government debt.<\/p>\n<p>In September 2023, when the Bank of Canada was well into a months-long period of raising interest rates to cool inflation, putting pressure on Canadians with credit card debt and those facing mortgage renewals, then-finance minister Chrystia Freeland publicly referred to the Bank of Canada\u2019s decision to hold rates as \u201ca welcome relief for Canadians.\u201d Her choice of words implied to many that Ottawa would not have been pleased with another hike and stoked debate about whether she was sending a not-so-veiled message to the central bank.<\/p>\n<figure class=\"embedded-image article-content--half_width_right\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=i_7yMriKK7B1Af0TUP34kw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=jVorxlNntwrKnt-GT4QKWA 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=KGd_fwxzVwd-F5yJDMlQBQ,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=KKCZNtLehrlaVJgdjyZWIQ 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=FvFZ11mSWMXkQh3Mwlb9rQ,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=sFJYh0JwWNPFbrv9yjdmeA 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=F9VT-Zev41Tz2Tx-BkMowg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=WZiVgHIKW3MqcbS04kNr7g 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=NAAnus3NeqDTm2tPy0uwzQ,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=PGJJ82oCGr_xle6CYgxHcw 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"Chrystia Freeland\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=Teq4hXc0i_mKaR7fz_Yt0w\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=Teq4hXc0i_mKaR7fz_Yt0w,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=uIc12L6M35GGLcxAcWwCpg 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/chrystia-freeland-gs0724.jpg?location=half_width_right&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=mzSmIyUVRMW_ci-aWuusZg\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">Chrystia Freeland, while still finance mininster under Justin Trudeau publicly referred to the Bank of Canada\u2019s decision to hold rates as \u201ca welcome relief for Canadians.\u201d Her choice of words implied to many that Ottawa would not have been pleased with another hike.<\/span> <span class=\"credit\">Photo by ANDREJ IVANOV<\/span> \/<span class=\"distributor\">AFP via Getty Images<\/span><\/figcaption><\/figure>\n<p>Conservative Party Leader Pierre Poilievre issued a more direct challenge to central bank independence when he threatened in 2022 to fire Macklem if elected prime minister. As leader of the official opposition, he publicly blamed Macklem for the rising inflation that was far from unique to Canada in the aftermath of the pandemic. Poilievre had already made a target of Macklem, calling him an \u201cATM\u201d for the Trudeau government and its deficits.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>Politicians wading into central bank affairs put into sharp relief how times of crisis can amp up natural tensions,\u00a0with each having a district role to play in guiding a wide-ranging economy driven by sometimes conflicting forces.<\/p>\n<p>A government might favour lower interest rates to ease the burden on homeowners and win votes \u2014 especially at times when the government, too, has taken on a lot of debt \u2014 but a key responsibility of central banks is to keep inflation in check, often through raising rates. On the other hand, when economic stimulus is necessary for the central bank to meet its targets for inflation and price stability, a government might find itself reluctant to add to deficits, fearing lost votes.<\/p>\n<blockquote class=\"article-content--column\">\n<p>(Politicians&#8217; comments) are not usually helpful because often they\u2019re taking a simplistic view of things<\/p>\n<p>Timothy Lane, a retired deputy governor at the Bank of Canada<\/p>\n<\/blockquote>\n<p>Timothy Lane, who was a deputy governor at the Bank of Canada until he retired in 2022, said that in crisis situations it is not uncommon to have politicians comment on monetary policy.<\/p>\n<p>\u201c(They) are not usually helpful because often they\u2019re taking a simplistic view of things,\u201d Lane said.<\/p>\n<p>Other public comments from politicians have led to uncomfortable discussions about central bank independence over the years. In 2015, Joe Oliver, the finance minister, made an unexpected pronouncement about quantitative easing, which falls squarely within the Bank of Canada\u2019s purview.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>\u201cQuantitative easing is not on the table,\u201d he declared while visiting a Toronto university to promote expanded free trade, downplaying concerns at the time that Canada could be headed towards a recession.<\/p>\n<p>But even when things have appeared smooth on the surface, there have been times when, privately, the government and central bankers are not in sync.<\/p>\n<figure class=\"embedded-image article-content--half_width_left\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=u7NBCx0vrdPKUoRIpHaH3A,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=PtS1St55tBxn9QfVPkJa0w 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=5qlLppAyio9JgGpo3-wFDA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=MZl9LSYTUHWNLOY9Cg8QDQ 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=RWV7HPgyriGsXpfObFwJtw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=41yDnpjpd1fW89ntqbezGQ 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=2-NgKQgszNaYfhAEtNSFlg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=HE3piGIpp8WvVX0VGtEE0w 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=F3S51J2mHtjAZryMapwz4A,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=0ZBaTjZClPUV2ZJM4XDvNQ 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"Pierre Poilievre\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=HtBckF5VzNORL0QwNXINmw\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=HtBckF5VzNORL0QwNXINmw,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=Hij_PEICfsQUAnuk14M9Kg 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Saint-John-Poilievre-6.jpg?location=half_width_left&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=kV72rOBi010UpySDA0HE6A\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">Pierre Poilievre said he would have fired Bank of Canada governor Tiff Macklem during the recent bout of high inflation.<\/span> <span class=\"credit\">Photo by BRICE MCVICAR<\/span> \/<span class=\"distributor\">BRUNSWICK NEWS<\/span><\/figcaption><\/figure>\n<p data-async=\"\">One such occasion was after the global financial crisis shook financial markets and economies around the world in 2008, according to David Dodge, who was governor of the Bank of Canada for seven years through January 2008.<\/p>\n<p>Stephen Harper\u2019s Conservative government had been focused on cutting taxes and was slow to introduce stimulus measures to support the economy, he said. The Bank of Canada responded to the growing crisis by rapidly lowering overnight interest rates from 4.25 per cent to just 0.25 per cent over the course of 2008 and 2009.<\/p>\n<p>\u201cThe Harper government was running a fiscal policy which was too tight, especially after 2009,\u201d Dodge said. \u201cThe (result) put real pressure on the bank to continue to maintain extraordinarily low interest rates to meet its inflation targets. So that was a period where co-ordination certainly did not take place.\u201d<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>Despite Freeland\u2019s public comments in 2023, there appeared to be more co-ordination when the COVID-19 pandemic closed all but essential business and services in March 2020. The government responded by rolling out billions of dollars in stimulus spending to households and businesses, while the Bank of Canada quickly lowered rates to support the economy and launched liquidity facilities and purchase programs to keep markets functioning and credit flowing while interest rate cuts worked their way through the economy.<\/p>\n<p>Dodge, who worked with both Carney and Macklem during his years at the central bank, said there is no prohibition on communication between the government and the Bank of Canada. In fact, there is an expected degree of co-ordination between them.<\/p>\n<blockquote class=\"article-content--column\">\n<p>There\u2019s the big issue, always, of just how much support the bank is going to provide in terms of monetary policy<\/p>\n<p>David Dodge, former Bank of Canada governor<\/p>\n<\/blockquote>\n<p>While interactions directly with the prime minister can be somewhat rare,\u00a0partly\u00a0depending on whether a specific issue or crisis has arisen, he said there tends to be fairly regular contact between the governor of the Bank of Canada, the finance minister of the day and the department of finance.<\/p>\n<p>\u201cOur system envisages a discussion between the government and the bank in terms of a degree of co-ordination of monetary and fiscal policy. Independence of the bank doesn\u2019t mean that the bank and the government don\u2019t talk,\u201d Dodge said.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>\u201cCertainly there\u2019s the big issue, always, of just how much support the bank is going to provide in terms of monetary policy,\u201d he added.<\/p>\n<p>Central bank independence has been a cornerstone in most developed nations\u00a0for decades, largely insulating\u00a0them from short-term electoral considerations, through either legislation or practice, and leaving them to focus on keeping the economy from getting overheated and inflation in check.<\/p>\n<p>But Carney would be well aware of\u00a0how even optics\u00a0can raise\u00a0questions\u00a0about how beholden the Bank of Canada is to the government of the day. In 2011, when he was still governor of the Bank of Canada, prime minister Harper\u2019s office released a photo of Carney seated across the desk from him in the prime minister\u2019s office. Seated beside Carney was\u00a0Harper\u2019s finance minister Jim Flaherty. Carney was later, in an article written by the then-editor of the Globe and Mail, described as looking \u201cuncomfortably like a political aide\u201d in the photo.<\/p>\n<p>According to that article by John Stackhouse, who is now a senior vice-president in the office of the CEO of Royal Bank of Canada, the relationship between Carney and Harper had grown chilly in the years before Carney left for the Bank of England in 2013. For one thing, he reported, Harper would summon Carney to his office, \u201cat times speaking to him in a lecturing manner about the economy.\u201d Tensions grew, according to the article, after Carney confided in private settings that Harper\u2019s government had been slow to respond to the financial crisis.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<figure class=\"embedded-image article-content--full_page\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=-Ju6_QvMtDegz-rOsQTDsw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=ullKjKsc6QFUkuzfVto4Eg 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=LlY3tEn0nvAuV7FsPuw7HA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=ZTHsuQGELdFXfNXhEYVIHw 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=iuGo7M4rlI0J3Rm7G8BywA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=VJIdCWJZ7GO6F8vKkTdOsQ 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=sz2T3-SyTOco_q9ZWSVvwg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=MX4f0GvSDvWWTMFh_jlKcQ 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=fVy9UYkQo-_5I_IWHwjMTw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=kx66ZtTCckBCnLk_5GHKug 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"David Dodge\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=xQbM5UX4h0rf777URpixsA\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=xQbM5UX4h0rf777URpixsA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=hIIGp8KGQjv9fleOkr0Tnw 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/david-dodgegs0724.jpg?location=full_page&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=bVb_kgJ14VCknErkpI3Zww\" height=\"1350\" loading=\"lazy\" width=\"2400\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">Former Bank of Canada governor David Dodge, pictured in 2012, said \u201cindependence of the bank doesn\u2019t mean that the bank and the government don\u2019t talk.\u201d<\/span> <span class=\"credit\">Photo by Gavin Young<\/span> \/<span class=\"distributor\">Calgary Herald<\/span><\/figcaption><\/figure>\n<p>Harper was no doubt a hands-on prime minister when it came to the Bank of Canada, keen to tap his\u00a0two degrees\u00a0in economics to discuss the bank\u2019s research, according to a former central bank official who spoke on condition of anonymity.<\/p>\n<p>\u201cThere is an extra layer of conversation there between two economists,\u201d this person said. \u201cHarper knew the governor\u2019s job well, and was a big reader of economic research papers; he liked to discuss stuff like that.\u201d<\/p>\n<p>While these discussions were less than welcomed by some central bank officials, they did not bleed into steering the central bankers on the direction of interest rates.<\/p>\n<p>\u201cNot the actual conduct of monetary policy \u2014 never,\u201d the former central banker said.<\/p>\n<p>Over the past decades, the frequency and location of meetings and informal confabs have changed, depending on the situation and personal styles of prime ministers. Sometimes they have taken place in neutral locations, such as Ottawa hotels, while others have occurred in the prime minister\u2019s office. Still others have taken place over the phone.<\/p>\n<p>The current period of uncertainty with Donald Trump\u2019s trade war and the potential for a recession is expected to lead to more interaction between central bankers and politicians than in predictable times. And they may not find themselves on the same page with monetary policy responses \u2014 particularly now that Carney will be at least perceived to have some regard for his political fortunes and that of his party.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>\u201cI suppose that Mr. Carney\u2019s expertise might favour a certain type of monetary policy, but his political interests might favour something else \u2014 and that would be an interesting dynamic to observe,\u201d said Paul Daly, a professor at the University of Ottawa who specializes in government institutions.<\/p>\n<blockquote class=\"article-content--column\">\n<p>I suppose that Mr. Carney&#8217;s expertise might favour a certain type of monetary policy, but his political interests might favour something else<\/p>\n<p>Prof. Paul Daly, University of Ottawa<\/p>\n<\/blockquote>\n<p>If there is a disagreement and push comes to shove, Carney will have the edge, he said. While never been used to date, the Bank of Canada Act of 1985 gives the government leeway under certain conditions to direct the central bank on monetary policy for a specified period via \u201ca written directive,\u201d and even the power to get rid of the governor in specific circumstances.<\/p>\n<p>\u201cThere are certainly many levers within the Bank of Canada Act that a Carney government could use to influence monetary policy, should it be so inclined,\u201d Daly said.<\/p>\n<p>Central bank watchers and former Bank of Canada officials say they don\u2019t expect to see anything that dramatic, or even as overt as Freeland\u2019s public statements in 2023. And simmering backroom friction seems equally unlikely, according to those who have worked with both Carney and Macklem.<\/p>\n<p>\u201cHe (Carney) can pick up the phone,\u201d Dodge said, adding that this in itself would not challenge the central bank\u2019s independence. \u201cEither one of them can pick up the phone.\u201d<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>While informal discussions between the two men would probably stay behind closed doors, their existence would be made public if the government and central bank co-ordinated fiscal and monetary policy, particularly in a time of crisis, Dodge said.<\/p>\n<p>\u201cWhen the bank and the government clearly have talked and made a decision that their fiscal policy is going to work in a particular way, and monetary policy is going to support it, there\u2019d be a communication that has taken place,\u201d he said.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<figure class=\"embedded-image article-content--full_page\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=AvS-uDbvxr6SYmf_FHtHWw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=rD7vJ_i9nDwd-ktGTKmdgw 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=uWjRsATqXNpzBlfx3TZlRg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=Z-ooRjDBZXhBqV59B60G9Q 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=PvkD6yYo9mcmuLFKRURNvw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=2ZiaA1YdnrouS2rpiigyNQ 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=1Y2Uvp27yLeZTVDwdPpEbw,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=9F6FyusKCDBInU6XLdsxRA 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=xYco62r3lKzLhCBCL3ieAw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=57LYms3KPSlTqcMnXGX3Lw 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"Stephen Harper and Mark Carney\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=FlZCXqHZKjfu4UgVlzqeYg\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=FlZCXqHZKjfu4UgVlzqeYg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=_ti5hl1xBruxrJyHlpjhzA 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/Carney-harper-gs0724.jpg?location=full_page&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=7-zG1ifOpn-QFQ-jEqK5lQ\" height=\"1350\" loading=\"lazy\" width=\"2400\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">Bank of Canada governor Mark Carney, right, meets with Prime Minister Stephen Harper in Harper\u2019s office on Parliament Hill in Ottawa on Jan. 31, 2008.<\/span> <span class=\"credit\">Photo by Christopher Pike<\/span> \/<span class=\"distributor\">Canwest Photo Service<\/span><\/figcaption><\/figure>\n<p>\u201cNot the debate to get to that point, but communication after the fact is quite important in terms of coordination of policy \u2014 that is not perceived as undermining the bank\u2019s independence, but rather that this was done explicitly for good reason, for economic growth, for economic stabilization, or whatever.\u201d<\/p>\n<p data-async=\"\">In the early days of the coronavirus pandemic in March 2020, for example, then Bank of Canada governor Stephen Poloz frequently appeared beside finance minister Bill Morneau. Lane referred to this as presenting a united \u201cTeam Canada\u201d approach.<\/p>\n<p>When Carney and Macklem are sitting across from each other rather than beside each other as they did at the Bank of Canada,\u00a0their relationship is unlikely to be comparable to a corporate world relationship of former boss and subordinate, said Western University\u2019s Williamson.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>\u201cWhile Macklem was technically No. 2 to Carney\u2019s No. 1, the governing council of the Bank of Canada tends to be a collegial group \u2014 at least that\u2019s what they project,\u201d he said, suggesting that reaching a consensus would be the norm for the two men even if Carney were weighing the political impact.<\/p>\n<p>If there were to be a disagreement between Carney and Macklem, Lane, who worked with both at the Bank of Canada, said he doesn\u2019t think the latter would feel beholden to his former boss.<\/p>\n<p>\u201cTiff doesn\u2019t owe his job to Mark Carney,\u201d he said, adding that it was Justin Trudeau\u2019s government, not Carney\u2019s, that put him in the top job at the central bank. And while Macklem had served as senior deputy governor under Carney for three years, he returned as governor in 2020, seven years after Carney left.<\/p>\n<blockquote class=\"article-content--column\">\n<p>Tiff doesn&#8217;t owe his job to Mark Carney<\/p>\n<p>Timothy Lane, a retired Bank of Canada deputy governor<\/p>\n<\/blockquote>\n<p>\u201cObviously they worked together, but I don\u2019t think that really influences the degree of independence that Tiff would have.\u201d<\/p>\n<p>Lane retired from his role at the Bank of Canada six months into a steep period of interest rate increases to combat what had turned out to be persistent inflation. After a colossal 100-basis-point increase in July of 2022, Macklem said increases could have been started earlier, which may have blunted the need for such steep hikes.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>In a hypothetical scenario where Carney, as prime minister, had a different interpretation than Macklem when looking at economic data, Lane said he would be likely to express it \u2014 but within bounds to preserve the Bank of Canada\u2019s independence.<\/p>\n<p>\u201cHe would understand that it\u2019s not his role to try to influence what the Bank of Canada would do,\u201d Lane said. \u201cIn that kind of situation\u2026. It\u2019s a judgment call and often there are some different ways of looking at (data) and different views, but somehow those have to be balanced to figure out what action to take.\u201d<\/p>\n<p>In such a scenario, receiving input from someone with Carney\u2019s experience would be preferable to some of the political commentary the Bank of Canada dealt with in the past.<\/p>\n<figure class=\"embedded-image article-content--half_width_right\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=webp&amp;sig=KjuDddVA8VTC_qLZzW661w,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=webp&amp;sig=gD4-lqUHAbk-aBXPgPl3Lw 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1200&amp;type=jpg&amp;sig=VH0RuOOgK9XA9jHphlb7aw,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=2400&amp;type=jpg&amp;sig=YWHKjt7a6V6xGGbfcHK24Q 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=768&amp;type=webp&amp;sig=F2ppa_8L9tYdSB3z7-1yWw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=webp&amp;sig=0rnruIoJJwKWLfTFO47rqw 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=768&amp;type=jpg&amp;sig=Xhfm-YCHCVM_7Y_8yiCq_A,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=1536&amp;type=jpg&amp;sig=vtnTJ6p8AHmxQLhser8tdQ 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;type=webp&amp;sig=giBQHlHdGHV-ueAr7SdfEQ,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=750&amp;type=webp&amp;sig=cLLAYPw8zAcP9WWDcKH20Q 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"Stephen Poloz\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=7qd6cJsLMPtxcKgTZbT0zA\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=375&amp;sig=7qd6cJsLMPtxcKgTZbT0zA,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=90&amp;strip=all&amp;w=750&amp;sig=4TFo3gyoZcMe5qndGE3Viw 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/stephen-poloz-gs0724.jpg?location=half_width_right&amp;quality=5&amp;strip=all&amp;w=100&amp;sig=mjesfqG7w6DBMcyU7i3nbg\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"image-caption\"><span class=\"caption\">When Stephen Poloz was governor of the Bank of Canada he frequently appeared with then-finance minister Bill Morneau to present a \u201cTeam Canada\u201d approach.<\/span> <span class=\"credit\">Photo by Nathan Denette<\/span> \/<span class=\"distributor\">The Canadian Press<\/span><\/figcaption><\/figure>\n<p>\u201cThe more different insights (that) go into the process, probably, the better,\u201d he said.<\/p>\n<p data-async=\"\">Lane said Carney would also be sensitive to being on the receiving end of the ire of an unhappy politician, having drawn rebukes for his take on Brexit while governor of the Bank of England ahead of the crucial vote on Britain pulling out of the European Union.<\/p>\n<p>\u201cIn the U.K., over Brexit, he had to give the Bank (of England\u2019s) best analysis of what the consequences of Brexit would be, and that didn\u2019t make him popular with a number of politicians,\u201d Lane said. \u201cBut he was sticking in his role and that was as an independent, taking a clear, independent view of the economy.\u201d<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<p>Powell, the Fed chair, has for months stood firm in his view that it is too soon to cut rates, despite the escalating public clash with Trump. While Trump called on him to either slash rates or resign, he has held his ground in asserting that Trump\u2019s tariff war could push inflation higher.<\/p>\n<p data-async=\"\">But Trump has since turned to name-calling, dubbing Powell \u201cstupid\u201d and a \u201cknucklehead\u201d and pondering whether he should be replaced by someone such as Treasury Secretary Scott Bessent. Officials in Trump\u2019s administration, meanwhile, accused Powell of either lying to Congress or grossly mismanaging the US$2.5-billion renovation of the Fed\u2019s Washington headquarters. In an added insult, Bessent said in a July 15 television interview that the search was on for Powell\u2019s successor, even though his current term doesn\u2019t expire until next May.<\/p>\n<p>To most observers, such a level of politicization in Canada is unthinkable, even if Carney and Macklem do not always agree.<\/p>\n<p>\u201cThe close relationship between Macklem and Carney is obviously unusual but I don\u2019t see any threat to central bank independence inherent in the situation,\u201d said Paul Wachtel, professor emeritus at the Stern School of Business at New York University who conducted research on the topic.<\/p>\n<p>\u201cBoth men know the value of central bank independence and are unlikely to cross any red lines,\u201d he added.\u00a0 \u201cI can\u2019t imagine that Carney would in any way message the central bank that he knows better or try to influence their decisions. He has been an economist (and) central\u00a0banker far longer than he has been a politician.\u201d<b\/><\/p>\n<p data-async=\"\"><em>\u2022 Email: bshecter@nationalpost.com <\/em><\/p>\n<p data-async=\"\"><em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em><\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--feature\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt-val=\"{\" control_fields=\"\" data-evt-typ=\"page_scroll\">\n<p>Share this article in your social network<\/p>\n<\/section>\n<\/div>\n\n<br \/>Carney, Macklem duo brings unique dynamic to Canada<\/a><br \/>\n<br \/>2025-07-24 16:25:43<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links Economy Two of the most powerful men in Ottawa share a history and experience, but what happens when times of crisis amp up natural tensions between the&#8230;<\/p>\n","protected":false},"author":2,"featured_media":62291,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-62290","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=62290"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/62290\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/62291"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=62290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=62290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=62290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}