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Earlier this month, Canada’s Liberal Party chose as the country’s new prime minister to replace Justin Trudeau, who announced his resignation in January. Carney, a former central banker and economist, is stepping into the role of prime minister at a particularly tense time for US-Canada relations.

To help make sense of recent shifts in US-Canada relations and break down what’s next for Canada’s domestic politics, we asked SIS visiting scholar in-residence Taylor McDonald a few questions.

Who is Mark Carney, and why was he the Liberal Party’s choice to succeed former Prime Minister Justin Trudeau?

Mark Carney is not a newcomer to Canadian government, though he has never held an elected position. Carney previously served as governor of the Bank of Canada and Bank of England (the first non-British citizen to do so in history). Following Justin Trudeau’s declaration that he would step down as Liberal Party leader and as Canada’s Prime Minister, the Liberals began a search for a replacement. Carney defeated three competitors in a landslide that saw him capture roughly 85 percent of the vote.

Carney’s rise is a product of several factors in Canada’s domestic and international affairs. His competitors for Liberal leadership were hampered by relative anonymity (Karina Gould and Frank Baylis were not widely known across the country) and Chrystia Freeland, Trudeau’s former Deputy Prime Minister and the candidate expected to be Carney’s biggest challenger, seemed unable to persuade voters that she represented true change from Trudeau. For years, Freeland literally and figuratively stood beside Trudeau through thick and thin, often publicly championing several of the former government’s policies that became deeply unpopular in Canada.

Internationally, Carney’s leadership comes at a time when Canada finds itself in a trade war with the US as President Donald Trump has placed 25 percent tariffs on most Canadian goods shipped to the US, including Canadian steel and aluminum. Carney’s credentials as an economy-first leader with proven experience seemed to soundly resonate with voters as Canada’s southern neighbor ramps up economic (and territorial) threats against it.

Prime Minister Carney has become the leader of the Liberal Party amidst a trade war with the US and from President Donald Trump. What challenges lie ahead for Carney as he navigates relations with the US and Trump?

Carney is leading a country that is in the midst of a national identity crisis. Explored in my recent book, , Canada’s tensions with the Trump administration highlight competing elements within Canadian national identity. On the one hand, Canadians often define themselves as ‘not Americans’ and revel in self-narratives of difference, casting themselves as the friendlier, more empathetic, and more internationally conscious resident of the North American continent. On the other hand, Canadian politicians frequently remind the US Administration that Canada is America’s 'closest friend and neighbor,’ casting the Trump-era hostilities as all the more unsettling. Some have mused that tensions with the US will result in Canada further embracing its transatlantic ties and potentially requesting to join the EU. In any case, Carney is now at the helm of a country whose residents are seriously contemplating whether Canada really is or should be America’s closest ally going forward.

Under President Trump, the America First agenda is back, but with some differences from the first term. While Trump’s first term was defined by transactional bilateralism, the second appears markedly more revisionist, leaning into claims of territorial expansion and a mercurial approach to America’s historical allies and adversaries alike. Carney confronts a US president who openly flaunts his goal of making Canada “the 51st state” through “economic coercion,” called the Canada-US border an “artificially drawn line,” and threatened not to come to the aid of NATO members if they fail to meet their two percent defense spending marks. Between annexation threats and the Canada-US trade war, Prime Minister Carney finds himself leading the country at one of the lowest points in the history of Canada-US relations. Increasingly, Canadian politicians have called on Carney to refuse to sit down with President Trump unless his language of annexation ceases. At the same time, the premiers of Canada’s provinces have taken their own initiative to respond to the tariffs, with Ontario Premier Doug Ford threatening to impose a surcharge on Ontario’s electricity exports to several northern US states (which was recently abandoned). This aggressive response does not appear consistent with the new Prime Minister’s approach for now. Carney has made clear that he plans to defend Canadian sovereignty, called the tariffs unjust, and leaned into strengthening Canada’s economic ties with European countries, but he has not publicly refused to speak with or work with the current US president.

Former Prime Minister Justin Trudeau announced his resignation in January. What do you think his legacy in Canadian politics will be?

Elected in 2015, then again in 2019 and 2021, Justin Trudeau served as prime minister for more than nine consecutive years. Swept into office as a change candidate after Conservative leader Stephen Harper’s nearly 10-year tenure, Trudeau promised “sunny ways” for Canada and sought a more progressive, socially conscious, and internationally connected Canada. Yet, much of Trudeau’s tenure was marked by major international challenges and mixed results in confronting them. With the surprise election of Donald Trump as US president in 2016, Trudeau adopted a relatively meek approach to the US during Trump’s first term, leaning heavily into flattery and friendliness. His government appeared slow to coordinate a substantive response to the often fickle US president, perhaps believing that the election was a flash in the pan and that Trump lacked staying power (neither of which was true). Trudeau also steered Canada through the COVID-19 pandemic, and while the health measures imposed by the government allowed Canada to outperform other states by many measures, this period is best known for the so-called “Freedom Convoy” protests and the government’s handling of it. This protest, which saw large trucks blockading busy streets in Ottawa protesting against the government’s vaccination mandates, led to the government’s decision to invoke the Emergencies Act as police effectively dismantled the blockades and dispersed the protesters. Those looking favorably on Trudeau’s time in office will likely point to his reconciliation agenda with Canada’s Indigenous peoples, progress on gender equality as Trudeau’s cabinet was 50 percent women, his government’s championing of a feminist foreign policy, and Trudeau’s ardent support of Ukraine in its fight against Russian aggression.

Trudeau ultimately stepped down as polls showed a steady decline of his favorability amongst voters, though immediately following his statement that he intended to resign, his favorability actually increased. One thing to keep an eye on in the coming years: will Trudeau make another run at the Liberal leadership? At just 53 years of age, it is not out of the question that we will see Justin Trudeau in Canadian politics again. His father, Pierre Elliot Trudeau, was elected as Canadian Prime Minister multiple times, including after losing an election before being elected once again. Notably, as Justin Trudeau made several speeches regarding the end of his time as Prime Minister, nothing suggested that he was ‘all the way out.’

Carney is expected to call a this month and dissolve parliament, with a vote expected by the end of April. What do you anticipate is next for Canada’s domestic politics heading into the election?

This upcoming election will almost certainly be about who best articulates a Canada First agenda to deal with Canada’s southern neighbor. The Liberal Party had been slumping in the polls until Trudeau declared his intention to step down. Within weeks, and with Carney elected as party leader, the Liberals’ fortunes miraculously changed. Current polling suggest the Liberals now have a lead nationally over the Conservatives for the . This Liberal resurrection is undoubtedly a product of a new political landscape shaped by the 2024 election of Donald Trump in the US. Trump’s election and subsequent verbal attacks on Canadian sovereignty and imposition of tariffs have simplified what was a more complex set of considerations for Canadians concerned about housing shortages and the cost of living. Thanks to the US president, it appears large segments of the Canadian population have converged around a singular goal of electing a leader that will stand up to President Trump, with other concerns occupying at best secondary considerations for now. The population’s turn to focus on Trump has stymied the momentum of Carney’s main challenger, Conservative leader Pierre Poilievre, who had been running a campaign based mostly on criticizing Trudeau. But with Trudeau now out, Carney in, and Canadians’ concerns centered on Trump, this election is likely to come down to who voters think is best prepared to handle Canada-US relations during this contentious period. At this point, momentum is with the Liberals.