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Bank of Canada Governor Mark Carney (Fred Lum/The Globe and Mail)
Bank of Canada Governor Mark Carney (Fred Lum/The Globe and Mail)

POLITICS

How the Liberal Party lost Mark Carney Add to ...

Mark Carney was cast as the perfect alternative to Justin Trudeau by a tight network of Liberals who pulled out all the stops last summer to attract the Bank of Canada governor into the Liberal leadership race.

Mr. Carney was responsive to the efforts, and his actions over the summer – taking phone calls, asking questions about the race, staying over at a senior Liberal MP’s house during a week-long family holiday in Nova Scotia – fueled speculation about his candidacy.

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By September, Liberal officials were trying to put together a team of organizers and supporters, and mapping out Mr. Carney’s road to victory at next year’s Liberal convention.

Now, as Canadians digest the fact their central banker has been lured to London to become Governor of the Bank of England, The Globe and Mail has pieced together details of an alternative courtship of Mr. Carney by the Liberals. Dozens of interviews over the past few weeks provide clearer evidence of the effort to convince the man who’s been called the “outstanding central banker of his generation” that he had a shot at winning the Prime Minister’s Office.

Speaking to The Globe this week, Mr. Carney refused to go into details about the conversations, or explain why he didn’t immediately shut down the campaign as a non-partisan public servant working under a Conservative government.

He insisted, however, that he never actively sought the job or reached out to Liberals.

“I never made an outgoing phone call,” Mr. Carney said. “I never encouraged anybody to do anything.”

Mr. Carney tried to put an end to the speculation about a Liberal bid through Bank of Canada officials in late September. Then, in October, he went public in a more overt effort to kill the story, heaping scorn during a news conference on media questions about him entering politics.

“Why don’t I become a circus clown?” he told reporters in Nanaimo, B.C., on Oct. 15. “I have gainful employment and I intend to continue it.”

Six weeks later, however, Mr. Carney again gathered in front of journalists to reveal he was indeed switching jobs – but heading to London instead of the House of Commons’ opposition benches.

For Liberals seeking a socially progressive, fiscally conservative candidate to replace interim leader Bob Rae, though, Mr. Carney was an obvious choice.

The central banker’s pedigree and background closely matched the search criteria of more conservative-minded Liberal Party members – sometimes referred to as “Blue Liberals” – who had supported Paul Martin and had doubts about Mr. Trudeau’s ability to lead the party back to power.

One of Mr. Carney’s most prominent Liberal admirers was former New Brunswick premier Frank McKenna, now a Toronto banker who remains a political and business power broker in Canada. “Frank was a booster,” said one of the former premier’s circle of Liberal contacts.

However, the Liberal said, Mr. McKenna was not as involved in laying the groundwork for a Carney candidacy as Tim Murphy, a Toronto lawyer and former chief of staff for Prime Minister Paul Martin. The Liberal organizer said he was less confident about recruiting Mr. Carney this summer, putting the odds at the time at 25 per cent. “I was not as optimistic as Tim,” the Liberal said.

Still, the Liberal said the sense in party circles is that Mr. Carney has “Liberal DNA” and is ambitious enough to envision himself as being prime minister one day.

The Northwest Territories-born banker is bilingual, with unimpeachable economic bona fides and evidence of a social conscience that would appeal to Liberals. Many of the ties that exist to this day between Liberals and Mr. Carney date back to his time as a senior bureaucrat under the Martin government, including personal friendships that played a part in the courtship from Liberals last summer.

Speaking to The Globe, Mr. Carney said he had been previously approached by people from across the political spectrum about entering politics, and would not confirm any Liberal leanings.

“Certain people want things to happen … the political world, it seems to me, is a world for optimists. I’m in a world that’s a world for realists.”

He declined to divulge what he told Liberals who contacted him last summer. “This isn’t True Confessions,” he said.

In fact, much of the organizational work on behalf of Mr. Carney was kept quiet, with some Liberal sources saying they were sworn to secrecy. Still, the effort was concerted. Liberal sources said Mr. Murphy made a number of phone calls over the summer to “get organizers and support around the country” for Mr. Carney.

“I got a call in the summer from Tim Murphy, who was at one point very convinced that he was going to run,” said a veteran Liberal organizer with a winning track record in the party.

A Liberal MP was also contacted by Mr. Murphy and urged to avoid offering his support to Mr. Trudeau before Mr. Carney made a final decision. “Timmy really didn’t say much other than to keep my powder dry. He was purposefully evasive with any details around any conversations that would have taken place.”

Liberal MP and former bank economist John McCallum spoke to the governor in mid-August. After addressing a controversy over the bank’s decision to remove a scientist of Asian origin from the original design of its $100 bill, Mr. McCallum said he raised the issue of the Liberal leadership with Mr. Carney.

“I chatted with him a little bit about it,” Mr. McCallum said. “He didn’t say yes and he didn’t say no.”

Other Liberal organizers said Mr. Carney responded to inquiries by seeking clarification about the job, but also about what it would take to beat Mr. Trudeau at the convention next April. “He asked questions,” said a well-known party organizer who was tasked by Liberals with finding answers for Mr. Carney.

The pro-Carney Liberals discussed a strategy that would entail signing up a set number of members in every riding in the country, as the leadership rules give equal weighting to all 308 ridings. The sense was that Mr. Trudeau would have more support on the first ballot, but that Mr. Carney might be able to win more second-place support than Mr. Trudeau from the other leadership camps.

Liberals sensed that Mr. Carney was one of theirs, and that he could be sold to the party membership.

As governor, Mr. Carney startled more than a few central bank watchers in 2011 by sympathizing with the frustrations of the Occupy Wall Street movement. That same year, he told Reader’s Digest that he found Bay Street culture too materialistic for his liking.

Mr. Carney’s father, Bob Carney, ran as a Liberal Party candidate for Edmonton-South in the 1980 election.

Mr. Carney spent a part of the summer in the company of his Liberal boosters, expanding on the traditional duties of a Governor of the Bank of Canada with a surprising speech to the Canadian Auto Workers and a human-interest interview with a Nova Scotia Web publication that focuses on political and business news. The moves gave the impression that he was trying to gauge his ability to connect to a new audience.

The central banker and his family stayed for close to a week at Liberal finance critic Scott Brison’s Nova Scotia seaside home last summer, a visit that took place as members of the opposition party mounted the effort to recruit him.

Mr. Brison and his spouse own a house in the small community of Cheverie on the west coast of Nova Scotia. The modest two-storey house has a commanding view of Minas Basin, an inlet of the Bay of Fundy known for very high tides.

Mr. Carney, his wife and family stayed at Mr. Brison’s following a keynote speech the central banker delivered to a Nova Scotia gathering of East Coast business elites. It is an annual invitation-only event organized by Mr. McKenna at the luxury Fox Harb’r golf resort and spa.

Mr. Brison, one of the party members who’s been identified as expressing interest in seeing Mr. Carney helm the Liberal Party, declined to speak about hosting the central banker and his family – or what was discussed during the stayover. “Cheverie is our home and private space, not something I really discuss,” he wrote in an e-mailed response.

Mr. Carney declined to discuss his family’s stay with Mr. Brison, a politician he’s known since the central banker was a senior bureaucrat in the Finance Department and the Liberal was public works minister. “I’m not talking about my personal life when I’m on a private vacation; full stop. So I’m not going to entertain your question.”

While he was on his Nova Scotia holiday, however, the central banker found the time to sit down for an interview with longtime Brison aide and writer Dale Palmeter. The Q&A posted on allNovaScotia.com included a discussion about how Mr. Carney relieves stress by running at least five times a week, playing tennis with his wife and cross-country skiing.

The central banker went on to discuss the benefits of moderation in eating, saying he’d much rather give his children a small serving of full-fat yogurt than a larger serving of diet yogurt. He told Mr. Palmeter he thinks Reader’s Digest named him the “most trusted Canadian” in 2011 because “I call a spade a spade.”

In the interview, Mr. Carney said that his biggest concern in Canada was “income inequality,” a theme that Mr. Brison raised with Mr. Carney during parliamentary hearings at the finance committee of the House this year.

The Bank of Canada refused to answer any questions about the Carney family’s stayover at the Liberal finance critic’s Nova Scotia home.

The bank’s conflict of interest policy, however, says employees must avoid “the appearance of impropriety” as well “avoiding actual impropriety.” It advises central bank staff to ask themselves “does it feel right” when deciding whether to accept hospitality or gifts or other benefits – and to consider: “Is there an alternative action that would not pose an ethical conflict?”

By deciding to leave for England next year, Mr. Carney becomes the first Bank of Canada governor to bow out of the job early since 1961, when James Coyne quit over disagreements with Progressive Conservative prime minister John Diefenbaker. The move to Britain was particularly surprising because Mr. Carney had publicly denied that he had any intention of leading the Bank of England. “I have my job … and I absolutely intend to fulfill that role,” Mr. Carney told CTV in August.

While Mr. Carney is quitting Canada for the Bank of England, a decision he called a “hard choice,” there is nothing to suggest he’s ruled out a political career in Canada down the road.

His term at the British central bank is five years, meaning that unless things change the Carney family will be back in Canada in 2018. Depending on the Liberal fortunes in the next federal election, expected by 2015, Mr. Carney could be in an even better position to contemplate a leadership bid.

One of the concerns among Liberals about Mr. Carney’s potential candidacy last summer was whether he could successfully jump into the world of politics from his non-partisan position at the Bank of Canada.

He would have had to leave his job before the end of his term, which would have irked those who wanted him to continue his stewardship of Canada’s financial system. But he would have also had to answer questions about his working relationship with the Conservative government at the same time as he had prepared his bid for the Liberal leadership.

Sources say Mr. Carney started to express similar doubt during the summer about the Liberal option, telling some that it would not be appropriate to go straight from the governorship into politics.

Another worry for Liberals was Mr. Carney’s lack of political experience. There is a history in Canada of smart and talented candidates who fail to get support at the ballot box. The last full-time Liberal leaders, Stéphane Dion and Michael Ignatieff, bombed despite impressive intellectual qualifications.

Over the summer, Mr. Carney voiced concern about the toll that politics takes. He told one colleague he was not willing to take on the brutal life of politics, at least not with a young family. But he was determined on one count – to continue a career in public service.

Mr. Murphy and Mr. McKenna, for their part, refused to answer questions about their efforts in favour of Mr. Carney’s candidacy.

Mr. Carney said that any talk of him being courted by Liberal officials needs to be taken “with a grain of salt.”

“People approached me as they approach others about these issues,” he said. “People approach you and say, ‘Shouldn’t you do X?’ or ‘Would you do X or would you do Y?’ and the question is whether you do it,” he said.

“I didn’t do it.”

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