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Mark Carney speaks during The Museum of American Finance Gala at the Ziegfeld Ballroom in New York on March 7.Jeenah Moon/Reuters

The federal government did not put an adequate focus on fostering economic growth in its recent budget, according to former Bank of Canada governor Mark Carney, who is often touted as a potential future Liberal leader.

The minority Liberals are trailing the Conservatives by double digits in public-opinion polls, and in a speech delivered this week, Mr. Carney carved out some daylight between him and Prime Minister Justin Trudeau with veiled criticisms of the budget.

Mr. Carney warned of the risks of “constant spending” and too much government subsidies, but he also congratulated the Liberals for their investments in housing and AI.

The Liberal Party member has not ruled out running for the top job if it becomes open. He saved his harshest critiques for Conservative Leader Pierre Poilievre. Mr. Carney described him as a “lifelong politician” whose beliefs on the role of government are “grounded in a basic misunderstanding of what drives economies.“

The former central banker for Canada and Britain has done nothing to temper speculation about his political ambitions and has recently taken part in a series of public events around the budget’s release that wade directly into the current political landscape.

On his party’s spending plan unveiled last week, Mr. Carney said: “It was a budget about fairness, as we know, and it wasn’t necessarily a budget about growth and resilience – and we need both.”

As an example of a different choice he would make, Mr. Carney said instead of subsidizing one more battery plant, he would have directed the federal purse to pay for a million-plus heat pumps for people who need them most.

“Some of these choices need to be more deliberately directed at people,” he said.

His speech was part of a Monday evening event in Toronto held by Canada2020, a progressive think tank with ties to the Liberal Party, and for which Mr. Carney is an advisory board chair.

In his speech, he said Canadians are living through a “hinge moment of history” that is being driven by financial, health and geopolitical crises, which he said are rewiring and reshaping the global economy. Those that succeed will be leaders in a net-zero economy and on the cutting edge of artificial intelligence, he argued.

“Governments that spend too much and invest too little will eventually pay a heavy price. The countries that nurture, welcome and celebrate risk-takers will thrive,” Mr. Carney told the Toronto crowd.

He described three possible government responses to the current moment. The first, he dubbed “spend, support and subsidize”; the second, he described as an approach to “demolish, destroy, deny”; and the third – which he championed – is what he described as seizing the moment as a “time to build.”

On the first, he said some governments are having an understandable response to the affordability pressures households are under and wanting to spend more and dole out subsidies. “The challenge is if you’re prioritizing the new, you can defund the old, like health care, and you can crowd out private initiative, and it can lead ultimately to an eventual and brutal reckoning.”

“This new era will demand fiscal discipline and a relentless focus on delivery, rather than reflex spending that only treats the symptom but doesn’t cure the disease,” Mr. Carney said.

The federal budget unveiled capital-gains tax changes that Mr. Trudeau has positioned as making the wealthiest Canadians pay more but have come under intense criticism. Many economists have said the tax increase will dampen investment and further hurt already weak productivity; the tax hikes have also been criticized by the innovation sector and medical associations.

The former central banker did not respond to a request from The Globe and Mail to expand on his comments.

On the flip side, Mr. Carney said a second and opposite response would be to “shrink the state in favour of unbridled capitalism. What could be termed demolish, destroy, deny.”

He noted that during the Brexit movement, supporters used to call Britain broken. “Does that sound familiar,” Mr. Carney asked the audience, in apparent reference to Mr. Poilievre’s position that “everything feels broken.”

“When politicians claim our great democracies are broken, it’s not because they want to fix them, it’s because they want a licence to demolish,” he said.

Mr. Carney was particularly critical of Mr. Poilievre’s campaign to axe the carbon price, noting that businesses need certainty. He said if the carbon price is cancelled, it needs to be replaced with an equally effective policy.

“When he shouts ‘axe the tax,’ he’s really whispering ‘can the plan’ and leaving us with nothing,” Mr. Carney said about the Conservative Leader.

He said his preferred government response to build includes what he called “mission-oriented capitalism, grounded in values, combining resilience, purpose and dynamism.

“Dynamism of the private sector so that Canada can seize the advantages in this hinge moment,” he said.

“You’ve probably gathered from my remarks I think we should be spending more time on that dynamism.”

Mr. Trudeau, as part of his postbudget tour, has done some interviews with U.S.-based podcasts. In one done with VOX, Mr. Trudeau defended his government’s new spending and its decision to raise taxes through capital-gains changes.

“Because when our economy is growing well and everyone is doing well, well, the wealthy will find lots of ways to make money off of a prosperous and successful middle class,” Mr. Trudeau said.

“I’m not worried about innovation and creativity, I’m worried about people being able to pay their rent and eventually buy a home.”

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