MONTREAL – The state of the Canadian economy and U.S. President Donald Trump’s trade threats topped the agenda for the Liberal party’s English language leadership debate, the second in as many days and the last of the campaign.
Presumed front-runner and former Bank of Canada governor Mark Carney and former finance minister Chrystia Freeland clashed over the Liberal government’s record of economic management.
“Our economy was weak before we got to the point of these threats from President Trump,” Carney said. “That’s why we need big changes to how we’re managing this economy.”
He said the economy has relied in recent years on a big boost to the labour force caused by a surge in immigration, along with government spending that grew at a rapid clip.
Freeland argued that Canada is in a “strong fiscal position” and that Liberals should deliver solid economic and social policy at the same time.
“We need to be really careful not to repeat Conservative talking points,” she said. “Canada most definitely is not broken. We are a strong, resilient country.”
Freeland said she would improve productivity by improving interprovincial trade, recognizing the foreign credentials of professionals who are already here, cutting red tape to get large projects built, and protecting rural farmers — including supply management.
The candidates drew sharper contrasts with each other than they did in Monday’s French debate, though they stopped short of launching outright attacks.
Montreal businessman Frank Baylis positioned himself as the only candidate who understands business and politics, saying he’ll bring “fiscal discipline to Ottawa” by increasing productivity.
Former Liberal House leader Karina Gould said increasing productivity over a short period would not help balance the books.
She said that as the country faces a time of great economic stress, Ottawa should be there to support Canadians, just “like the federal government was during the pandemic.”
The candidates were each pressed to explain how they would react if Trump moves ahead with sweeping tariffs against Canada next week.
Carney said he would quickly gather the premiers together and hit back with dollar-for-dollar tariffs designed to have minimal impacts in Canada.
He said the United States is already showing signs of feeling the economic pain of Trump’s policies and that Canada “will amplify that.”
Freeland said she would immediately take aim at Trump’s best friends and hit them with a wave of targeted counter-tariffs that would cause an immediate stock market reaction.
“Our retaliation will be a lot smarter than their dumb tariffs,” she said, alluding to a Wall Street Journal editorial that called Trump’s tariff strategy “The Dumbest Trade War in History.”
She said lobby groups such as the American Farm Bureau would quickly complain to Trump about the Canadian products they need becoming too expensive.
“That reaction, that pain, will cause Trump, ultimately, to back down — just like he did last time,” Freeland said, citing her past involvement in dealing with the first Trump White House’s tariffs.
Baylis said Canada should “completely” support the industries Trump targets and not let him take Canadian jobs away. He said he would quickly meet with Mexican President Claudia Sheinbaum to rally a co-ordinated response to Trump.
“He’s not going to stop until he gets the lesson that he can’t get away with this,” Baylis said.
Gould pledged transparency in her approach, vowing to call together the premiers and share her plan with the entire country “because Canadians deserve to know.”
Liberal party members can begin casting advance votes for their preferred candidates as early as Wednesday.
This report by The Canadian Press was first published Feb. 25, 2025.
