David Eby wants to run against Donald Trump because he knows he can’t run on his economic and fiscal record. Our latest for @thehubcanada. thehub.ca/2026/09/29/eby-wan…

Carneynomics’ planning instinct is giving way to “policy adventurism” The abrupt departures this week of the heads of two agencies central to Mark Carney’s economic agenda represent an early challenge to Carneynomics. Doug Guzman is reportedly leaving the Defence Investment Agency after barely a year, frustrated by the slow pace of the federal bureaucracy. Laurel Broten resigned as chief executive of Invest in Canada just two weeks before the agency’s marquee investment summit. The political intrigue surrounding the departures is inevitable. But the more important question is what they reveal about Carney’s governing philosophy. Carneynomics isn’t quite the same as Trudeaunomics. Carney is more comfortable with a pro-efficiency agenda. He understands capital formation and doesn’t seem to share the Trudeau government’s heterodox belief that almost any spending undertaken in the name of equality or inclusion is somehow itself growth-enhancing. Where the two projects overlap is in their confidence in a form of state planning. The apogee of Trudeau-era planning was the failed EV strategy. The Carney government’s planning instincts are manifest in its new governmental machinery, including Build Canada Homes, the Major Projects Office, the Defence Investment Agency, Invest in Canada, and a proposed sovereign wealth fund. Each reflects the belief that economic outcomes can be improved by assembling highly credentialled people, giving them elaborate mandates, and asking them to steer capital toward national priorities. Dominic Barton’s appointment as chair of Invest in Canada fits the pattern. Barton is accomplished and well connected. His career also reflects the prime minister’s misplaced confidence that technocracy can overcome the incentives and limitations of government itself. The early evidence is less reassuring. Build Canada Homes has struggled to translate ambition into houses. The Major Projects Office has produced more process than major projects. The agency created to accelerate defence procurement is reportedly losing its chief executive because procurement remains slow. The investment-promotion agency lost its leader on the eve of a summit intended to demonstrate Canada’s new seriousness about investment. My colleague @CharlesLammam calls this pattern “policy adventurism.” Each new agency is a tacit admission that the existing machinery of government cannot deliver. But rather than do the hard work of repair or retreat, governments superimpose new structures on top of the old ones. The result, as Lammam puts it, is a state that is simultaneously bigger and weaker. Each workaround pulls talent, budget, and attention away from the departments left behind. The incapacity that prompted the bypass gets worse, inviting the next workaround. It is a vicious cycle disguised as institutional innovation. The alternative to policy adventurism is often for government to do less. Broad-based tax cuts, deregulation and fiscal restraint may seem less ambitious than new missions, funds, and agencies. But they make fewer demands on the state’s limited knowledge and administrative capacity. Carney has often treated such conservative economic orthodoxy as ignorant or simplistic. Cut taxes. Remove regulations. Restrain government. These prescriptions lack the intellectual texture of technocratic planning. But they aren’t simple-minded. They’re simple by design. They work with the limits of government rather than assuming those limits can be organized away. This is the central insight of conservative orthodoxy. It isn’t that the economy is simple. It’s that government is limited. Carney may understand capital. But this week’s turmoil raises questions about whether he understands the limits of statecraft.

"If Carney’s speech becomes the intellectual foundation for a new wave of indiscriminate economic nationalism—or for a naïve re-embrace of Chinese trade under a different vocabulary—it will age poorly. But if it’s taken for what it appears to be—a clear-eyed description of a world Canada did not choose but must now navigate—it may prove to be one of the most consequential foreign-policy speeches delivered by a Canadian prime minister in some time."

There's suddenly a lot of talk about tax increases and spending cuts in Ottawa. This has to be understood as an unfortunate yet predictable consequence of Trudeau-era fiscal policy. Increasing program spending by 110% over a decade through large-scale borrowing has necessarily led to a structural deficit that has to be solved by higher taxes and/or lower spending. This trade-off is particularly challenging because the massive growth in spending in the Trudeau era didn't even get us to our NATO target on defence. It was spent on other stuff mostly in provincial and local jurisdictions. So now the Carney government is in fiscal box built by its predecessor. It needs to figure out how to (1) increase defence spending, (2) keep taxes low and competitive, (3) preserve core programs, and (4) reduce the deficit. One wonders if this outcome was actually intentional by the Trudeau government. By not litigating Harper-era tax policy and its lower revenue baseline and then increasing spending against it through large-scale borrowing, the government laid the fiscal groundwork for the eventual arguments in favour of tax hikes to offset new, higher, and permanent levels of federal spending. If Conservatives are accused of “starving the beast”, one way to think about the Trudeau government’s fiscal policy as a strategy to “inflate the state.”