Mark Carney, Cutthroat Capitalist

On March 9, when Mark Carney became the Liberals’ new leader and the prime minister–designate, it was easy to get lost in the day’s big-ticket headlines. There was his stunning 85.9 percent sweep of the vote. There was his full-throated attack on US president Donald Trump. There were the uncomfortable facts that he is not a sitting member of Parliament, has never held elected office, and speaks halting French. His highest-profile announcement was probably his plan to eliminate the consumer carbon tax. But just as important, even if it flew under the radar, was another change: Carney promised to scrap the Liberals’ capital gains tax hike. “We think builders should be incentivized for taking risks,” he said on stage in Ottawa, “and rewarded when they succeed.” Carney, as voters have been endlessly reminded in the lead up to the April 28 federal election, is an economist with a bachelor’s from Harvard University and a master’s degree and a doctorate from Oxford University. So he, of all people, must have known that, in his victory speech, he was deliberately mischaracterizing the nature of capital gains taxes and the reason the Liberals proposed the increase in the first place. Bear with me a moment: for those not wealthy enough to bother learning about capital gains—which is to say, most of us—the term refers to profits made from selling an asset like property or stock. In Canada, capital gains are taxed at a 50 percent inclusion rate. Income, on the other hand, is taxed at 100 percent. So if you work for a living, all your earnings are taxable. But if you make your money flipping houses or day trading, only half of that is taxable. Does that seem fair to you? Me neither. The Liberals’ increase to the capital gains tax introduced last year was paltry: the inclusion rate would have gone up to only about 67 percent and would be only on profits over $250,000. You would have to be very, very rich for this to impact you; by the government’s own estimate, although only 0.1 percent of Canadians would be affected, the hike would bring in more than $19 billion in revenue over five years starting in 2024/25. But after various private interest groups raised hell, Carney and the Liberals caved. More so than ending the consumer carbon tax—which, for all its policy merits, was a political albatross—killing the capital gains tax increase was nothing but a gift to the ultra rich.

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That shouldn’t come as a surprise. Carney’s case to Canadians is that, as the governor of the Bank of Canada during the financial crisis and as the leader of the Bank of England during Brexit, he’s a proven manager in times of economic turmoil. If the polls are accurate, the pitch seems to be working. But even putting aside the legitimate issues here—his eagerness to take credit for whatever worked and sidestep blame for whatever didn’t; the fact that, as any economics freshman can tell you, there’s a world of difference between managing a country’s monetary policy and its fiscal policy—Carney’s time as a central banker is only one part of his résumé. His work in the private sector is just as illuminating. And far from the devoted public servant depicted in his campaign biography, this career reveals a cynical operator at home in some of the darkest corners of twenty-first-century capitalism. Carney’s time with Brookfield Corporation has come under close scrutiny. Brookfield is hardly a household name, but with more than $1 trillion (US) in assets, it’s one of the world’s biggest investment firms and one of Canada’s largest publicly traded companies. It has stakes or controlling interests in a jaw-dropping range of properties and industries: iconic real estate developments like Canary Wharf in London and Manhattan West in New York’s Hudson Yards; casinos, lotteries, and sports-betting companies; insurance, infrastructure, and mining concerns; and too many others to detail here. Early in the campaign, the Conservatives tried to make a meal out of Brookfield’s decision last year to shift the headquarters of its asset management arm from Toronto to New York; at the time, Carney was board chair. The move was a strategic play to access more American stock exchanges, standard for any asset manager tasked with growing capital for clients like endowments and sovereign wealth funds. In truth, it was the least of Brookfield’s sins and the least of Carney’s. No jobs were relocated or lost. But he didn’t do himself any favours by initially lying about his involvement. A far more serious concern is the company’s long and well-documented history of tax avoidance. As the New Democratic Party has highlighted, between 2021 and 2024, when Carney was there, Brookfield made $23.3 billion (US). Since Canada’s corporate tax rate is around 26 percent, the company should have paid $6.1 billion (US) in taxes. But using a variety of loopholes, including offshore tax havens, the company paid only about $2 billion (US), meaning that Canada lost out on nearly $4.1 billion (US) in revenue. (Brookfield Asset Management, under Carney’s chairmanship, made $1 billion [US] in profit and paid nothing.) Meanwhile, a 2023 report from the Centre for International Corporate Tax Accountability and Research described Brookfield as “Canada’s top tax dodger.” CICTAR documented a range of shady dealings from as far afield as Colombia (where Brookfield bought a state-owned electric company and massively increased costs to consumers) and Australia (where, contra Carney’s purported dedication to public health care, Brookfield owns one of the country’s largest and most troubled private hospital operator). Brookfield manages all those subsidiaries—and dodges all those taxes—via a network of shell companies registered in a variety of havens, including Bermuda, the Cayman Islands, and Panama. The company’s structure is bafflingly opaque, with industry analysts raising repeated questions about its deceptive accounting practices, including its habit of buying and selling assets between its various divisions. It’s true, of course, that most of Brookfield’s tax avoidance is probably lawful. But as the CICTAR report says, “Aggressive tax avoidance, whether legal or not, deprives governments of revenue desperately needed to fund essential public services—including health, education, and sanitation.” Not a great look for a supposed public servant like Carney. It’s true that a board chair is not the same thing as a CEO. But that wasn’t Carney’s only role. He personally oversaw much of the company’s renewable energy investment portfolio, with at least two of Brookfield’s pension funds registered in Bermuda at an on-paper address that hosts dozens of other entities. (The three-storey building—whose address is, appropriately enough, on Front Street—houses a local bike shop on the first floor.) Another fund launched under Carney, along with more than a dozen other Brookfield-linked businesses, is registered at an infamous Cayman Islands address called Ugland House. It’s home to some 18,000 corporate entities, and a place former US president Barack Obama once said must be either “the largest building in the world or the largest tax scam in the world.” Carney and Brookfield often point out that one of its chief focuses is green energy. But many of the most serious accusations against the company stem from those very projects. (Plus, in several cases, Brookfield has privatized renewable energy developments that were once publicly owned.) A recent CBC report outlined a litany of allegations against Brookfield—all during Carney’s time at the company—from Indigenous communities around the world, mainly over its holdings in hydroelectric dams. Global Witness, a respected non-governmental organization, has accused Brookfield and its subsidiaries of shocking crimes in Brazil, including wide-scale deforestation and the use of slave labour. In Ontario, the Mississauga First Nation is currently suing both the province and Brookfield over the environmental impacts of four dams owned by the company. In Maine, conservationist groups launched a similar suit. And in Colombia, a blockbuster 2023 report by more than fifty NGOs accused the company of myriad human rights and environmental abuses. Carney has long presented himself as a champion of the environment and a citizen of the world. His career at Brookfield suggests he’s anything but. Then there’s the issue of how Brookfield actually makes money. The company is the very definition of a rent seeker, a term that refers to a market actor that reaps profit without engaging in productive activity. For one, Brookfield manages $271 billion (US) in real estate assets, including substantial residential holdings, making it a massive and highly profitable corporate landlord and developer at a time when Canada, and most of the world, is in the midst of a housing crisis. Another one of Brookfield’s areas of operation is credit—particularly, distressed securities: the purchase of debt in the hopes of profiting from the debtor’s reorganization or liquidation. Trading in distressed securities, to put it plainly, means taking advantage of someone else’s misfortune. There’s a reason why entities that specialize in this field are called “vulture funds.” On that subject, perhaps worst of all is that Brookfield is one of the world’s largest private equity firms, making it the corporate equivalent of a house flipper. Indeed, the company makes nearly two-thirds of its revenue from private equity, an infamously vampiric sector that involves targeting vulnerable companies for takeover, stripping them for parts, eliminating as many jobs as possible, and selling off the pieces to the highest bidder. Private equity firms typically promise investors sky-high returns, but studies indicate that they don’t even outperform the stock market; the profits they earn mostly come from management fees. As the conservative American economist Oren Cass has written, “The industry fails on its own terms to deliver results for investors, and fails in its broader obligation to create value for society.” Carney likes to jibe, accurately, that his Conservative opponent Pierre Poilievre, as a career politician, has never worked a real job or had to make payroll. But it’s worth asking how many livelihoods Brookfield destroyed during Carney’s time at the company. “I do care about the economy,” Carney said on March 9, when he declared victory in the Liberal leadership race, “not because I am an economist, it’s because I care about people.” Are all of Brookfield’s sins his personal doing? Of course not. But his background in banking and finance is the core of his pitch to Canadian voters. He has invited examination of his life and work, and what emerges is a man devoted to the pursuit of wealth and the maximization of profit. (Although Canadian politicians are not legally required to disclose their finances, Carney is almost certainly a multimillionaire, thanks to his time at Brookfield and a thirteen-year stint at—of all places—Goldman Sachs, one of the ugliest faces of the financial crisis.) In the wake of Trump’s trade war and the world’s roiling economic uncertainty, it makes sense that Canadian voters are looking to a man like Carney for leadership. But just whose interests does a man like Carney have at heart?The post Mark Carney, Cutthroat Capitalist first appeared on The Walrus.