Trudeau’s gone so why does everything still feel broken?

The Liberals swapped leaders, but not direction, and the country is paying for it

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New year, new prime minister—same failures. Mark Carney’s Ottawa looks just as weak and directionless as it did under Justin Trudeau, and Canadians are paying the price.

Despite the drama of 2025—Trudeau’s resignation, Carney’s rise to Liberal leader, an election fought on promises of competence, and Pierre Poilievre’s shock defeat—Canada has ended up right back where it started.

Poilievre is already headed back to the House after a resounding byelection win in Battle River–Crowfoot on Aug. 18, pulling nearly 80 per cent of the vote. But what’s changed? Carney’s shine has already worn off, and fewer Canadians than ever believe he can handle the country’s domestic or international challenges. Four months into office, the renewed Liberal government has left Canada weaker abroad and poorer at home.

The Carney honeymoon ended fast. Days after his victory, he posed alongside U.S. President Donald Trump, mimicking Trump’s signature “thumbs up.” Trump took credit for Carney’s win and revived his “51st state” rhetoric. Carney’s team scrambled to downplay the moment, but the damage was done. This was the man who promised to stand up to Trump, not stand beside him.

Worse, Canadians soon learned that Carney had quietly removed most tariffs on American goods during the campaign, a politically clever move that stripped Canada of any leverage. As a result, Trump’s administration steamrolled Ottawa with 50 per cent tariffs on Canadian steel, aluminum and copper, and 35 per cent on goods not covered by CUSMA.

While Canada floundered, global competitors moved in. The U.K., European Union, Japan, South Korea, Vietnam and the Philippines all inked new trade deals with Washington. Once seen as a preferred partner, Canada is now on the outside looking in.

Diplomatic humiliation followed. On the very day Poilievre won his byelection, Trump convened NATO allies to discuss a peace framework for Ukraine and Russia—Canada wasn’t invited. Once proud of our role as an honest broker and middle-power influencer, we’re now irrelevant.

Carney’s much-hyped economic expertise has also fallen flat. He appeared willing to govern without a federal budget—an act of arrogance or incompetence, take your pick. After backlash, he promised a fall budget, but there’s still no credible plan to rein in deficits or restore confidence. Even Air Canada workers ignored his calls to return to work.

A long-overdue defence spending pledge of $8 billion has been swallowed mainly by decarbonization programs, doing little for national security. Meanwhile, the government’s environmental agenda continues to punish the economy. Slashing the consumer carbon tax to zero was a headline grabber, but industrial carbon taxes and regulatory burdens continue to rise, choking off investment, productivity and competitiveness.

Western alienation is deepening. The Carney government’s shortcut for approving energy projects, fast-tracking anything “in the national interest,” politicizes resource development and creates uncertainty. Carney has even hinted that Indigenous groups may gain veto power, further muddying the investment landscape.

The economy is stagnant. Canada’s international stature is diminished. The West remains ignored. For many Canadians, Carney looks like nothing more than Trudeau 2.0.

Incredibly, we’re right back where we were when the year began. Trump is blocking our exports. The prime minister can’t stop him. And Pierre Poilievre is back in Parliament, sharpening his attacks.

The only real difference? The NDP doesn’t have a leader. But once it does, it will be eager to bring down the government and try to rebuild its own credibility. Political change is coming—but not just yet.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.