In the lead-up to the stunning resignation of Chrystia Freeland as Canada’s minister of finance, the story provided by the mysterious sources not authorized to leak secrets to the media was that Freeland and Prime Minister Justin Trudeau had a disagreement over whether to distribute $250 cheques to every Canadian earning less than $150,000. It looks like the unauthorized source was speaking truth. In her letter of resignation, which reads like an attack on Trudeau, Freeland says the government needs to keep its “fiscal powder dry” and should be “eschewing costly political gimmicks.”

It’s a little late for Freeland to be standing up for sound fiscal policy. There has been no dry powder in Ottawa’s fiscal warehouse for the better part of a decade. Federal spending and debt both soared during her tenure as minister of finance, with little end in sight leading up to Monday’s fiscal statement. As economists at the Fraser Institute noted recently, reckless Trudeau government spending is on track to produce the five-highest years of per-person debt (inflation-adjusted) in Canadian history. As of 2024, Ottawa’s debt equals $51,467 per Canadian. Freeland cannot pass all those bucks on to Trudeau.

While vitally important, the fiscal side of federal economic and financial governance over the past few years is only part of the disruptive Freeland policy legacy. Arguably more important has been her trumpeted support for government-run industrial policy. The idea that government control over economic development is vital has been part of Freeland’s mission for some time, from the ideas floated in her 2012 book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, right up to last week’s announced plan to incentivize Canadian pension plans to invest $45 billion to develop data centres.

As Freeland put in in a 2022 speech, Canada needs “a government with a real muscular industrial policy” to take on the low growth and high inflation she said were created by the COVID-19 pandemic, Vladimir Putin’s invasion of Ukraine and an aggressive China.

Some called it “The Freeland Doctrine,” an economic screed that promoted aggressive tax-and-spend policies that she said Western democracies needed to adopt. “Liberal democracy worldwide has today declined back to 1989 levels, and autocracies have been making a comeback. Many, including China, the second most powerful country in the world, have grown both wealthier and more coercive.”

Long before she became finance minister, Freeland appeared as the intellectual guru to Trudeau. As Peter Foster noted on this page in a 2013 column, conversations between Trudeau and Freeland about her candidacy as a Liberal politician apparently took place while she was in Canada promoting Plutocrats.

The Liberal fixation on state-run industrial policy has been in evidence across the economy over the last 10 years, especially through the massive interventions in support of the green industrial revolution. Tens of billions of dollars have been poured into the automobile, minerals and other industries — along with carbon capture and other technologies — all in the name of reducing carbon emissions and saving the planet from a climate change meltdown supposedly due some time this century.

In this context, it would be unfortunate if the focus prompted by Freeland’s resignation were restricted to her fiscal record and her claims to be upholding sound spending and taxation. This would be doubly true if attention were to turn to Mark Carney as the alternative policy guru to the Trudeau government.

We know that Carney has been keen to assume the role of master of Canada’s economic future. In an interview with Liberal MP Nathaniel Erskine-Smith in October, he indicated he had the intellectual smarts to do the job better: “I know how financial institutions work. I know how markets work. And I know the good and bad of that. I’ve experienced it… So I understand how the world works. I’m trying to apply that to the benefit of Canada.”

Carney, widely rumoured — according to more sources not authorized to speak but speaking authoritatively anyway — to be joining the government, is one of Trudeau’s confidants and is more than ready to break into politics. “One of the things that has drawn me more into politics right now,” he told Erskine-Smith, “is that we have an opposition who’s leading in the polls, who doesn’t understand the economy, doesn’t understand where the world’s going, doesn’t understand what’s necessary to build this economy for Canadians, who thinks it’s a series of simplistic slogans.”

The target of that comment is obviously Conservative Leader Pierre Poilievre. But it could also apply to Freeland, and even Trudeau. The question is whether Carney, who shares many of Freeland’s ideas about the failure of markets and how capitalism is fundamentally flawed, is a real policy alternative.