(Bloomberg) -- Brookfield Asset Management Ltd.’s decision to move its head office to New York from Toronto is causing trouble for Mark Carney in his run for Canadian prime minister.
The asset manager’s relocation, unveiled last year when Carney was still its chair, has become a political flashpoint as he vies to replace Justin Trudeau as as Liberal Party leader. The rival Conservative Party is using it in attack ads against him, and an Ontario lawmaker on Wednesday accused Carney of being dishonest about his role in it.
Brookfield Asset announced in October that it had shifted its headquarters, part of a series of changes to make its shares more attractive to US investors and gain membership in equity indexes such as the S&P 500. Days later, Donald Trump was elected, and since then the US president has brandished the threat of using tariffs and “economic force” against Canada, which he has repeatedly said he thinks should be a US state.
Trump’s actions and his taunts about statehood have triggered a strong backlash in Canada — including boycotts by some consumers against US products — and caused its citizens to become more sensitive about news of companies moving to the US. So Brookfield’s decision has opened up Carney to criticism at a moment when polls show the Liberals are surging and have a shot at winning a general election this year if he’s their leader.
When asked again about Brookfield at a news conference on Tuesday night, Carney sought to downplay his role in the New York relocation.
“The formal decision of the board happened after I ceased to be on the board,” he told reporters. “I do not have a connection with Brookfield Asset Management.”
Conservatives pounced on that comment and pointed to the timeline. Brookfield announced the head office shift in a news release on Oct. 31, and Carney later signed a letter to shareholders, dated Dec. 1, that asked them to vote in favor of a corporate reorganization.
“Last night, Mark Carney lied to Canadians,” Michael Barrett, a Conservative member of Parliament from eastern Ontario, told reporters Wednesday.
“Donald Trump asked companies to move to the United States, asked them to take their jobs, take their investment dollars to the United States.”
Brookfield has said that Canadian operations were not impacted as a result of the head-office switch, and as a global investment firm it has long maintained a significant presence in both Toronto and New York, along with other financial centers, including London.
Other Canadian companies have also faced blowback for moving to the US. Montreal-based logistics firm TFI International Inc. was rebuked by a major shareholder last week after saying it would change its legal domicile to the US. TFI then reversed its decision.
An aide to Carney said the former central banker’s comments on Tuesday night were actually referring to the formal vote by Brookfield shareholders, which took place on Jan. 27, shortly after he resigned from all of his corporate roles to enter politics. Carney had also been the chair of Bloomberg Inc.
Conservative Leader Pierre Poilievre “is desperate to misrepresent Mark’s serious experience in business because he has no economic experience whatsoever,” said Audrey Champoux, a spokesperson for Carney. “Brookfield Asset Management remains one of the largest investors in Canada. It continues to list on the Toronto Stock Exchange and its parent company, Brookfield Corp., continues to be headquartered in Toronto.”
Carney appears be the front-runner in the Liberal leadership contest and the party is gaining in public opinion surveys. The Liberals have taken a small lead among decided voters for the first time in years, overturning a 26-point deficit from just six weeks ago, according to Ipsos poll published Tuesday. But the lead — 38% to the Conservatives’ 35% — is within the margin of error of 3.8 percentage points.
Liberal Party members will elect Trudeau’s successor on March 9.
Spokespeople for Brookfield did not reply to requests for comment.
--With assistance from Brian Platt.
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