Politics, Policy, and Future Impacts: A Year-End Guide for Canada

With Canada heading into a federal election next year, how will the political battle between Prime Minister Trudeau and Pierre Poilievre shape the country's future?  

Driven by his belief in his campaign skills, Trudeau aims to stay at the Liberal Party’s helm, confident he can prevail by contrasting his vision with Poilievre's, especially on issues like the environment, fairness, and global leadership. However, national, regional, and issue-based polls suggest a very challenging path. Trudeau will likely spend late 2024/early 2025 emphasizing lower inflation and expected interest rate cuts from the Bank of Canada as proof of economic recovery under the Liberal plan. Meanwhile, Poilievre’s opposition will frame the Liberals as out of touch after nine years in power as high prices persist.

How will Trudeau’s approaches to trade, climate policy, and economic recovery impact Canadian businesses, and how might a Poilievre-led government change the equation?

As President Trump returns to the White House, this could allow Trudeau to highlight his experience with potential CUSMA renegotiations and tariffs, as he did from 2016-2018. The Liberals may attempt to link the Conservatives to Trump-style rhetoric, but the election will likely focus on affordability. Adding to the uncertainty is the recent collapse of the Supply and Confidence Agreement between the New Democrats and Liberals, which could accelerate the election date from October 2025.

As political parties focus on inflation, affordability, and U.S. trade, what challenges and opportunities could emerge for Canadian businesses? Will economic resilience foster growth in energy, tech, and infrastructure, or will policy shifts add uncertainty?

As of now short-term uncertainty seems likely though the Government of Canada has been quick to provide assurances that they will attempt to keep things maximally business-as-usual.  

The Government has already spent much of the fall conducting consultations with regards to economic security, steel and aluminum tariffs and soliciting comments on opinions of the current CUSMA agreement ahead of its mandated review in 2026. There will be many opportunities for Canadian businesses in the next year to interact with the Government in ensuring their interests are protected by further negotiation.  

How could the new U.S. administration impact Canadian business policies and market confidence in the lead-up to the federal election?

The re-election of Donald Trump—only the second person after Grover Cleveland to serve non-consecutive terms—will likely have significant, immediate effects on Canada-U.S. trade relations. Trump’s proposed 10% import tariff on foreign goods could quickly impact Canadian markets.

The Canadian government will need to stay vigilant not only on tariffs but also as we approach the mandatory 2026 review of CUSMA. Former U.S. Trade Representative Robert Lighthizer, a possible incoming Secretary of the Treasury, hinted this spring at tougher terms, expressing dissatisfaction with the last negotiation outcome and urging Canada to address U.S. concerns around Mexican steel dumping to secure favourable treatment.