The Top Line
Mark Carney, the former Governor of the Bank of Canada and the Bank of England, decidedly won the Liberal leadership election last night, with more than 85% of the votes cast and a strong majority of votes in every riding across Canada. Mr. Carney will be sworn-in as Prime Minister this week. His comprehensive Liberal leadership victory signifies a new chapter for the Party, which, drawing on substantially rebounded public support, is expected to trigger a federal election within the next couple of weeks. With the Conservative Party also still polling well and the persistent threat of tariffs by the United States (U.S.) on Canada, that election is shaping up to be competitive and hotly-contested.
What Comes Next
This morning, Mr. Carney will meet with Prime Minister Trudeau to formally agree on a date for the transfer of power. When that transfer occurs later this week, Mr. Carney will be sworn-in by the Governor General, and is also expected to appoint a new Cabinet.
Given the many signs that Mr. Carney wants to go to the polls quickly, we expect few significant changes to be made to the current Cabinet. Both Chrystia Freeland (who resigned from Cabinet in December over disagreements with Prime Minister Trudeau) and Karina Gould (who left Cabinet to contest the Liberal Party leadership) are expected to get new Ministerial roles.
Mr. Carney is also expected to meet soon with the provincial Premiers to discuss the tariff dispute with the U.S. and seek consensus on removing inter-provincial trade barriers.
Stakeholders should expect the elimination of the consumer-facing portion of the Federal carbon tax (including the planned April 1 increase) and cancelation of the capital gains tax changes announced in Budget 2024 to be early priorities of the Carney government. During his leadership victory speech last night, Mr. Carney re-iterated both of those policy pledges.
We believe Mr. Carney is preparing to call a Federal election on either March 16 or March 23, meaning Parliament will not return from prorogation on March 24.
Current Polling
Most recent federal polls indicate a significant shift in Canadians’ voting preferences. The Liberal Party, even prior to the new leadership of Mark Carney, saw a surge of support in the last month or so, substantially closing the long-standing gap with the Conservative Party, while support for both the NDP and Bloc Québecois has declined over the same period of time. While the Conservative-Liberal popular support gap has narrowed, most polls still show the Conservatives leading to some degree. Polling on specific issues indicates that President Trump and Canada – U.S. relations have become top concerns for Canadian voters, which is probably driving some of the change in opinion about the Liberals (along with the resignation of Prime Minister Trudeau).
The Liberals are likely to trigger an election based on how dramatically the polls have tightened, and a perception that they may have momentum to gain more public support.
According to poll aggregator 338Canada, the Conservatives are currently at 39% of public support, while the Liberals have risen to 33%. That is a dramatic change from just three months ago, when polls were consistently showing a 20-25 percentage point gap between the Conservatives and Liberals.
Overall, the rapid change in Liberal leadership combined with the current uncertainty in Canada – U.S. relations and the economy are making the political landscape volatile.
Preparation for an Election
With Mark Carney now at the helm, the Liberal Party must focus on a few key areas to be successful in the coming election campaign.
Firstly, the Party must consolidate support around Mr. Carney, which should not be difficult, given his resounding victory. Early comments suggest that Chrystia Freeland and Karina Gould support Mr. Carney and will be candidates in the next election.
Secondly, the Liberals must develop a campaign strategy, highlighting Mr. Carney’s strengths and differentiating him from Justin Trudeau. The Prime Minister’s profound unpopularity in late 2024 and early 2025 was a significant factor in the decline in support for the Liberal Party, and Mr. Carney will need to distance himself from the previous government without alienating Liberal supporters. That process will include emphasizing his economic expertise and his plans to address Canada’s financial challenges, such as affordability and the national debt and deficit.
Meanwhile, Pierre Poilievre and the Conservative Party must now focus for a competitive election, rather than a cruise to power. In the correct expectation that Mr. Carney would win the Liberal leadership, the Conservatives have already been highlighting the differences between their policies and Mr. Carney’s approach. That messaging has emphasized the Conservative commitment to fiscal responsibility and economic growth. The Conservatives have already leveraged their fundraising advantage to run attack ads about Mark Carney, largely focusing on his past actions and decisions as a financial markets executive and advisor to Prime Minister Trudeau. Those attack ads are part of a broader Conservative strategy to undermine Mr. Carney’s credibility and present him as a politically untested elitist with no experience in public office.
The Policy Landscape
We can say with certainty that the Canada – U.S. trade relationship will be a central issue in the coming election campaign, which has not been the case since the 1988 election. The likely national debate over who is best-placed to govern in the Trump 2.0 era will make it difficult for the NDP, Bloc Québecois, and Green Party to break through to voters, as Canadians look set to choose between Pierre Poilievre’s Conservatives and Mark Carney’s Liberals. While the current Canada – U.S. trade dispute has so far galvanized Canadians and brought disparate political views together in support of opposing tariffs, Mr. Carney and Mr. Poilievre will now aim to differentiate themselves on that issue, and claim the mantle of the person voters view as best able to deal with that challenge.
As such, the contrasting economic visions of the Liberals and Conservatives will be a central theme in the election. Each party Leader will want to show that they are best able to defend Canada’s interests against the Trump administration, while also having a plan to ensure Canada can grow its economy under potentially long-term trade threats.
On that front, Mark Carney will present himself to voters as a tested leader and cite his experience during the 2009 financial crisis, while with the Bank of Canada, and during Brexit, as Governor of the Bank of England, as proof that he is a good crisis manager. He will portray himself as a CEO-type leader, calm under pressure, who can solve big, global problems.
To-date, Pierre Poilievre has shown himself to be a very strong retail politician. During the campaign, he will cite his experience in government, use his oratory skills to connect with voters, and try to show that a Carney administration is an extension of Justin Trudeau. Mr. Poilievre will also argue that only the Conservative Party can deliver fiscal responsibility and economic growth, and that Canadians cannot trust the Liberals on those issues. Finally, he will also try to tie Mr. Carney to the consumer carbon tax and portray him as more focused on climate change than protecting Canadian jobs and the economy – a continuation of the issue and messaging that was working so well for the Conservatives just months ago.
It is too early to say which Leader’s argument will resonate more with voters, but Canada will have a consequential election this spring, and the outcome is still in doubt.
Impact on Advocacy
An election with an uncertain outcome and vast differences in the governing visions of the two parties likely to win that election makes advocacy planning difficult. As such, stakeholders should use the campaign period to plan for both Liberal and Conservative governments, and to build relationships with key political players in both parties. TSA will closely follow the campaign and provide regular updates on what it means for our clients and the advocacy landscape. Please reach out to us should you have any questions.
