The Top Line
After four months of high political drama and surprise developments, the results of Election 2025 offered more of the same.
Based on ballots counted at the time of publication of this note, the Liberal Party has won a minority government, with the following seat breakdown for the House of Commons:
- Liberal candidates are leading or elected in 168 seats (172 is the majority threshold), which would represent an increase of 8 seats from Election 2021.
- Conservative Party candidates are leading or elected in 144 seats; significantly up by 25 seats compared to Election 2021.
- Bloc Québécois candidates are leading or elected in 23 seats – a decrease of 9 from Election 2021.
- New Democratic Party (NDP) candidates are leading or elected in 7 seats, dramatically reduced from 25 seats they held after Election 2021.
The Conservatives will once again form the Official Opposition, while the NDP has been reduced to below official party status (the threshold for which is 12 seats), but could very well still play a significant role in the balance of power. Counting of some ballots is ongoing, with several ridings still too close to call, and those races will determine the amount of influence the NDP has in the next Parliament.
For several weeks now, it has been apparent the Liberals were likely to win. However, the end results paint a complex picture of high levels (40%+) of public support for both the Liberals and Conservatives, Liberal wins in unusual places (at the expense of both the Conservatives and the NDP), and substantial Conservative gains in Ontario and British Columbia. The Liberal majority was likely lost in Ontario, where the Party failed to hold or pick up several key ridings in the 905 region North of Toronto and in Southwestern Ontario, particularly the Hamilton-Niagara region.
In that context, both the Liberals and Conservatives have reasons to be simultaneously pleased and deeply disappointed with the election results.
For the Liberals, winning a fourth consecutive term in government – very rare in general in Canada – after public support levels just three months ago had the Party heading to a historic defeat – is unquestionably remarkable. That said, early in the election campaign, the Liberals put themselves in a position to win a majority, then ultimately fell short of that goal. The last two weeks of the Liberal campaign, when the party’s core messaging began to wander away from a strict focus on how Prime Minister Carney would deal with the Trump Administration, were lackluster, and Mr. Carney did not capture voters’ passion on any issue beyond Canada – U.S. relations.
For the Conservatives, securing their highest share of the national vote since the former Progressive Conservative Party got 43.02% in 1988 is a significant accomplishment. That development allowed the Conservatives to make significant gains in Ontario and build a stronger Official Opposition caucus. Ultimately though, losing a 21-point lead in popular support over a matter of weeks and seeing Party Leader Pierre Poilievre (likely, pending final ballot counts) lose his riding will be bitter pills to swallow. In the latter stages of the campaign, the Conservatives notably pivoted messaging away from a strident focus on the carbon tax and vilifying Liberal leadership; building in other themes around Mr. Poilievre’s personal life experience, law and order and substance abuse, and softening the campaign’s political rhetoric on topics like the CBC. A key takeaway is that the Conservatives should have sought ways to broaden their appeal, rather than simply secure their pre-campaign support levels, much sooner.
Ultimately, both the Liberals and Conservatives will now turn their attention to the business of government, while sorting through the implications of the Election 2025 results for medium-term political strategy and, ultimately, likely another Federal election within a few years.
Balance of Power and Political Implications
For stakeholders, the drama and uncertainty are not over. In the short-term, the key question to be resolved is which party/parties hold the balance of power in Parliament. That process will dictate the stability and longevity of the Liberal government. However, with the NDP about to enter a leadership race and with Pierre Poilievre’s loss in his riding of Carleton, the Liberal government will have some runway of relative stability in the House of Commons.
Stakeholders should expect Parliament to resume sitting fairly quickly (by end of May), and there is basically an imperative for that, given how long Parliament has been prorogued (with a period of extreme dysfunction preceding that in Fall 2024) and the fact that there hasn’t been a Budget 2025 or Main Estimates process.
Fundamentally, how Parliament and the Government function over the next 18 to 24 months, and what issues can be advanced as key priorities of the Liberal administration during that time, really depends on whether the Liberals win enough seats to be able to choose which opposition party to turn to for legislative support on a consistent basis.
With the NDP reduced to seven seats (below official party status), and Jagmeet Singh having lost his riding of Burnaby Central and resigned as Leader, the Party would appear to be at a low ebb in many ways. However, the NDP is still the most logical source of consistent support for a Liberal government that is within a few seats of a majority. As it currently stands, NDP support would be sufficient for the minority Liberal government to move legislation forward in the House and to survive any confidence votes that may arise. In that scenario, continued expansion of pharmacare and dental care are likely to be early priorities the NDP pushes with the Liberals. The Carney Liberals are already on record as supportive of the expansion of those two programs, so this should not be a difficult negotiation.
However, without official party status, the NDP will not be involved in Parliamentary committees, and government business could become stalled at that stage of the legislative process, as a result. Logistically, therefore, committees will continue to be dominated by the other opposition parties (Conservative and Bloc), which in the short term is not a problem for the Carney administration, but eventually will become an irritant for the Government and organizations who may come under scrutiny in those forums.
If, when all is said and done with ballot counting, only the Bloc Québécois can take the Liberals over the majority threshold, then a focus on decentralized government and Provincial authority, as well as the federal government’s approach to environmental issues will dominate the political agenda. The Bloc emphasized climate policy during the election campaign, including opposition to much oil and gas development, but it’s unclear how the Party would leverage those matters with the Carney government.
Meanwhile, as mentioned, Pierre Poilievre lost his riding of Carleton. But, on election night, he announced he will stay on as Conservative Party leader, which will almost certainly entail a member of his caucus resigning in order for a by-election process to get Mr. Poilievre into Parliament. Depending on how quickly the Conservatives identify a riding for that by-election, it will be the Fall or potentially early next year before Mr. Poilievre is seen again in the House of Commons. That will create significant challenges for his political profile and capacity to lead on holding the Carney administration to account.
What’s Next
Beyond the raw politics of Parliament and the balance of power, stakeholders should expect the following deadlines and issues to dominate the public policy agenda in the short-term:
- Prime Minister Carney will move quickly to appoint a new Cabinet. Only one member of the current Cabinet (Kamal Khera) lost her seat, so there is not much backfilling to do, and Mr. Carney will likely choose to keep the Cabinet small. However, Mr. Carney now has new Members of Parliament in Alberta, Saskatchewan and Manitoba who could offer greater regional representation, while star candidates from British Columbia (Gregor Robertson), Ontario (Tim Hodgson), and Québec (Carlos Leitao, Nathalie Provost) will hope for/expect prominent roles in the Carney administration. News reporting on background indicates Mr. Carney will have a regionally and gender-balanced Cabinet.
- Some form of Spring fiscal update or budget, as well as the passing of Main Estimates, is required for functionality of the Government, and politically will be a key opportunity for Prime Minister Carney to differentiate his administration from the Trudeau Government. Stakeholders should be prepared to move quickly to influence the early spending priorities, but understand the initial focus may be narrowly cast to Canada – United States relations and instituting Liberal campaign pledges to reduce the middle-class tax rate and eliminate inter-provincial trade barriers.
- On that note, the relationship between Prime Minister Carney and President Trump will loom large in the coming months, and addressing the Canada – U.S. trade war and cooling in bilateral relations will be an urgent priority of the new government. It is likely that Mr. Carney will push for a ‘grand bargain’ style resolution to those challenges, seeking to redefine the trading relationship (possibly with an update of the Canada – United States – Mexico Agreement), strengthen border controls, and increase Canada’s role in North American security.
- Canada’s Presidency of the G7 is now quickly bearing down on the new government, which must rapidly define its priorities for that major global summit, while preparing for what is likely to be an uncollaborative and disruptive American presence at the G7 Leaders meeting in Kananaskis in June.
Over the medium term, there are priority topics, like housing affordability, augmented defence spending, and slowing the growth of government spending, on which the Liberals and Conservatives (in their current iterations) largely agree, but that will be fulcrums for political debate and are likely to be major policy challenges for the Carney government. In particular, expect Prime Minister Carney to put a major focus on improving housing affordability in the short term, after that issue played a big role in almost entirely derailing the Trudeau administration in its final months.
What This Means to You
Parliament cannot be recalled until the Election 2025 results are certified, which could yet take some time, given the high likelihood for judicial recounts in some ridings. However, TSA expects the recall to occur by late May, for a short Parliamentary session focussed on a Throne Speech and either a full budget or smaller fiscal update.
In the short term, certain realities – including public election fatigue, the leadership uncertainty for the NDP and (to a lesser extent) Conservatives, and high public support for the Liberals – will create strong incentives for a stable Parliament. After 12 months, however, and particularly if Prime Minister Carney struggles politically, all bets will be off. The average minority government lasts 18 months, and the Conservatives will remain an empowered Official Opposition and the government-in-waiting. While the Liberal Party resurrection in Election 2025 was dramatic, it may prove to be a black swan event, if public sentiment for political change begins to build up once again. In that context, stakeholders should act quickly to engage and build connections with the Carney government, in order to make progress during that administration’s coming 12 months or so of maximal political capital. However, the Conservatives will remain a key stakeholder group; not to be ignored. It is likely that the newly-softened Conservative political approach will result in better stakeholder relations processes, and we expect a more welcoming (or at least less openly hostile) Conservative approach to stakeholders that aren’t firmly Conservative or right-wing.
