Post-election Canada: What comes next with the U.S.?
Canadians reelected a Liberal government in response to President Trump’s rhetoric. Ottawa’s relations with Washington, however, will focus on pragmatism.
In a nutshell
- Conservatives gained ground but lost key seats and leadership footing
- Trump’s rhetoric mobilized left-leaning voters, boosting the Liberals
- Domestic rifts threaten political stability and long-term policy coherence
- For comprehensive insights, tune into our AI-powered podcast here
In recent national elections, the Canadian Liberal Party was returned to power under Prime Minister Mark Carney, the former head of two G7 central banks who had not held office before this year. While much of the campaign fixated on the aggressive rhetoric of United States President Donald Trump, the aftermath of the vote will likely reveal more about the fractured state of the Canadian polity than the future of Canadian-American relations, which will likely be pragmatic, respecting the national interests of both countries.
Rollercoaster to election day
The Conservative Party, under the leadership of career politician Pierre Poilievre, went from having a commanding lead in the polls, when then Liberal Prime Minister Justin Trudeau announced his resignation, to losing the race for parliamentary control. This was the Conservatives’ fourth straight election loss to the Liberals.
That said, the Conservatives managed to pick up over two dozen seats, achieving their best results since the 1980s, and came within striking distance of winning the popular vote, finishing only 2.5 percentage points behind the Liberals. Several key swing seats were lost to the Liberals by narrow margins, and the Conservatives were competitive in some races where they had barely registered support in previous electoral campaigns.
Despite the overall electoral gains for the Conservatives, Mr. Poilievre himself lost his parliamentary seat. For the time being, he is likely to retain his leadership of the party and continue pressing forward with conservative policies on issues such as energy, immigration and the economy. Nevertheless, after being voted out of parliament and now in a weakened position, the Conservative leader may need to overhaul staffing and strategize for the future. Alternatively, if he fails to hold on to his position, a leadership fight will likely emerge with factions split between traditional center-right and populist members of parliament.
The Trump factor
There is no question that a distaste for President Trump’s comments − disparaging Mr. Trudeau, saying the U.S. needs nothing from Canada despite the country consistently being one of America’s leading trading partners, or calling for Canada to become a U.S. state − drew voters to the polls and consolidated support for the left and center-left around the Liberal Party. The Trump factor played its strongest role with voters who were looking for a reason not to vote for the Conservatives. Nevertheless, the Conservatives executed a poor election ground game, had no effective campaign to neuter the Trump factor and no effective counter to the left’s dominance of mass media.
While Prime Minister Carney, who previously was an investment banker and governor of the central banks of Canada and the United Kingdom, ran as a Canadian leader capable of standing up to President Trump, a continued stand-off between the two leaders is highly unlikely. The expectation is that the prime minister will be pragmatic on issues ranging from trade and the economy to national security and the border.
The White House has already signaled that it is interested in a win-win deal and still holds out hope that Ottawa will help partner in a revision of the U.S.-Mexico-Canada (USMCA) trade deal negotiated during the first Trump administration. That replaced the North American Free Trade Agreement (NAFTA), the continent’s first such deal, signed in 1992. Following the Canadian elections in late April, President Trump and Prime Minister Carney wasted little time and, in early May, held their first bilateral meeting in the Oval Office that was described by both sides as productive.
Meanwhile, the cross-border bonds between American and Canadian Conservatives have undoubtedly suffered a serious setback due to the Trump rhetoric earlier this year, despite their common views on energy, security, immigration, border security, lawfare and the importance of federalism. There is little chance that Canadian Conservatives can dominate at the polls by evolving into the mirror image of their American counterparts, and so they may not pursue such a path. Conservatives in both countries will struggle to leverage their commonalities until both sides figure out how to build better bridges.
The China card, the Europe card and the rest of the deck
Trump-hate has prompted calls to move Canada closer to other strategic partners, including China and the European Union. In practice, if new dimensions to these partnerships were suitable and practical, a Liberal Canadian government would have already swung in that direction. They have not.
The EU and Canada began trading under the Comprehensive Economic and Trade Agreement (CETA) in 2017, which ended nearly all preexisting tariffs between the two sides. Therefore, there is little more Canada and the European bloc can do in terms of new trade deals. Recent murmurs of Canada seeking entry into the EU is fanciful but not realistic.
As soon as President Trump and Prime Minister Carney start cutting deals, the divorce-from-America talk will subside, as will the U.S. president’s sharp barbs aimed north.
China’s influence in Canada has long been a source of friction and has already come under serious scrutiny. In the past, dealings with China and others have embroiled the government in scandal after scandal. Ottawa claims that Beijing meddles in Canadian affairs and seeks to manipulate elections. An aggressive policy toward Beijing will likely only lead to more controversy and not deliver much, an outcome the new government cannot afford.
As soon as President Trump and Prime Minister Carney start cutting deals, the divorce-from-America talk will subside, as will the U.S. president’s sharp barbs aimed north.
Oh Canada!
What the election demonstrated most was the deepening and likely irrevocable rifts between the right and left in Canada. Prime Minister Carney won despite years of disappointing rule by the Liberals. The recent vote was anything but a mandate. The Liberal Party may have reached its zenith with voters, and future developments will determine if the party’s current popularity is sustainable.
It would be reasonable to expect that a Canadian government run by many of the same people who were in past Liberal administrations will, in time, deliver the same level of popularity that only a few months ago had the Liberal Party polling 20 points behind the Conservatives. Meanwhile, the extreme left wing of the party and the remnants of the New Democratic Party (NDP) will prevent Prime Minister Carney from shifting back to the center in parliament.
Read more by James Jay Carafano
- The Quad eyeing Indo-Pacific security
- U.S. influence challenged in the Southern Cone
- NATO summit: Defense spending and U.S. tensions at play
The social democratic NDP (led by Jagmeet Singh, who also lost his seat in parliament), though battered at the polls, arguably retains enough seats to hold a balance of power and support the government’s parliamentary majority – support that may not sustain over time.
Meanwhile, the Quebec elections this fall could lead to a renewed push for a referendum on the province’s separation. There is also talk about a separatist vote in mostly conservative Alberta, though the likelihood of this movement growing is anything but certain. The government in Ottawa might prove unstable sooner rather than later, and it is likely that there will be another round of national elections within the next two years. How Canada achieves long-term political stability and a path to renewed growth is the thing to watch for.
Scenarios
Likely: Washington and Ottawa move pragmatically in key areas
In the near term, leaders in Washington and Ottawa are likely to find common ground on key security and economic concerns. In addition to border security, the most pressing issue for the U.S. is security and economic growth in the High North. This is an issue that Canadians recognize needs to be addressed as well.
Possible longer term: U.S. conservatism strains relations with Canada
The long-term challenge that will strain the relationship between Ottawa and Washington will be the internal political and economic stability in Canada, particularly if the U.S. shifts to a lasting center-right stance.
Unlikely: Deeper Chinese-Canada relations
Without question, one wild card will be Beijing’s efforts to strengthen its influence by taking advantage of the internal gaps in Canada. The U.S., however, likely has sufficient power and influence to limit those endeavors. Moreover, China has many other pressing issues to address at present, such as a cooling economy and new barriers to its exports. So, expect a half-hearted effort, at best, from Beijing.
Wild card: Center-right movements in the U.S., Canada and EU cooperate
Perhaps a more important wild card will be the capacity of Canadians, Americans and, for that matter, Europeans from the center-right to the populists to find a common agenda that broadly shifts Western politics toward more conservative governance and joint cooperation on key shared issues like immigration, security and energy.
Contact us today for tailored geopolitical insights and industry-specific advisory services
Sign up for our newsletter
Receive insights from our experts every week in your inbox.
