(Bloomberg) — Canada’s Liberal Party is projected to win a fourth consecutive election, giving a mandate to former central banker Mark Carney after a campaign in which he pledged to boost economic growth and stand up to US President Donald Trump in a trade war.
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The margin of victory appears to be narrow. Liberal candidates were leading or elected in 167 seats, ahead of the Conservative Party’s 145 seats, as of 3:15 a.m. Ottawa time on Tuesday morning.
Carney’s party had about 43% of the national vote, but may fall short of the 172 seats needed for a majority in the House of Commons, meaning the government would be forced to work with other parties to pass budgets and other legislation. Under the tightest scenarios, the Bloc Quebecois, which runs candidates only in French-speaking Quebec, might hold the balance of power.
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Addressing supporters in Ottawa in the early hours, Carney was ebullient, following the success of his remarkable swoop from the private sector straight to the apex of Canadian politics in about three and a half months.
But his speech also reflected the tricky reality that the novice politician may need to strike deals and compromise with rivals to deliver on the ambitious program he’s promised to Canadians.
“While many have chosen to place their trust in me, trust in the Liberal Party, millions of our fellow citizens preferred a different outcome,” he said, talking about “working constructively with all parties across parliament.” He made sure to note the importance of Quebec’s French language, the difficulty he faces in connecting with Canada’s conservative, oil-producing prairies, and congratulating the left-wing NDP’s “progressive values.”
Looming over all of the election was Trump. Carney told supporters he would focus on strengthening Canada’s economic independence, including making the nation into an “energy superpower.”
“We are over the shock of American betrayal,” Carney said. “But we should never forget the lessons.”
European leaders were quick to congratulate Carney, predicting closer ties with Canada as it looks for partners other than its southern neighbor. British Prime Minister Keir Starmer said he’ll look to “deepen our economic relationship,” while European Commission President Ursula von der Leyen said the bond between Europe and Canada was strong and “growing stronger”
Conservative inroads
The Conservatives, led by Pierre Poilievre, increased their overall vote share and made inroads in the suburbs around Toronto and other parts of Ontario, turning it into a closer election than pollsters had anticipated. The province is home to major industries such as auto manufacturing and steel that are in the crosshairs of Trump’s tariffs. The Liberals were on track to gain eight seats in Quebec, however, and continued their dominance in the four provinces in the Atlantic region.
Meanwhile, smaller parties got squeezed to the margins — especially the left-wing NDP, which looked set to drop to about seven seats from 24 as counting continued into the early hours.
The Canadian dollar initially rose after the major TV networks called a victory for the Liberals, then reversed as it became clearer the vote was close and there’s the potential for an unstable government. The loonie was trading at C$1.383 per US dollar.
While his margin of victory is thin, Carney’s win still represents a major turnaround for the Liberals, a party that has governed Canada for most of the past century but seemed on track for an electoral drubbing just four months ago. The ex-governor of the Bank of Canada and Bank of England became Liberal leader on March 9 and called an election only two weeks later. He leaned into his position as a prime minister who’d fight for Canada against an aggressive White House.
Carney, 60, tried to establish quickly that he was different from his predecessor, Justin Trudeau — more focused on the economy and on building new trade and security alliances, given the new foreign policy coming from Washington. His first steps were to cancel some of Trudeau’s less popular policies, such as a carbon tax on consumers, and to visit two European allies, French President Emmanuel Macron and UK Prime Minister Keir Starmer.
Once the election campaign began, he said repeatedly that Canadians needed to understand the country’s close relationship with the US has been ruptured by Trump’s actions, including the president’s claims that Canada should be the 51st state. In the final week of March, when Trump signed an order to implement auto tariffs, Carney said: “It’s clear that the United States is no longer a reliable partner.”
His calm, low-key manner in public and his experience as a policymaker and economist helped reassure voters that he was the best person to take on the challenge of guiding Canada in a new world order, and he won back many people who had become disillusioned with Trudeau. One poll near the end of the campaign showed Carney with about a 10-point advantage over Poilievre on the question of who would make the best prime minister.
But now Carney has to live up to his claims of being a consummate crisis manager, after steering two Group of Seven central banks through the 2008 financial crash and Brexit.
The ultimate test will be dealing with the unpredictable US president, who has said he would use “economic force” against Canada and has made specific threats against its automotive sector and other industries. Carney has said he wants to kick off “comprehensive negotiations about a new economic and security relationship” with the Trump administration.
That is certain to include a review of the US-Mexico-Canada Agreement, the regional trade accord that Trump signed in his first term and called “the best agreement we’ve ever made” but now finds deficient. For Canada, the economic stakes couldn’t be higher: About three-quarters of its exports go to the US, including the vast majority of its oil and gas exports.
Economic focus
That makes Canada one of the most exposed countries to a prolonged trade war, and for many of its most important products, it can’t easily or quickly find alternative markets.
Carney inherits an economy that may be close to recession and has been unable to resolve a long-running productivity crisis. Canada is already subject to punishing tariffs from the US, with more likely on the way.
“The focus is going to be more on the health of the economy, diversifying trade partnerships, strengthening Canada’s economy,” said Lori Turnbull, a professor in the faculty of management at Dalhousie University in Halifax, Nova Scotia. “So this will be significant in terms of a departure from the Trudeau government priorities.”
The prime minister proposed “nation-building” mega-projects such as new energy infrastructure — but as an environmentalist, he also wants to keep green protections in place, such as an industrial carbon tax. Carney has suggested he wants to double housing construction, partly through a government-backed program to finance prefabricated homes. But the government has just slashed immigration targets, shrinking the opportunities for skilled trades workers from abroad.
What’s more, the leader of conservative, oil-rich province Alberta has already issued a list of demands and threatened “an unprecedented national unity crisis” if they aren’t met.
The Liberal leader set out a plan during the campaign to run deeper deficits, partly to increase spending on infrastructure and trim income taxes.
Carney was the chair of Bloomberg Inc. until January, when he resigned that post to enter politics.
It’s a difficult moment for Poilievre, whose political momentum peaked too early. The 45-year-old politician dominated opinion polls by double-digit margins last year with promises to cut taxes and government spending, while building more homes and improving public safety.
Poilievre’s long-time rallying cries of ending the carbon tax and removing Trudeau were partly successful. Trudeau resigned and Carney ended the controversial consumer part of the tax within hours of taking office. But that forced Conservatives to establish a new message quickly, and they were slow to adjust to the new environment where Trump’s actions were a top concern among voters.
He also struggled to recruit high-profile candidates and to create the kind of alliances needed for a winning coalition. For example, his campaign was repeatedly criticized by allies of Doug Ford, who has won three straight majority governments in Ontario for his provincial party, the Progressive Conservatives. But Ford held a friendly photo-op with Carney in March.
Still, it’s the party’s best election result since 2011, showing that the Conservatives were able to grab voters’ attention with a platform that emphasized tax cuts, cutting regulation and boosting investment in oil and gas and other sectors. Those measures would generate faster economic growth and improve Canada’s position in dealing with Trump’s threats, Poilievre said.
But the Conservative campaign carried echoes of Trump’s methods, such as its promises to cut foreign aid, Poilievre’s combative relationship with traditional media, its targeting of diversity initiatives and even the party’s slogan “Canada First — For A Change.” Liberals used clips of Poilievre sounding like Trump, railing against “woke” culture and saying, “everything is broken.” At a time when Trump is reviled by many Canadians for his threats against the country’s sovereignty, that was damaging to Poilievre’s chances.
Voters “look for somebody that they trust to make their dreams a reality, and I believe Mr. Poilievre incarnated that, but they also look for somebody that they like,” said Dimitri Soudas, who was communications director to former Prime Minister Stephen Harper. “I believe he is trusted. I believe he is respected for his vision for the country. He chose to not be likable. And in my view, that was a mistake.”
–With assistance from Melissa Shin, Sarah McGregor and Derek Wallbank.
(Updates party standings beginning in the second paragraph, and adds comments from Mark Carney including on Trump and domestic agenda.)
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