5 things to know about Canada's political crisis

Canadian Prime Minister Justin Trudeau’s resignation on Monday signals the extent of the unpopularity facing the country’s progressive Liberal Party, which has dominated its politics for decades, heading into elections later this year.

Trudeau’s decision to step down as the party’s leader and prime minister sets off a competitive race for the head of the party and to challenge the rising popularity of the opposition Conservatives in elections set to be held by Oct. 20 at the latest.

“I’m a fighter, every bone in my body has always told me to fight,” Trudeau said during a press conference announcing his resignation.

“This country deserves a real choice in the next election, and it has become clear to me that if I'm having to fight internal battles, I cannot be the best option in that election.”

Why did Trudeau resign?

The rising cost of living, increasing anti-immigrant sentiment and concerns over President-elect Trump’s economic threats to Canada have all contributed to growing disillusionment with Trudeau’s leadership.

Having lost key allies in the Liberal Party and facing a likely vote of no confidence by the opposition Conservatives and New Democratic Party, Trudeau called for the Canadian Parliament to be put into prorogue until March 24.

Trudeau’s decision essentially freezes the Parliament from carrying out any legislative work and gives the Liberals about three months to hold internal elections for the party’s next leader.

Trudeau said he intends to remain head of the party until a new leader is chosen.

The March 24 deadline is significant, running up against the deadline for the country’s annual budget and the opening of a new session of Parliament.

The Trump effect

Trump quickly started causing headaches for Trudeau after winning November’s election. The incoming president weeks later threatened a 25 percent tariff on Canadian exports to the U.S. unless Ottawa took action on illegal immigration and drug trafficking across the border.

Trump’s threats and Trudeau’s efforts to mollify the president-elect — taking a trip to president-elect’s Florida residence at Mar-a-Lago — fed into criticisms that the prime minister was weak.

For weeks, Trump has trolled Trudeau as Canada’s “governor” and said the country should be America’s 51st state. Trump, in response to Trudeau’s resignation, said Canada could avoid tariffs and that “taxes would go way down” if the country merged with the U.S.

Though Trump has suggested “many people” in Canada would love becoming part of the U.S., a poll from Dec. 10 found that only 13 percent of Canadians felt that way.

Who will take over?

Christopher Sands, director of the Wilson Center's Canada Institute, said he wouldn’t be surprised if Liberals moved quickly to hold elections and put in place a new prime minister.

This could demonstrate some stability ahead of Trump’s inauguration on Jan. 20 and give extra time for the Liberals to sell their new leaders to Canadians ahead of general elections.

“I suspect that they'll be panicked enough that they don't want nobody in charge when Trump signs all his first-day executive orders and just starts running fast,” Sands said.

Sands listed a number of contenders for the top post, but he said former Finance Minister Chrystia Freeland represents a clear break and change from Trudeau’s tenure.

“The fact that she resigned and triggered the crisis that led to Trudeau going is politically brilliant,” he said. “It makes a clear break between her and the prime minister so that she can be the candidate of change."

In mid-December, Freeland, also a deputy prime minister, resigned in protest to Trudeau’s spending plans, accusing him of failing to confront the threats of Trump’s tariffs and the impact they might have on the Canadian economy.

Other names Sands floated include Mark Carney, the former governor of the Bank of Canada and a Trudeau ally; Foreign Minister Mélanie Joly; and Industry Minister François-Philippe Champagne.

Sands also raised the possibility of Canadian Transport Minister Anita Anand, whom he called “a star in the Trudeau government,” saying she rose to prominence through her successful turn in acquiring vaccines and personal protective equipment during the COVID-19 pandemic. A former defense minister, she is credited with completing Canada’s purchase of F-35 fighter jets from the U.S.

Conservatives on the rise

The Conservative Party headed by Pierre Poilievre is well-positioned to take power when elections are held this year. They hold a commanding 24 point polling lead over the Liberals, according to recent data.

Poilievre has been described as a Trump-like figure, casting himself as a victim of the elite and the media, with a penchant for insults and provocations.

The Conservative platform includes eliminating a Liberal tax on carbon — a tax that is meant to encourage consumers and businesses to choose more environmentally friendly energy production.

“Ax the tax,” Poilievre said in a video message responding to Trudeau’s resignation.

Canada’s voters are also increasingly frustrated with the Liberals over the cost of living, immigration and crime.

“Trudeau was great at making sunny announcements, but terrible at delivering results,” Sands said.

Spending fights ahead

The Canadian government is expected to propose its new budget by April, a process that would allow opposition parties to trigger a vote of no confidence, collapse the government and head to elections.

The high cost of living, Trump’s tariff threats and criticism from the U.S. and others that Canada might not meet NATO’s 2 percent defense spending guidelines by 2032 are some of the headaches its next leaders will need to contend with.

The vast majority of Canadians — or 86 percent — are concerned about Trump’s threats, according to data from the nonprofit Angus Reid Institute in Canada. Half of Canadians say they prefer a hard-line approach, “that is, even if the tariffs are ultimately implemented, they do not feel Canada should let itself be bullied.”

Overall, Canadians are pessimistic about the state of the economy and nervous about the impact Trump’s incoming administration might have on it, according to Bloomberg/Nanos Research.

Findings for the final week of December showed a decrease in overall positivity from 49.96 in the previous week to 49.08, according to a report from the Canadian industry news site Wealth Professional. A reading below 50 indicates negative sentiment.

Topics

Trump's annexation talk extends a long U.S. tradition of political miscalculation about Canada

President-elect Donald Trump’s repeated assertions that he wants Canada to join the United States have become a staple of his presidential transition.
NBC News - 5h
Praised abroad, troubled at home: Canada’s political ‘prince’ bows out

Justin Trudeau’s popularity undermined by higher costs and rising anti-immigration sentiment
Financial Times - 22h
Here are the 5 things we're watching in the stock market in the week ahead

Nvidia's Jensen Huang will be at CES, and investors will get a fresh batch of labor market data.
CNBC - 2d
Johnson battles for the Speakership: 5 things to watch

Friday’s Speaker vote is shaping up to be a nailbiter as Rep. Mike Johnson (R-La.), the current House leader, is scrambling to keep the gavel for the next two years in the face of conservative ...
The Hill - 4d
5 things we know and still don't know about COVID, 5 years after it appeared

Five years after the virus that causes COVID emerged in China it still holds some mysteries
ABC News - 5d
5 things we know and still don't know about COVID, 5 years after it appeared

Five years after the virus that causes COVID emerged in China it still holds some mysteries
ABC News - 5d
Ridley Scott is a genius film-maker who can do anything – even start a political crisis in Malta

It wouldn’t be a press tour without the Gladiator II director saying something contentious, and now he’s managed to upset big cheeses on the Mediterranean island. For a while, it looked as if ...
The Guardian - 5d
5 things that will shape US politics in 2025

The fallout of last month’s high-stakes election and recent battles within Congress are offering early clues of what will set the tone for politics in 2025. Democrats are looking to regroup from a ...
The Hill - 6d