TORONTO (Reuters) – Canada’s ruling Liberal Party, led by Prime Minister Justin Trudeau, is set to return to power and form a minority government yet again, news channels projected on Monday, after a tight election race.
Elections Canada showed the Liberals leading in 154 electoral districts, based on preliminary counting. The House of Commons holds 338 seats and a party needs to win 170 to hold a majority.
STORY:
MARKET REACTION: CAD/
LINK: https://enr.elections.ca/National.aspx?lang=e
COMMENTARY
MARTIN PELLETIER, SENIOR PORTFOLIO MANAGER, TRIVEST WEALTH COUNSEL
“The Conservatives and NDP were really focused on trying to address the escalating cost of living crisis going on in the country, especially in jurisdictions like Vancouver and Toronto, whereas Justin Trudeau was heavily focused on climate change initiatives. I thought that cost of living would resonate more with voters.”
“This is a non-event. We’re getting more of the same as what we had before. I don’t think markets are going to react either way,” adding that Trudeau’s plan to increase the tax on banks’ profit is “going to exacerbate the cost of living crisis, because banks operate within an oligopoly structure in this country and as a result have the ability to pass along said tax directly to the consumer.”
REBEKAH YOUNG, DIRECTOR, FISCAL & PROVINCIAL ECONOMICS, SCOTIABANK
“The outcome is as expected by and large … Markets might have been guarded around election uncertainty as to whether it would be a minority Conservative or minority Liberal with different implications for sectors on some major files including climate, for example.”
“I think we’ll probably see a refresh on the risk radar from a market perspective that we now have more certainty, more the same, stay the course policies under a Liberal minority government. But they’ll (market players) still start guarding against some more specific policy measures in the Liberal platform that may have sector specific implications and we’ll only know with a fiscal update expected most likely mid to late fall as to which policies will be prioritized first and how they’ll be executed.”
GERALD BAIER, ASSOCIATE PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF BRITISH COLUMBIA
“It’s a Groundhog Day election… Not a huge movement one way or the other.”
“You can make the critique that we need this election to reconfirm the ambivalence that Canadians had about Liberal government in 2019. It seems that ambivalence has kind of stayed, in the sense that there’s not overwhelming support to want to give them the majority that the prime minister wanted, and at the same time not enough of a movement toward any particular alternative.”
“We’ve seen minority governments at a provincial level in a few places… It seems to suggest exactly what people want, which is some degree of ambivalence. That might mean that they’re comfortable with the idea of the NDP or another party having some kind of kingmaker power. They’re not ready to have one party or another really have all the reins.”
PEDRO ANTUNES, CHIEF ECONOMIST, THE CONFERENCE BOARD OF CANADA
“I think the Liberal Party, the government up until now, has been very open to borrow from the future and make sure they are supporting the economy. In a way that’s a good thing. I think there are still some segments in the economy that need it and I think in the platform the Liberals have laid out, they do talk about support, for example, for the airline industry and aerospace and a few others.”
“I think targeted support would be sensible. Where I would worry is the broad based support measures that we’ve seen. The economy has come back, employment has come back and there’s an awful lot of savings and there is an awful lot of profits right now in the economy with these support programs.”
“I think it is time now to ease of the gas peddle and hopefully as the economy reopens there is enough wherewithal in there to see the economy getting fully back to where it should be.”
ADAM BUTTON, CHIEF CURRENCY ANALYST, FOREXLIVE
“The market isn’t surprised by (Justin) Trudeau’s electoral win. The polls in the last week or so showed a strong possibility that the Liberals holding on to power. That said, Canadian elections are more of a political event than a market mover in general, and this is no exception. The Canadian dollar is a bit stronger so far today but not significantly stronger.”
“I would expect to see the Canadian dollar flat to softer if Trudeau gets into majority territory, because it raises new risks… The market is very familiar with what a Liberal minority will look like at this point, but a majority government would raise risks around deficit cutting, (and a) change in tax policy or capital gains may be on the table if Trudeau can get into a relatively solid majority.”
JOHN DUFFY, FORMER ADVISER TO FEDERAL AND PROVINCIAL LIBERALS
“I think (the Liberals) are feeling vindicated… The prime minister has pulled together one of the most impressive runs of any liberal prime minister in power – three elections in a row is an amazing achievement, especially with this many parties, where it’s so volatile and in a pandemic, so they’re feeling pretty good about their achievement here.”
“A win’s a win, and time in office and power is when you get to make change.”
“Justin Trudeau has proved his political resilience with his re-election. The Liberals were in a very difficult position at the end of August, and there’s a lot of campaigns that would have buckled and a lot of leaders who would have buckled under that kind of pressure. Trudeau basically won three debates in a row and turned around the Liberal campaign. He has proven his resilience beyond a shadow of a doubt.”
WILL STEWART, NATIONAL LEAD, HILL+KNOWLTON STRATEGIES AND CONSERVATIVE COMMENTATOR
“I think it was to be expected. In the last couple weeks public opinion polls certainly turned in this direction. Justin Trudeau called his campaign to get a majority. I don’t think he’s going to get there, which then takes us right back to where we were sort of six weeks ago. Why did we have this election in the first place as we return to exactly the same, House of Commons we had when we left?”
“(The Conservatives) ran a fantastic campaign. Most pollsters would have said a month before this campaign started that Justin Trudeau was on his way to majority… (Leader Erin O’Toole) ran a great positive campaign filled with new ideas, new approaches to solve some of Canada’s difficulties.”
“Campaign results obviously are not what people wanted – or what Conservatives wanted anyway – but he ran a great campaign.”
KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CAMBRIDGE GLOBAL PAYMENTS
“This does look like a decisive win for the Liberals that essentially preserves the status quo and ensures that the fiscal spending plans that have supported the economy for the last year and half are likely to continue and continue to support growth.”
“The more supportive fiscal policy is, the more likely the Bank (of Canada) is able to move from tapering to rate hikes in the next year and a half, and certainly that is going to support the Canadian dollar.”
(Reporting by Fergal Smith, Moira Warburton, Nichola Saminather; Editing by Denny Thomas)
