Inflation Is A Government Killer
The "51st State" is in for a reshaping.
Although the year is only just underway, it already evokes memories of the previous 12 months: political turmoil. A Canadian economy centred on record immigration, expanded government spending, and green ambitions seems set for a dramatic reshaping. 2025 has claimed its first victim in Justin Trudeau.
The conclusion of the Prime Minister’s nine-year administration largely reflects increasing public dissatisfaction with the rising cost of living and sluggish economic growth. As Canada approaches the potential changes associated with Donald Trump’s era, the Conservative Party finds itself in a strong position to assume power, which may result in a shift away from the progressive policies that characterised the most recent leadership.
This is the latest example of high inflation and interest rates driving economic angst and toppling governments, whether it be those from the left or the right. Inflation is a government killer, and it doesn’t pay any attention to the ideological bent of those in power.
Time For A New Leader
There are now several factors contributing to a favourable outlook for Canada.
First, the resolution of uncertainty. As the Liberal Party prepares to select Canada’s new leader, the nation is expected to encounter a national election in the near term. Current polling indicates that the Liberals are trailing the Conservatives by more than 20 points, as evidenced by various surveys. This situation places taxes, government expenditure, and environmental regulations at risk of significant alteration in the context of the world’s fourth-largest oil-producing country.
Second, the economic environment is supportive. Conservative Leader Pierre Poilievre’s key policy proposal focuses on alleviating the burden of Prime Minister Trudeau’s carbon tax, which many feel significantly impacts their financial well-being. He also recognises the importance of enhancing the production of raw materials, which can create jobs and support local communities. If the Conservatives come into power, we can expect a government that prioritises business interests, supports resource extraction, aims for a smaller government, seeks to reduce spending, and emphasises a more robust approach to addressing crime.
A few of those proposals echo that of the man coming into office just across the border. And in true Trump fashion, he didn’t hold back from commenting on the situation. “The United States can no longer suffer the massive Trade Deficits and Subsidies that Canada needs to stay afloat,” Trump said in a Truth Social post. “Justin Trudeau knew this, and resigned.”
Trump also threatened “economic force” to make Canada the “51st State,” along with comments about taking Greenland and Panama… and renaming the Gulf of Mexico to the Gulf of America. We can assure you we’re in for a crazy year.
Meme of the day: Art of the deal.
