In the biggest comeback in Canadian political history, Mark Carney’s Liberals won the 2025 election on Monday, April 28.
At this point, however, the Liberals are four seats shy of the 172 required for majority in the 343-seat House of Commons.
As of Tuesday morning, Carney’s party has won or is leading in 168 ridings. The Conservatives – who four months ago were ahead by over 20 points in most opinion polls – have 144 MPs elected or leading. But their leader Pierre Poilievre is not one of those. He lost his own Ottawa-area seat.
The 1.8 million Canadians who voted NDP in 2021 and in large measure defected to the Liberals this time must have complex, mixed feelings about the results.
They switched to the Liberals in order to rally around a leader capable of taking on the threat of an irrational and dangerous Fascist in the White House.
They decided the leader we need for this moment is the sober, rational, serious – and reassuring – former central banker, Mark Carney.
As a result of that massive defection, the New Democrats not only lost two thirds of their vote compared to last time, they were reduced to 7 seats from their previous 25.
The NDP is now short of the 12 seats needed for official party status in the House of Commons. Such status is no small matter. It includes money for staff and research, the right to ask questions in the House, and membership on Parliamentary committees.
Some are now suggesting that Carney might find it advantageous to offer the New Democrats official status, despite their poor showing. Even with reduced numbers the NDP is the most natural governing partner for the Liberals.
But such a decision is not up to Carney alone. It would require a legislative change to the Parliament of Canada act, which would require votes in the House of Commons and the Senate.
Liberals and Conservatives both went up in support
As Elections Canada was counting the votes on Monday night things looked dicey for a while.
It appeared at one stage that the Liberals would have only a tiny plurality over the Conservatives, and that they would need the Bloc Québécois’ votes to get them over the top on votes in the House.
But by Tuesday morning a good many Canadians were relieved to see that once more votes were counted the Liberals had a comfortable lead, if not an absolute majority.
Carney’s team now appears to have 24 more seats than the Conservatives. The Liberals have at least some representation in all provinces, including Saskatchewan, where they had been shut out for the two previous elections.
The Conservatives did better than most observers expected. They especially outperformed predictions in Ontario.
In Canada’s largest province NDP defections to the Liberals seem to have had a perverse effect. They helped the Conservatives, not the Liberals, win seats in Hamilton and southwestern Ontario.
Those results prove once again how the science of strategic voting is inexact, at the best of times.
As he awaits the final tally, Mark Carney now has much bigger challenges on his plate than winning an election.
He will have to draft a throne speech outlining the government’s plans for the new session of Parliament and, then, shortly after that, his finance minister will have to present a budget to the House.
Normally the government presents its budget, outlining tax and spending plans much earlier in the year. But 2025 has not been a normal year.
Indeed, Carney has suggested he might keep the House working through the summer, when it normally takes a break, to deal with all the pressing matters that will not wait until after Labour Day.
The new government will have to operate on two tracks.
The first track is managing, on a day-to-day and week-to-week basis, the fraught relationship with a U.S. president who says he wants to annex Canada.
The second, and of equal importance, is putting in place the building blocks of a Canadian economy that is significantly less integrated with that of the U.S. than it is now.
That task will be difficult in the extreme. It will mean reversing a consistent trend in federal economic, industrial and trade policy that goes back to the 1950s.
Earlier leaders warned against becoming too economically tied to the U.S.
Some previous Prime Ministers, such as the Liberal Lester Pearson who led the country from 1963 to 1968, mused about making Canada more economically self-sufficient and independent. Pearson rejected that idea. He concluded Canadians would not be willing to make the necessary sacrifices.
Walter Gordon, Pearson’s nationalist finance minister, did appoint a task force on foreign (meaning, mostly American) ownership, headed by the late Mel Watkins.
Watkins’ report warned that if we did not take decisive measures to remain economically independent of our giant neighbour we would become, de facto if not de jure, a colony of the U.S.
Among Watkins’ recommendations were a federally-owned economic development corporation. That led to the Canada Development Corporation, which both owned economic assets and managed some in the private sector.
The Pierre Trudeau Liberal government, which succeeded Pearson’s in 1968, implemented another of the task force’s recommendations.
It established the Foreign Investment Review Agency (FIRA) to assure that key sectors of the Canadian economy did not fall victim to takeovers by foreign interests.
The Brian Mulroney Conservatives, first elected in 1984, abolished both FIRA and the development corporation.
That same government also signed a free trade agreement (the FTA) with the U.S., a plan that was much debated during the 1988 election campaign.
The Liberals of that time, led by John Turner, were adamantly opposed to Mulroney’s trade plan. Turner called it the “fight of my life”.
Turner’s television commercials depicted an eraser wiping away the Canada-U.S. border. Turner’s Liberals told voters Mulroney’s plan would be the beginning of the end of Canada’s independence.
Subsequent Liberal leaders did not agree.
When Jean Chrétien became Prime Minister in 1993, he sought to expand the FTA to include Mexico. Thus was the North American Free Trade Agreement (NAFTA) born.
During Donald Trump’s first term, NAFTA morphed into the USMCA (U.S.-Mexico-Canada) agreement.
In retrospect, Turner’s concerns about the original Canada-U.S. deal seem prescient.
The result of the FTA and NAFTA, and of other pro-U.S. economic policies, has been to make the Canadian economy excessively dependent on the export of commodities such as oil and gas, while hobbling technological research and development and innovation in this country.
Public sector can be more than a catalyst
Mark Carney now talks about making public sector investments as a catalyst for private sector investment.
He should not forget the big role the public sector, all on its own, can play in a medium-sized economy such as Canada’s.
Historically the public sector, both provincial and federal, has been more important for Canada than for the U.S.
Going back more than a century, Canadian public sector activity, not just in providing service but in managing the productive economy, has made a significant contribution to this country’s prosperity.
Just consider the enormous importance of provincially owned electrical utilities, such Hydro Quebec or B.C. Hydro. A Conservative Ontario government established the first such public electrical utility in the very first years of the 20th century, more than a century ago.
Tragically for Canada, a world-wide economic theology of untrammeled free enterprise coupled with economic globalization, championed by the likes of Britain’s Margaret Thatcher and the U.S.’s Ronald Reagan, took hold in the 1980s. To our detriment, we are still in its thrall.
But Donald Trump, in his trademark incoherent and inconsistent way, has blown up that pure-free-market economic model. His own model includes imperialistic geographical expansion for the U.S. and the economic bullying and domination of former friends and allies, most notably this country.
We Canadians agree that we don’t want any part of Trump’s model. But we have yet to articulate a different one for ourselves.
Over to you Prime Minister Carney.
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