Canada election preview – A reversal of fortune for the Liberals
Since Liberal Party leader Mark Carney called for a snap election – scheduled for 28 April – the party has continued its remarkable recovery in the polls. It now looks like a very close race, with the Liberal Party on track to clinch the victory, albeit by a thin margin. A Liberal/New Democratic Party/Bloc Québécois coalition is not off the cards, says Gabriella Dickens, G7 Economist Macro Research at AXA IM.
Regardless of the outcome, policy implications are likely to be broadly the same with both major parties advocating for a moderately more accommodative fiscal stance. Both are looking to cut personal taxes and boost support for businesses most affected by US tariffs, while higher fiscal spending is warranted, given the tariffs and growing uncertainty.
Borrowing is therefore likely to rise. But Canada’s public finances are relatively well placed to support additional borrowing, given that the debt-to-GDP is low compared to the rest of the G7.
You can find more insights on the subject in the attached document.
2025 04 24 Canada election preview GD_en (2).pdf
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Dominique Frantzen
Jennifer Luca
Serge Vanbockryck
Arnaud Verwacht