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Let me break it down. 

Lisa Sygutek

Jan 29, 2025

I say this with conviction, based on the looming threats to our economy, the volatile political climate, and the precarious position Canada finds itself in on the global stage.

As we approach the scheduled federal election date of October 20, 2025, I can’t help but feel a growing sense of unease about Canada’s economic vulnerabilities. While the Canada Elections Act sets a fixed election date, I firmly believe that the political landscape will shift dramatically in the next few years and that the Liberal government, under a new leader, will either call a snap election shortly after taking office or seek to extend the election itself.

I say this with conviction, based on the looming threats to our economy, the volatile political climate, and the precarious position Canada finds itself in on the global stage. The signs are already there: the threat of 25% tariffs on Canadian goods from the United States, the deepening economic crisis exacerbated by interprovincial trade barriers, and the opposition to key infrastructure projects like pipelines that could offer Canada crucial access to new markets. These issues represent real, immediate threats to Canada’s prosperity and stability. A new Liberal leader, facing these challenges, will likely come to the conclusion that an election in 2025, or perhaps even a snap election before then, could be disastrous.

Let me break it down. 

With Donald Trump now back in the White House, Canada is once again at risk of facing the economic consequences of his trade policies. During Trump’s previous presidency, we saw tariffs imposed on Canadian steel, aluminum, and softwood lumber that disrupted entire sectors of our economy. If those tariffs return, particularly at a rate of 25%, the damage could be catastrophic for industries like automotive, forestry, and agriculture. Canada’s economy is deeply reliant on trade with the U.S., our largest trading partner by far. Any major disruption, especially tariffs on these key sectors, could send shockwaves through the Canadian economy.

The impact of these tariffs would go beyond immediate cost increases for Canadian businesses and consumers. It would also have severe consequences for employment, especially in regions with heavy manufacturing industries. Trump’s trade war with Canada already caused significant pain, but the next round could be far more destructive. If a Liberal leader is elected at a time when such tariffs are imposed, the political pressure to act quickly will be enormous. Facing a vulnerable economy, the new leader may feel they cannot afford the luxury of a full election cycle. A snap election, or even an extension of the current mandate, would allow the government to focus solely on managing this crisis, rather than being distracted by an election campaign.

The economic situation is made even worse by the interprovincial trade barriers that persist within Canada. Despite being a highly developed, resource-rich nation, Canada is plagued by trade restrictions between provinces that inflate the price of commodities and make goods unnecessarily expensive for consumers. The lack of harmonization between provincial regulations and taxes leads to inefficiencies, and as a result, Canadians end up paying higher prices for products that could otherwise be more affordable.

For example, the ability to move goods like energy, timber, and agricultural products more freely across provincial borders would lower costs and foster economic growth. But instead, we see barriers that prevent Canada from functioning as a truly integrated economic unit. This, in turn, places pressure on the federal government to address the issue, especially as rising inflation already strains the middle class. If the cost of living continues to climb, Canadians will start demanding answers, and the new Liberal leader will likely feel the weight of those expectations.

Perhaps one of the most glaring issues for Canada in the coming years is our inability to secure access to markets outside the United States. For decades, Canada’s energy sector has been tethered to U.S. markets, with limited options for expanding trade routes. The opposition to pipeline projects from NGOs, provincial governments, and environmental groups has prevented the country from developing the infrastructure needed to diversify its energy exports.

Without pipelines to carry oil and natural gas to new markets, particularly in Asia, Canada is stuck with an economy that is overly dependent on U.S. demand. And as we’ve seen, U.S. demand can be unpredictable. The inability to tap into new markets means that Canadian oil is often sold at a steep discount, costing us billions in lost revenue. At the same time, the growing opposition to pipelines only adds to the political tension within the country, particularly between provinces like Alberta and British Columbia. If these interprovincial tensions continue to escalate, the government will find it harder to move forward with energy infrastructure projects. For the new Liberal leader, this could mean a loss of credibility in energy-producing regions and an electoral disaster.

When you add all these factors together, Trump’s potential tariffs, the economic inefficiencies created by interprovincial trade barriers, and the stalled pipeline projects, it becomes clear that Canada is already in the midst of an economic crisis. It’s not just a matter of “what could happen” in the future. The foundations of our economy are increasingly fragile, and the current government’s ability to navigate this instability is being tested.

A new Liberal leader will likely face a harsh economic reality. Whether it’s because of tariff-induced job losses, a failing trade relationship with the U.S., or the escalating costs of living due to inflationary pressures, the leader will need to focus on economic recovery above all else. That’s why I believe they will either seek an extension of the 2025 election or call a snap election immediately after taking office.

If the new Liberal leader assesses the economic situation and determines that a snap election is in the best interest of their political survival, they will likely call one before 2025, while they still have the mandate to do so. This would allow them to try to win public support while the economy is still in a state of flux, rather than risking an election at the height of a crisis when voters might be particularly unforgiving.

Alternatively, the government may seek to extend the election date, particularly if the economic situation becomes dire. The logic behind such a delay would be clear: with the nation facing a multi-faceted crisis ranging from trade conflicts with the U.S. to internal political divisions over energy policy the government could argue that the timing of the election is inappropriate. They might make the case that a focused effort on economic recovery, rather than political campaigning, is what’s needed.

As I write this, I believe we are on the brink of a political reality where the 2025 election is either postponed or called prematurely. The threats to our economy, especially the possibility of renewed tariffs under a second Trump administration, are real and could devastate Canada’s economic stability. The interprovincial trade barriers and energy infrastructure gridlock only add to the growing sense that Canada is vulnerable in ways we’ve long ignored.

The political and economic landscape is shifting, and if the Liberal Party wants to maintain any semblance of control, they may find that a snap election or an extension is their only viable option. As unsettling as it may be for us in Alberta, I believe this will happen, and we need to prepare for the fallout that will follow. 

As much as I want a change in government, I feel it’s a long time away!

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