Tariffs and Leadership Change Propel Liberal Comeback

• The Liberal Party of Canada’s recent gains in public opinion polling are unprecedented, but is it durable?
• Liberal gains come at the expense of the NDP, Bloc Quebecois and “blue Liberals” who were in the Conservative column, as progressive voters recoil at the Trump administration’s actions – including tariffs.
• With US tariffs now in place, managing cost-of-living and the economy has become inseparable from who can best manage Donald Trump.

At the start of January, when Justin Trudeau announced his plan to resign as Prime Minister and Leader of the Liberal Party, the Liberals trailed the Conservatives in the polls by as much as 27 points.  The governing party was in a statistical tie with the NDP and stood to lose official opposition to the Bloc Québécois if an election were to be held, with the Conservatives galloping to a run-away majority victory.

A mere six weeks later, several polls show the margin of error separating the parties – a stunning reversal of fortune. With an election expected to be called in a matter of weeks, the Liberals are not only competitive – they are positioned as a contender to win a fourth consecutive mandate, given the efficiency of the Liberal vote.  What has led to this striking change in public opinion?

Trump, tariffs and the rise in Canadian patriotism.  The elephant in the room is Donald Trump’s repeated threat to make Canada the 51st state via economic coercion and the tariff crisis, which has now come to fruition after an initial reprieve. The threat to Canada’s economy – and sovereignty – has reverberated throughout the country with a renewed sense of patriotism, resulting in a public boycott of US goods and travel. How this manifests itself politically was demonstrated in Quebec, where the Liberal breakthrough was first noticed days after the tariff deadline with an erosion of Bloc support.  Francophone Quebecers – a coveted voting demographic – appeared to be turning to the Liberals as they recognized that the Bloc cannot protect them from Trump.

Chaos in the United States is having a disciplining effect on progressive voters. At the same time, Bloc, NDP and blue Liberal voters are increasingly horrified by what is occurring in the United States. While they may not have felt at home in Justin Trudeau’s Liberal Party, Trump is making them increasingly uncomfortable with the idea of a populist right wing party taking power nationally.

Ad spending tying Poilievre to MAGA-style politics. To capitalize on these fears, the Liberals amped up the contrast with Pierre Poilievre’s “Canada is broken” mantra, with new advertising that ties the Conservative leader’s past statements to Donald Trump. With a few short weeks left until the election, the Liberals, and the Carney leadership campaign (including proxy third parties) are now matching the combined Conservative ad spend on Facebook.[i] Since Trump’s election win, Poilievre has been actively distancing himself from MAGA.

Trudeau’s swan song.  While 18-months of declining polls expressed growing dissatisfaction with Prime Minister Trudeau’s leadership, now that he has resigned, he has had an uptick in favourability. His rousing Saturday night speech in advance of the tariff deadline brought back memories of his pandemic crisis management skills. Likewise, his “you can’t take our country – and you can’t take our game” tweet captured the public’s sentiment in the wake of Canada’s 4-Nations men’s hockey victory over the United States.

Neutralizing Conservative policy positions.  The Liberal Leadership race has enabled a policy reset where multiple contenders – notably Mark Carney and Chrystia Freeland – have jettisoned the unpopular consumer carbon price which was in the Conservatives’ crosshairs. At the same time, both Carney and Freeland have embraced Conservative positions on expanding oil and gas pipelines across Canada and eliminating the GST on new homes for first time buyer. Leadership contender Karina Gould, who has seized the progressive mantle in the race, has dubbed these policies as “Conservative lite.”

Mark Carney’s expected Liberal Leadership victory. While former Liberal voters had moved their preferences to other parties prior to Trudeau’s resignation, Mark Carney appears to be pulling them back into the big red tent. Polls specifying Mark Carney as the Liberal leader show an even stronger lead than the Trudeau-led party, though we suspect that many respondents are already baking Carney into their choice. While Carney has delivered a couple of unremarkable leadership debate performances, he appears to represent the combination of change, economic credibility and seasoned leadership that many voters are now craving. Carney has run a careful campaign featuring well attended events and a handful of platform-style announcements that have garnered significant attention. With a commanding fundraising haul, a bevy of MP and cabinet endorsements, and the current polling bounce, Liberal supporters are widely expected to elect Carney their new leader this weekend.

History rarely repeats itself, but it often rhymes.  Looking back to previous leadership elections for incumbent political parties, we see a familiar pattern. Paul Martin, Kim Campbell, John Turner and Pierre Trudeau all saw big bumps in polling when they replaced long serving Prime Ministers. Some of them saw that advantage quickly melt away while others rode the wave to electoral victory.

If Carney wins the Liberal leadership, he will likely be sworn in as Prime Minister shortly thereafter – the first time since John Turner that a non-MP has held the role. With momentum in the polls, he is expected to call an election before the House of Commons is scheduled to return on March 24 – with election day taking place sometime in April.  He may conduct a minor cabinet shuffle to put a new look on his cabinet heading into the election, even though ministers will have no time to settle into their files.

Pierre Poilievre’s Conservatives still have many natural advantages. Their campaign war chest, lead in candidate nominations and established social media ecosystem gives them an edge, as does Poilievre’s considerable political experience and debating skills. With a looming election that is shaping up to be a battle for the ages, the Conservatives are now attacking Carney at every turn to stall the recent public opinion trends.