{"id":499712,"date":"2025-01-07T18:05:31","date_gmt":"2025-01-07T23:05:31","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/?p=499712"},"modified":"2025-01-07T18:05:31","modified_gmt":"2025-01-07T23:05:31","slug":"economic-opportunities-for-a-post-trudeau-canada","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/industry-news\/economic-opportunities-for-a-post-trudeau-canada\/","title":{"rendered":"Economic opportunities for a post-Trudeau Canada"},"content":{"rendered":"

Yesterday’s announcement that Prime Minister Justin Trudeau will resign his office<\/a> once the Liberal Party of Canada has elected a new leader presents short-term risk and long-term opportunities for Canadians and global investors looking to bet on our home and native land.<\/p>\n

\u201cIt’s just so unprecedented that we’re facing such a crisis with our nearest and dearest trading partner and yet don’t have any coherent strategy,\u201d said Lydia Miljan, a political science professor at the University of Windsor. Since his November election victory, president-elect Donald Trump has made a string of provocative statements about trade policy and Canadian sovereignty.<\/a><\/p>\n

The new leader is likely to face a quick no-confidence vote, said Miljan. Parliament is set to resume sitting on March 24.<\/p>\n

\u201cThere’s no appetite for [the opposition] to allow the Liberals to have any more control of government, and everything’s going to stop until after the next election,\u201d Miljan said.<\/p>\n

In addition to dropping bills, prorogation ends parliamentary committees’ work, Miljan said. \u201cEssentially we’re going to be without any new legislation until probably September.\u201d<\/p>\n

In the meantime, it will be up to provinces to pick up the slack and present their own case to the business community, Miljan said. For example, Alberta could focus on oil and gas, while Ontario focuses on manufacturing and hydropower.<\/p>\n

Amidst the political turmoil, the Canadian economy is in need of structural adjustments that go well beyond U.S. relations, said Jim Thorne, chief market strategist with Wellington-Altus Private Wealth in Toronto.<\/p>\n

For example, the U.S. began rebuilding its manufacturing base in recent years. But the Liberal government ignored the structural change, he said, and missed an opportunity to create a regionalized market. Canada needs to look at what the U.S. is building and how Canada can help fill gaps such as semiconductor testing and packaging.<\/p>\n

\u201cI think there’s a huge opportunity for Canada in the future to have an increase in standard of living once we figure out how we can coexist with the Americans,\u201d Thorne said.<\/p>\n

But that’s all on pause now. \u201cWhen there’s economic uncertainty, business leaders don’t do anything. There’s no spending [and] everybody’s in a holding pattern,\u201d Thorne said.<\/p>\n

Capital gains tax changes<\/strong><\/h2>\n

Despite an announcement from the Department of Finance on Tuesday that the Canada Revenue Agency will administer the proposed capital gains tax changes as planned<\/a>, Graham Priest, an investment advisor and portfolio manager with BlueShore Financial in North Vancouver, B.C., said the capital gains tax amendments are unlikely to pass.<\/p>\n

Canadians sold assets in anticipation of the announced tax changes, but won\u2019t be able to reverse those actions, he said. \u201cIt hasn\u2019t been a friendly environment for people to be putting capital at risk.”<\/p>\n

Francis Gingras Roy, a Manulife Wealth financial advisor in Dorval, Que., said he fielded calls from anxious clients who didn\u2019t know if they made the right move by disposing of assets prior to June 25, 2024. \u201cThere’s a loss of confidence in the government \u2026 because of all the confusion.\u201d<\/p>\n

Be patient<\/strong><\/h2>\n

If the polls are correct and we do see a shift in leadership to the Conservative Party of Canada, that could provide a meaningful boost to domestic markets, said Philip Petursson, chief investment strategist at IG Private Wealth Management. The Conservatives are expected to develop the resources sector, which could lead to favourable outcomes for Canadian publicly traded companies.<\/p>\n

The incoming Trump administration, if combined with Conservative leadership here at home, will be a boon for oil and gas, Miljan said. Alberta has already started making a strong business case for developing Canadian fossil fuels instead of relying on political hotspots like the Middle East and Russia.<\/p>\n

But any change in policy will take time to come into effect, Miljan said. Any new government will need time to transition.<\/p>\n

For those willing to wait, the TSX looks attractive right now, Petursson said. \u201cYou might have to wait a little bit to see how the policy unfolds over the course of the next couple of years, but I think they will be rewarded for their patience.\u201d<\/p>\n

Petursson said he doesn’t expect an election to be called until October. “There’s no desire by the Liberals or the NDP to try and rush an election at this point,” he said.<\/p>\n

Although the political landscape worries investors, people need to stick to their long-term financial plan, maintain proper investment allocations and not make major financial decisions because of short-term political changes, Priest said.<\/p>\n

There\u2019s always a lot of noise associated with top-level government leadership changes, Roy said. But he’s encouraging clients to take it all in stride. \u201cIt didn\u2019t change anything for us because we have this long-term plan, and we\u2019re prepared for that,\u201d he said. \u201cNever try to guess what’s going to happen next because more often than not you’re wrong.\u201d<\/p>\n

With files from Kevin Press.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Investors in Canada could benefit from a change in government<\/p>\n","protected":false},"author":185342,"featured_media":419938,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2318,2312],"tags":[],"yst_prominent_words":[6145,55807,18767,18649,14275,12796,11577,10630,10627,6729,6,5430,2219,2170,2116,1693,1384],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/499712"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/185342"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=499712"}],"version-history":[{"count":5,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/499712\/revisions"}],"predecessor-version":[{"id":499766,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/499712\/revisions\/499766"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/419938"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=499712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=499712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=499712"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=499712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}