Trudeau Steps Down: Now What

Critical Questions by Christopher Hernandez-Roy

Published January 7, 2025

Like his father before him, following a "walk in the snow," Canadian prime minister Justin Trudeau announced on January 6 that he would resign as prime minister and party leader once the Liberal Party of Canada organizes a leadership race. He convinced Governor General Mary Simon to prorogue (suspend) parliament until March 24 to allow his party time to choose a new leader. This was couched under the guise of parliament needing a reset and a new start to navigate the complex times ahead both nationally and internationally, given, in Trudeau's words, that it had been paralyzed by obstruction and filibustering. He added that stepping down would reduce the temperature and polarization at a time when Canadians needed to be united. Left unsaid as part of his reasoning for resigning, but clearly on the mind of the prime minister and of all Canadians, is the imperative to choose a leader who can effectively defend the country's interests once President-elect Donald Trump returns to the White House on January 20.

Q1: What does Trudeau's resignation mean?

A1: Trudeau did not immediately resign. He said he would step down once the Liberal Party held a vigorous and competitive leadership race and that he had asked the party president to initiate the process. The timing will be tight, and organizers and aspirants will need to move with alacrity. The party constitution says that candidates must submit a written nomination at least 90 days before the day of the leadership vote. Unless the party finds a lawful and democratic way to shortcut the process, this will fall after the reconvening of parliament on March 24, when motions of no-confidence will almost certainly be brought by any of the opposition parties, all of which have pledged to bring down the government. That will trigger an election with a campaign that must last at least 37 days but not more than 51. The liberal leadership race will take place against these deadlines, and there will be precious little time for a new leader to introduce him or herself and their platform to the nation during the campaign. The short timeline would also be a challenge for considering leadership candidates who are not members of parliament, such as Mark Carney, former governor of the Bank of Canada and Bank of England, who is considering running to replace Trudeau as standard-bearer of the Liberal Party.

During his press conference announcing his resignation, Prime Minister Trudeau side-stepped a question regarding whether candidates to replace him, including cabinet members, would step aside from the government to focus their energies on the leadership race. He said the government would continue to singularly focus on governing the country. This presents a serious risk as several of the other contenders for leader, including minister of foreign affairs, Melanie Joly; minister of finance and intergovernmental affairs, Dominic LeBlanc; minister of innovation, science and industry, François-Philippe Champagne; and Anita Anand, transport minister, all have essential roles to play in managing the challenges to Canada coming from the Trump administrationmost immediately, finding a way to convince the president-elect not to impose the 25 percent tariffs he has pledged to slap on Canada during his first day in office. The timing of the prime minister's resignation and the electoral calendar means until the spring thaws, Canada will have an unpopular, lame-duck government, with ministers distracted by the campaign trail and rendered ineffective by staff heading for the exits looking for their next job.

Q2: What will the next election bring?

A2: The short answer, to borrow from U.S. politics, is the liberals will receive a "thumping" or a "shellacking." The polls in early January show a 98 percent probability that the Conservatives will form the next government and a majority one at that. This will be the first election to use a new 343-seat electoral map based on the 2021 Canadian census, which may favor the Conservatives. The same polling suggests the Conservatives will win between 206 and 244 seats to the liberal's 29-57. Margins of error are insignificant when the Euclidean distance between the poles of voter opinion is that wide.

Furthermore, there is a reasonable chance the Bloc Québécois, would win more seats than the liberals, making the Bloc, a party dedicated to the break-up of Canada, the official opposition. This could happen at the same time as a resurgence of support in Quebec for separatism following two failed referendums to leave Canada in 1980 and 1995. The Parti Québécois is far ahead in provincial polls and has promised to hold a third referendum by 2030 if they form the next government. Quebec is the most "anti-Pierre Poilievre" in Canada. One commentator has suggested that a Conservative government at the federal level, coupled with a Trump administration south of the border, could drive home the idea that Quebec is better off alone.

Regardless, the next federal election will take place a year and a half before the next Quebec provincial one, and the liberals, aside from their deep unpopularity, have to contend with the fact that 14 percent of their caucus (or 22 seats) will not run again, losing valuable experienced members of parliament. They will face obstacles recruiting viable candidates given their unpopularity, and this may push their seats toward the lower end of the polls, opening a chance for the Bloc. However, depending on who is chosen, the next liberal leader could move the needle in the polls.

The Conservative's strength in terms of the number of seats they might win does not mean Canadians have suddenly become more conservative; rather, it is a reflection of the country's first-past-the-post electoral system. In each riding, citizens vote for their preferred candidate, and the one who garners the most votes wins. This happens in each federal riding, so in effect, there will be 343 elections, each with wildly different results. With three, and in some cases four major parties, a candidate may win with as little as 29 percent of the vote. The day before New Year's Eve, the conservatives were polling at a very high 45 percent of public opinion, with Trudeau at an all-time low, yet it still means that a majority of Canadians do not favor them.

While the allocation of seats in parliament may change to some degree between now and the date of the election, unless Pierre Poilievre and the Conservatives make major mistakes on the campaign trail, they are almost certainly going to form the next majority government.

Q3: What could a Poilievre Cabinet look like?

A3: Pierre Poilievre recently pledged if elected to "cut bureaucracy, cut the consultants, cut foreign aid, cut back on corporate welfare to large corporations." He wants "to cause a massive resource boom in our country" and generate enough electricity to power data centers. He also pledged "the biggest crackdown on crime in Canadian history" and said that he would cut the number of people arriving in Canada. His agenda seems to be one that would resonate with members of the Trump administration and potentially augur well for U.S.-Canada cooperation. But who would be his lieutenants entrusted to carry out his vision?

In a December interview, Poilievre listed some of the likely members of his team, which included former party leader and house speaker, Andrew Scheer; deputy leader Melissa Lantsman, who worked for several cabinet members in the Stephen Harper government; shadow infrastructure minister Leslyn Lewis, who is both a lawyer and has a PhD in international law; and Jamil Jivani, a former radio host who counts U.S. vice president-elect JD Vance as a friend from their time together at Yale Law School.

Other rising stars in the party include Shuvaloy "Shuv" Majumdar, who has extensive experience in foreign affairs, including as senior policy director to former foreign affairs minister John Baird and through working for the International Republican Institute; Adam Chambers, who served as executive assistant for former finance minister Jim Flaherty during the 2008 global recession and as an assistant vice president at one of Canada's largest life insurance companies; and Raquel Dansho, who is the shadow minister for public safety and vice-chair of the House of Commons Standing Committee for Public Safety and National Security. She has also served in other shadow minister roles (including immigration) which are important to the U.S.-Canada relationship.

Should the Conservative Party of Canada win the range of seats that current polling predicts -between 200 and 240 seats-it would mean the party would have considerably more members of parliament to choose from to fill cabinet positions.

Q4: What does this mean for U.S.-Canada relations?

A4: Trudeau exiting the scene could offer an opportunity for a reset away from the difficult conditions that President-elect Trump's "jokes" about Trudeau and, by extension, all of Canada created. The president-elect's statements, including one the day Trudeau resigned, may have been "funny" once, but his repetitive messaging constitutes disparagement humor, which simultaneously conveys a hostile and demeaning message, but couched with a second signal that is supposed to convey he is only kidding. Trying to negotiate away the threatened 25 percent tariffs would be tough even for the most skilled dealmaker. Presumably, a more ideologically aligned Poilievre government would not find itself the butt of those jokes, and serious and respectful negotiations could occur. In any case, negotiations should be from a position of safeguarding the interests of Canadians in addition to those of their largest trading partner. Win-wins on many issues are possible.

This should be the absolute priority for any incoming Canadian government, given that the tariff threat, according to an analysis by the Canadian Chamber of Commerce, would shave 2.6 percent (or CAD $78 billion-roughly USD $53 billion) off the Canadian economy, costing Canadians approximately CAD $1,900 per person annually. The impact would not be borne by Canadians alone; the same analysis suggests U.S. GDP would shrink by 1.6 percent (or USD $467 billion), costing Americans approximately USD $1,300 per person annually.

The tariff threats are tied to stopping migration and fentanyl flows from Canada to the United States. U.S. authorities have said in the recent past that they have little indication that Canadian-made fentanyl is being smuggled to the United States in significant quantities. A conversation the author had with a senior Canadian law enforcement official in December 2024 revealed that while large fentanyl labs have popped up in Canada, including one that was raided by the Royal Canadian Mounted Police in November 2024, the product they make is for domestic consumption and for export to Asia, Europe, and Oceania rather than for shipment south. Regardless, Canadian authorities need to redouble their efforts against fentanyl labs and traffickers for the sake of reducing overdose deaths of Canadians in addition to their neighbors to the south. The same goes for illegal migration from Canada into the United States, which, while only about 9 percent of the size of the migration flow from the U.S. southern border, should be addressed with urgency. Canada can build on the encouraging news from U.S. Customs and Border Protection, which reported a 50 percent decrease in encounters at the northern border from June to September 2024, despite overall numbers of crossings having jumped significantly between 2022 and 2023.

Progress in reducing fentanyl and migrant flows may or may not head off the tariff threat. Beyond those issues, President-elect Trump has complained about Canadian defense spending, the trade imbalance between the two countries, and irritants around the United States-Mexico-Canada Agreement (USMCA).

Despite a government statement to boost Canadian defense spending and reach the 2 percent NATO target by 2032, Canada continues to be seen as a freeloader. Six months ago, Poilievre said he would not commit to meeting the two percent threshold. More recently, he said his party would adopt the Trudeau government's military budget increases, which, from the U.S. perspective, is still too little and too late. This is no longer an issue where Canada can drag its feet, even if it were to consider only its own sovereignty, especially in the Arctic. Canada's ability to meaningfully contribute to major allied operations is in doubt for the foreseeable future, according to two Canadian experts. The new Canadian Arctic Foreign Policy recognizes that adversaries are trying to achieve influence through cyber activities, foreign interference, and economic coercion. For Canada's sake, rebuilding Canada's military must be a priority for the next government.

In an indirect pitch to President-elect Trump to head off the trade imbalance question, Poilievre recently said he would double down on Canada's oil and gas sector and increase shipments to the United States, which he described as below-market price, also proposing to revive the Keystone XL pipeline. These energy supplies constitute a significant part of Canada's trade surplus, and despite this, Poilievre hopes to convince the incoming Trump administration that they can be a win-win for both countries.

A similar story could play out in deepening cooperation in the critical minerals sector. Canada is poised to solve part of the critical mineral supply chain vulnerabilities faced by the U.S. defense industrial base if efforts and incentives are pursued with greater vigor on both sides of the border. Indeed, the two countries recognized the importance of collaborating when they finalized the Canada-U.S. Joint Action Plan on Critical Minerals Collaboration during the first Trump administration. Creating a defense fund in Canada, similar to the U.S. Defense Production Act Title III, to support the exploration, feasibility, mining, processing, and refining of essential defense minerals that are otherwise cornered by China, would support Canadian businesses and employment, improve U.S.-Canada relations, and also help reduce the gap toward the 2 percent NATO target.

Finally, Canada cannot wait to have a new government in place to continue USMCA negotiations with the incoming Trump administration, even if the president-elect will have little time for a lame-duck prime minister. Whether the threatened tariffs are implemented on day one or not, they will continuously hang over the USMCA review process, which is supposed to occur by July 2026. The new Canadian government will want to ensure that the review does not turn into a renegotiation, but that is likely inevitable. One analysis suggests the United States would probably want to expand new cooperation mechanisms for supply chain disruptions, anti-forced labor import provisions, and new measures to jointly block Chinese companies from the North American market (which Canada is already doing on Chinese EVs), as well as promote critical minerals development and investment protection, incentives for nearshoring, new border management practices, specialized rules of origin for vehicles, and expanded provisions on digital services. Some of these issues, like labor practices and critical minerals, dovetail with Canada's interests. In other areas, Canada should work to solve irritants, such as its proposed digital services tax, which the Canadian Chamber of Commerce has proposed changing before the first payment deadline in June 2025. While he remains in office, Trudeau would be wise to include prominent conservatives who have the confidence of Pierre Poilievre in negotiations to demonstrate a united front and convince the U.S. administration that both countries are stronger when they work together before handing off to the new government.

Christopher Hernandez-Roy is the deputy director and senior fellow of the Americas Program at the Center for Strategic and International Studies in Washington, D.C.

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