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Canada will face significant existential challenges regardless of who wins the federal election: Stephen Nagy for Inside Policy

The stakes of this election extend beyond domestic considerations to Canada’s reliability and relevance among its international partners during a period of geopolitical realignment.

April 25, 2025
in Inside Policy, Foreign Policy, National Defence, Latest News, Economic Policy, North America, Stephen Nagy
Reading Time: 6 mins read
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Canada will face significant existential challenges regardless of who wins the federal election: Stephen Nagy for Inside Policy

Image via Canva.

By Stephen Nagy, April 25, 2025

As Canada approaches its April 28, 2025, federal election, the country finds itself at a critical juncture that will determine not only its domestic trajectory but its position within an increasingly complex global order. While nominally a multi-party contest, this election has effectively consolidated into a binary choice between Conservative leader Pierre Poilievre and the current unelected prime minister, Mark Carney of the Liberal Party. The fundamental question underlying this electoral contest extends beyond partisan preferences to address Canada’s continued relevance in international affairs and its capacity to address mounting domestic challenges.

Electoral dynamics in flux

The dramatic narrowing of polling margins over the past six months deserves careful examination. According to Abacus Data’s February 2025 polling, the Conservatives’ once-commanding 22-point lead has contracted to a statistical tie, with both major parties hovering around 34–36 per cent support. This remarkable reversal coincides with two significant developments: President Donald Trump’s January 2025 implementation of aluminum and steel tariffs affecting $25 billion in Canadian exports, and the emergence of Mark Carney as Liberal leader following former Prime Minister Justin Trudeau’s controversial prorogation of Parliament.

Trudeau’s departure came during a time of crisis for Canada. The prorogation effectively suspended Parliament’s capacity to respond institutionally to continental trade tensions associated with Trump’s America First agenda at the precise moment when unified national response was most essential.

Trudeau claimed he prorogued Parliament to end the paralysis in the House of Commons and reset the legislative agenda, but critics argued it was a cynical and politically motivated Hail Mary-style attempt to install a new Liberal leader and salvage the party’s chances in a looming federal election in 2025. Following a short leadership race, Carney won with an overwhelming 85.9 per cent of the vote.

This procedural decision reflects a pattern of institutional strain, and arguably, exploitation of national interests for political purposes, which has characterized Canadian governance in recent years under Liberal Party rule.

Mark Carney: Global credentials without democratic experience

The Liberal standard-bearer presents a sophisticated but untested political profile. Carney’s resume – Harvard and Oxford education, Goldman Sachs executive experience, governorship of both the Bank of Canada (2008–2013) and Bank of England (2013–2020), and UN Special Envoy on Climate Action and Finance – establishes him as a member of what political scientists Lasse Folke Henriksen and Leonard Seabrooke terms “the transnational policy elite” in his 2022 work on global governance networks.

Carney’s climate finance expertise manifested in his chairmanship of the Glasgow Financial Alliance for Net Zero, which mobilized over $130 trillion in financial assets toward decarbonization goals. While this work demonstrates undeniable global leadership, organizations like the OECD have questioned whether such initiatives privilege abstract sustainability metrics over immediate middle-class economic concerns.

Statistics Canada’s 2024 income distribution report reveals that while Canada’s GDP grew by 11.4 per cent between 2015–2024, median household income increased by only 3.7 per cent in real terms. This divergence between macroeconomic indicators and lived economic experience represents a vulnerability for Carney, who must convince voters that his technocratic expertise can translate to kitchen-table economic improvements.

Furthermore, Carney assumed the mantle of prime minister without first facing an election. His leadership resulted from approximately 140,000 Liberal Party members selecting him in a process that political scientist Tamara Small characterized as “democratically insufficient for determining national leadership.”

Pierre Poilievre: Institutional knowledge without external experience

The Conservative leader presents a sharply contrasting profile. Having entered Parliament at age 25 in 2004, Poilievre’s two decades in political life include service as Minister of Democratic Reform (2013–15) and extensive committee work focused on government operations and public accounts. This experience has equipped him with what granular understanding of governmental machinery rarely found in opposition leaders.

However, Poilievre’s policy prescriptions reflect theoretical understanding of market mechanics without the practical implementation experience that comes from managing complex organizations. This limitation raises questions about his capacity to execute the ambitious governmental reforms he advocates.

Poilievre has effectively diagnosed several structural challenges facing Canada. Statistics Canada’s 2024 productivity report shows Canadian labour productivity has declined by 0.3 per cent annually since 2016, while housing affordability has deteriorated with average home prices increasing 87 per cent over the past decade according to the Canadian Real Estate Association. Immigration levels reaching 500,000 annually by 2023 have strained infrastructure and housing markets.

Competing foreign policy visions

Carney’s approach to economic diplomacy emphasizes diversification beyond the American market, with particular focus on deepening ties with the European Union through the Comprehensive Economic and Trade Agreement (CETA). However,  Carney’s diversification strategy faces mathematical constraints, as even doubling EU trade would offset only a fraction of potential US market disruption. Moreover, his reluctance to address the findings of the National Security and Intelligence Committee of Parliament’s 2023 report on foreign interference operations has raised concerns about his approach to more challenging bilateral relationships.

Poilievre’s foreign policy emphasizes strengthened US relations and a more confrontational approach to authoritarian regimes, particularly China. However, Poilievre’s values-driven diplomacy risks isolating Canada from engagement with economically significant non-democratic states that represent essential regional partners. His promises of increased defence spending to reach NATO’s 2 per cent GDP target would represent a significant departure from historical Canadian practice.

The North American challenge and opportunity

Managing the US relationship remains Canada’s preeminent foreign policy challenge. According to Statistics Canada , 75.9 per cent of Canadian exports flow to the American market, representing approximately 20 per cent of Canadian GDP. The Brookings Institution’s recent analysis estimates that Trump’s initial tariff measures could reduce Canadian GDP by 1.2 per cent if maintained through 2025, with further escalation potentially doubling this impact.

Neither candidate has fully grappled with how Canada maintains policy autonomy while acknowledging the fundamental asymmetry of the continental relationship. This challenge transcends partisan affiliation and will require sophisticated diplomatic engagement regardless of electoral outcome.

The bumpy path forward

As Canadians prepare to vote, they face a choice between candidates with complementary strengths and weaknesses: Carney’s global sophistication but democratic inexperience versus Poilievre’s institutional knowledge but limited non-political background. This election occurs against a backdrop of declining international influence.

Canadians find themselves confronting a consequential electoral decision between two distinct approaches to governance. On one hand, Liberal PM Mark Carney represents probable policy continuity with the preceding Trudeau administration – a trajectory that, by multiple comparative metrics, has yielded concerning results for Canadian economic competitiveness, housing affordability, and diplomatic influence. While Carney’s technocratic expertise may offer marginal improvements to policy implementation, fundamental questions remain about whether this would meaningfully address structural challenges. Conversely, Conservative leader Pierre Poilievre presents a policy-literate alternative articulating substantive critiques of Canada’s current direction, yet his capacity to translate rhetorical opposition into effective governance remains unproven. His lengthy parliamentary career demonstrates institutional knowledge but provides limited evidence of executive competence or consensus-building ability. Ultimately, this election hinges not on traditional partisan divisions but on whether Canadian voters believe meaningful policy correction is necessary, and if so, whether Poilievre represents a credible vehicle for such change despite implementation uncertainties.

The stakes extend beyond domestic considerations to Canada’s reliability and relevance among its international partners during a period of geopolitical realignment. Domestically, if either party leader continues Canada’s current policy approach, Canada’s economy will continue to fall behind its OECD peers, Canadians will be less prosperous, and society will become more divided between different geographic areas, leading to calls for much more autonomy or worse, separation.

The same is true in the foreign policy space. Continued denial of foreign interference, generational underinvestment in defence, delusions about a substantial diversification from the US and the North American economy, and the inability to conceive a foreign policy that puts Canada and its national interests at the table and not on the menu, will inevitably lead to Canada not being able to deal with the changes in our international order. The return of power-politics and the consequential challenges we will face from authoritarian states will further complicate our ability to respond effectively.


Dr. Stephen Nagy is a professor of politics and international relations at the International Christian University, Tokyo. Concurrently, he is a senior fellow for the Macdonald-Laurier Institute and a visiting fellow with the Japan Institute for International Affairs (JIIA). He serves as the director of policy studies for the Yokosuka Council of Asia Pacific Studies (YCAPS), spearheading their Indo-Pacific Policy Dialogue series. He is currently working on middle-power approaches to great-power competition in the Indo-Pacific.


The author of this piece has worked independently and is solely responsible for the views presented here. The opinions are not necessarily those of the Macdonald-Laurier Institute, its directors or supporters. The Macdonald-Laurier Institute is non-partisan and neither endorses nor supports candidates or political parties. We encourage our senior fellows to comment on public policy issues, including during election campaigns, but the publication of such expert commentary should not be confused with the institute taking a position for or against any party or candidate.

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