Canadian Prime Minister Justin Trudeau announced he would be resigning as leader of the federal Liberal Party. This comes after calls from other Liberal members for Trudeau to step down. These calls escalated last month when Canadian Finance Minister Chrystia Freeland resigned from her position, citing differences in how to move Canada forward.

• Trudeau has served as Canada’s Prime Minister over the past nine years. His approval rating has dipped over the past year. Current polls show the Conservatives in a comfortable lead should an election be called.
• He will remain Prime Minister until a new leader of the party is found. Parliament will be suspended until March as the Liberal Party finds its new leader. That individual will become the 24th Prime Minister of Canada, but will likely head straight into an election.
• The uncertainty comes at a time when the government will have to react to potential tariffs from the US. President-elect Donald Trump reinforced plans for widespread tariffs after a report surfaced that the tariffs would be cut down to only critical imports.
• Looking at the economy, S&P Global reported that business activity in Canada contracted in December for the first time since September. Services sector activity fell markedly, which offset gains in the manufacturing sector.

As we enter the new year, Canada’s economy and government sit on relatively shaky ground. There is plenty of uncertainty as potential tariffs could negatively impact trade and economic activity in Canada. Additionally, Canadians are likely headed to the polls sometime in 2025 to elect a new Prime Minister. Despite the current state of uncertainty, Canada’s economy and political environment have been stable over the long term, warranting some confidence that they will recover again.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.