Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
What Canada’s main parties are running on in upcoming election
Canada’s 45th general election is less than two weeks away, and the nation faces a fraught political climate fueled by President Donald Trump’s tariffs and annexation threats towards the country. The election's outcome could have far-reaching impacts on Canada’s future and position in a fragmenting world. In an exclusive interview, GZERO’s Tasha Kheiriddin sits down with Eurasia Group‘s senior advisor John Baird and Vice Chairman Gerald Butts to unpack what’s at stake in Canada’s election, including key political players and the strategies behind their campaigns.
Butts, former principal secretary to Prime Minister Justin Trudeau and a key Liberal strategist, says Carney is seeking a public mandate after taking over during Canada’s longest-running minority Parliament. Baird counters that Carney aims to ride early popularity and break from the Trudeau legacy.
Despite clear ideological divides, both Butts and Baird agree on one point: Canada needs a strong majority government. Baird warns that, “when you have such a small number of Members of Parliament, it’s like the tail wagging the dog,” expressing concern over the instability of minority rule. Butts echoes the sentiment, stating the country would be “far better served by a strong government of either political stripe.”
With Canadians heading to the polls, the world will be watching closely. The 2025 Canada election could determine not just the nation's economic path but its place on the global stage.
Watch full interview: Canadians head to the polls — and into the Trump vortex
Special interview: Canadians head to the polls — and into the Trump vortex
With just over a week until the Canadian election, GZERO’s Tasha Kheiriddin sat down with two senior advisors at Eurasia Group to get their take: Vice Chairman Gerald Butts, who is a former advisor to Liberal Prime Minister Justin Trudeau, and John Baird, former Cabinet minister under Conservative Prime Minister Stephen Harper.
Here’s what they had to say:
Why is Canada in an election campaign? “The prime minister needed a mandate from the people, not just his party,” said Butts, referring to newly minted PM Mark Carney, who took over from Trudeau in March.
Baird was more blunt: “Carney wanted to separate himself from the NDP–Trudeau era.” Which he seems to be doing: Under his watch the Liberals have soared nearly 20 points in the polls and are currentlypredicted to form a government.
Who are the main players? Carney, the former governor of the Bank of Canada and the Bank of England, presents “a safe, fiscally responsible concept” in Butts’ view. His main rival, populist Conservative leader Pierre Poilievre, brings “a fresh approach” according to Baird, who served with Poilievre in Parliament. He sees Poilievre as “best able to speak to US President Donald Trump and his administration.”
What’s really on the ballot? Themain issue is who can most effectively deal with Trump, whose tariffs and musings about making Canada the “51st state” have enraged Canadians. So far, voters givetop marks to Carney on that question. But whichever party wins, Butts and Baird agree that the next PM faces a hostile White House. “We’re starting from scratch,” warned Butts, citing the breakdown in what used to be one of the world’s closest bilateral relationships.
Minority or majority? Both men think that a minority government would be a bad outcome. “You don’t want to be checking in with a party leader with 8% in the polls before talking to the president of the United States,” said Butts, referring to Canada’s smaller parties, the NDP and Bloc Québécois. “It’s the tail wagging the dog,” added Baird.
Advice to the next PM for dealing with Trump? “Don’t get ‘Zelenskied’ — and be prepared,” they agreed. And to the victor go the spoils, even if that victor will take over at one of the most fraught moments in Canada’s history.
“The worst day in government,” Baird quipped, “is still better than the best day in opposition.”
Watch the full interview above.
Map of the US-Canada border.
The Captain Canuck effect: How a new nationalism is helping Canada
But that special relationship is now being tested by Donald Trump’s tariffs and his unprecedented threats to annex Canada by “economic force.”
As a result, nationalism is surging in Canada. And Canadians aren’t just booing the “Star Spangled Banner” at hockey matches, they’re avoiding US products, canceling travel plans, and ditching retirement homes. Even the 1970s comic-book character Captain Canuck is back!
Could this pushback, combined with Americans’ fears about the political climate at home, lead to new opportunities for Canada?
Canadians are already buying fewer American products. Instead, they are buying Canadian where possible. Sales of made-in-Canada goods were up 10% last month at Canadian grocers, and some local businesses in the country reported an overall sales jump of as much as 35%.
Meanwhile, US retailers are complaining about falling revenue from Canada, which buys about $350 billion a year in consumer products from American companies.
Canadians are canceling US travel plans. So far this year, the average number of travelers entering the US from Canada by car has dropped by nearly 15% — from 92,983 per day to 79,407 — compared to last year. In February, cross-border return car trips from Canada into the US fell 23%. In March, the Globe and Mail reported on some American tour operators reporting an 85% decline in bookings, and summer flight bookings to the US are down over 70%.
That sharp drop could hit the US tourism sector hard – Canadian visits translate to roughly $20 billion a year – and it could cost the American economy over $4 billion this year alone. According to travel lobbying groups, Canadian tourism supports 140,000 US jobs.
Even some snowbirds — the 1 million or so Canadian retirees who spend the winter in warmer locations south of the border – are looking for new perches: Rebookings have declined for next year, and some regular visitors are even selling their US homes.
But the drop in US visits is not only about patriotism. There are also growing concerns about the safety of crossing the border as the US expands its use of existing powers to search travelers’ devices and detain people on suspicion of links to illegal activity.
Jamie Liew, a law professor at the University of Ottawa and a migration expert, says the US was always allowed to screen at the border, but the practice has now broadened.
“Before, the US was doing this by targeting certain racialized communities ... What’s different is that it’s now being applied in broad strokes and to a greater number of people no matter who you are.” This, she notes, makes the risk and concern “serious.”
Brain gain for Canada? Since Trump’s return to the White House, American interest in applying for Canadian citizenship has grown, based on increased traffic to websites that provide this information.
Some Canadian provinces and institutions hope to take advantage of these trends as they seek to reverse the long-maligned north-to-south “brain drain.”
And they may have a willing audience: American researchers and public intellectuals, concerned by the political environment or the Trump administration’s cuts in research funding, are looking to leave.
In a recent poll by Nature magazine, for example, 75% of the 1,608 science researchers surveyed said they would consider leaving the US in response to Trump disrupting the science community. One recruiter noted a 63% jump in immigration inquiries from US physicians since he returned to the Oval Office.
There have already been a few notable defections. In late March, Jason Stanley, a Yale University professor and fascism scholar who has sharply criticized the Trump administration, made headlines when he announced he was leaving the US to join the University of Toronto.
Asked by NPRabout his decision, Stanley highlighted the administration’s moves to shutter DEI initiatives and to cut funding for universities over perceptions of antisemitism:
“I have Black Jewish children, and the attacks on DEI are attacks on Black people. … And they’re creating mass popular anger against Jewish people by … setting us up and saying we’re the excuse for taking down democracy. Personally, I’m not going to risk my kids’ safety for a political point.”
Meanwhile, Jen Gunter, a renowned Canadian gynecologistborn in Winnipeg, is returning to Canada after decades in the US, citing “rank misogyny” and the political climate.
Some Canadian institutions are rolling out the red carpet. The University Health Network in Toronto wants to attract at least 100 young scientists from the US. Still, there are questions about whether the Canadian government is adequately funding the sciences: Last year fewer than 1 in 5 scientists were approved for Canadian federal research funding.
Hold your horses, Americans. Canada has begun to retreat from its pro-immigration stance amid a housing crisis.
“I don’t think a mass migration is possible,” says Liew. “It’s only possible for people who might have status in Canada already, such as temporary permanent residence, citizenship, or dual citizenship, for example.”
And while Canada may stand to gain from American migrants, Liew wonders about the costs of those moves, for both countries.
“We have a lot of different expertise and diverse skills within our own borders,” she says. “Why is it that those experts can’t stay in the United States to maybe resist or provide some expertise within their own communities, to educate people about what is actually happening in their government?”
Line graphs comparing inflation to wages in the US and Canada.
Graphic Truth: Canada is winning the real wage war
But north of the border, it’s been a different story in the last few years, as Canadian wages have started to outpace inflation — helped, in part, by Ottawa’s decision to reestablish a federal minimum wage and index it to price growth. That hourly wage currently stands at $17.75. The US federal minimum wage, meanwhile, has been stuck at $7.25 per hour since 2009, though some states have set wages higher than that.
With Canada’s unemployment at 6.7%, the country’s labor market is far from perfect, but the recent real-wage growth there is bound to make some of its southern neighbors envious. These charts take a look at the recent relationship between nominal wages and inflation in both the US and Canada.
A ''Buy Canadian Instead'' sign is displayed on top of bottles, hanging above another sign that reads "American Whiskey," at a B.C. Liquor Store in Vancouver, British Columbia, Canada.
Canadians take aim at US businesses
Even before Trump’s tariff announcement on Wednesday, Canadian consumers were engaged in a grassroots trade war aimed at hurting American companies.
The “Buy Canadian” movement — which emerged out of Canadian anger at Donald Trump’s trade provocations and annexation threats — is hitting a growing number of American consumer firms. Canadian governments have pulled American liquor, beer, and wine from the shelves, and Canadian consumers have been scorning US products, with retailers delivering the bad news to suppliers. Half of the businesses making efforts to highlight Canadian-made goods reported last month that they had already seen a 50% increase in demand for Canadian products.
The trade tensions have also hit American tourism operators as Canadian snowbirds shift to other sunny destinations, reducing cross-border bookings by 70% this spring and summer. Canadians represent the largest group of international visitors to the United States, so a continued decline could hit US businesses hard.
Canadians made about 20.2 million visits to the U.S. in 2024. A 10% reduction could cost $2 billion and 14,000 jobs, according to a US trade group. There is no reason to think this will end anytime soon. Canadians are increasingly concerned about how they will be treated, and the Trump administration doesn’t seem to mind.
“Canadians will no longer have to worry about the inconveniences of international travel when they become American citizens as residents of our cherished 51st state,” White House spokeswoman Anna Kelly told the Wall Street Journal.
Canadians will be hoping that pressure on US businesses will eventually make the White House change its tune.
U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., U.S., April 2, 2025.
Trump slaps tariffs on the world
During a speech in the White House Rose Garden on Wednesday, Donald Trump announced a 10% across-the-board tariff on US imports, with higher rates for countries that have a larger trade surplus with the United States – to the tune of 20% for the EU, 54% for China, and 46% for Vietnam, to name a few of the hardest-hit. Trump also confirmed that he’s imposing 25% levies on foreign-made cars and parts.
There are some exceptions: Neither Canada nor Mexico were singled out for “reciprocal” tariffs. While they are subject to automobile and steel tariffs, products compliant with the USMCA agreement – around 38% of imports from Canada and 50% from Mexico – will not be subject to any tariffs.
How are countries responding? The 10% tariffs will take effect on April 5, followed by the extra “reciprocal” duties on April 9. This timeline gives countries a chance to retaliate, and many have vowed to do so by imposing equally high tariffs on US imports. The EU said on Thursday that it would impose countermeasures if negotiations with the White House don’t go anywhere. China echoed the Europeans’ approach, threatening countermeasures if the US doesn’t pull back. Other countries were more muted, though: India said it would be “measured” in response, while Australia won’t counter at all.
The Trump administration is betting that some may choose to negotiate, either by lowering their own tariffs or increasing investments in the US. “My advice to every country right now is, do not retaliate,” warned Treasury Secretary Scott Bessent on Fox News. “If you retaliate, there will be escalation. If you don’t, this is the high watermark.”
Financial markets react. S&P and NASDAQ futures declined by 3.5% and 4.5%, respectively. Meanwhile, New York copper futures are experiencing the sharpest drop, plunging as much as 4%, while crude oil fell by over 3%.
Promises made, promises kept. From the blue-collar workers scattered throughout the Rose Garden crowd to the Teamsters union shoutout, the goal of the tariffs was clear: Trump wants to reshore manufacturing to the US. He also hopes that the revenue collected from tariffs will pay for the tax cuts making their way through Congress.
Trump is making a political gamble that the short-term pain from tariffs — price inflation and possibly even a recession — will be offset by economic benefits from tax cuts, deregulation, and expanded manufacturing. He’s betting that these benefits will arrive before the 2026 midterm elections. If he’s wrong, his party is likely to pay a heavy price at the ballot box.Volkswagen export cars are seen at the port of Emden, Germany, beside a VW plant.
Trump hits global auto sector hard with new tariffs
On Wednesday, ahead of what Donald Trump is calling “Liberation Day,” when the administration plans to unveil a series of “reciprocal” tariffs, the president signed an executive order levying 25% tariffs on automobiles and auto parts made outside the United States. The tariffs will come into effect on April 2.
The new tariffs will be applied on top of existing duties on materials such as steel. For Canada and Mexico, which are party to a free trade deal with the US and whose auto manufacturing industries are intimately connected to their American partners, the tariff will only be applied to the non-US content of a vehicle or its parts. Economist Jim Stanfordpoints out, however, that this means every consumer car and truck in the US will be tariffed since no vehicle is uniquely and entirely made in America.
Trump says his goal is to permanently shift auto manufacturing to the US. But countries affected by the tariffs are pushing back. After the announcement, Canada, the European Union, Japan, China, the United Kingdom, and Germany decried the move. Japan says it’s “putting all options on the table” in response, and the German economy minister is promising “a firm response” from the EU.
In Canada, Prime Minister Mark Carney, who is on the campaign trail, called the tariffs a “direct attack” and said the country will defend its workers and industry, which accounts for over 600,000 direct and indirect domestic jobs. Carney canceled a Thursday campaign event to return to Ottawa to convene a meeting of his Cabinet Committee on Canada-US Relations. Earlier in the day, he promised that a reelected Liberal government would create a CA$2 billion fund to protect workers in the industry and to boost domestic manufacturing capacity, creating a “made-in-Canada” supply chain as the future of the continental auto industry remains in doubt.The economic waves of Trump 2.0: Insights from The Economist's Zanny Minton Beddoes
Listen: On the GZERO World Podcast with Ian Bremmer, we ask The Economist's editor-in-chief Zanny Minton Beddoes: Did Wall Street get President Trump wrong?
Candidate Trump promised to lower taxes and drastically reduce government regulation. This message resonated as much with Wall Street as it did with Main Street. After surviving, if not thriving, under President Trump's first term in office, the business community no longer feared Trump's unpredictability. They overlooked his fixation on tariffs and his promises of mass deportations.
However, the first months of Trump 2.0 have been a time of economic warfare and market volatility. President Trump slapped tariffs on America's largest trading partners and closest allies and began to make good on a promise to deport millions of illegal immigrants. So where is this all heading, and what does it mean for the rest of the world?
- Trump ignites trade war. Will there be a legal response? ›
- Trade war may push Canada closer to its threatening ally ›
- The Graphic Truth: Is the US-China trade war over? ›
- Trade war update: Canada and EU hit back at Trump ›
- Graphic Truth: Who Wins From A US-China Trade War? ›
- Larry Summers: Trump's trade war the "worst self-inflicted wound since WWII" - GZERO Media ›