Mark Carney elected PM in too-close-to-call result; Poilievre and Singh both lose seats

Canadians voted for Mark Carney to stay on as Prime Minister on Monday, granting his Liberal Party a  fourth consecutive mandate. At press time, the Liberals had won 155 ridings and were leading in another 13, leaving them four seats short of a majority government. The Conservatives won 133 and were leading in 11. Final results are expected Tuesday.

Conservative Leader Pierre Poilievre and NDP Leader Jagmeet Singh both lost their seats in what proved to be largely a two-party race. The Bloc Québécois won 21 ridings and were leading in two more.

“Humility underscores the importance of governing as a team in cabinet and in caucus and working constructively with all parties across Parliament,” said Carney. “Let’s put an end to the division and anger of the past. We are all Canadian and my government will work for and with everyone.”

Investor reaction was mixed — the Canadian dollar hit a high for 2025 of 72.4 cents US in overnight trading, following CBC News’ projection of a Liberal win. It fell to 72.1 cents US as a majority government call failed to materialize, and then rebounded to 72.2 cents US at press time.

“Mark Carney has achieved something remarkable — one of the biggest turnarounds in modern political history — but without a majority, he could struggle to put Canada’s economy on a more stable footing,” says Karl Schamotta, chief market strategist at Corpay Cross-Border Solutions in Toronto. “If the Liberal Party is forced to work with other groups in Parliament, it could prove difficult to increase spending or enact tax cuts, negotiate competitiveness improvements with the provinces, or present the united front needed to confront Donald Trump’s aggression on the trade file. With investors in the grip of deep uncertainty, the Canadian dollar is trading sideways.”

Investors would have preferred a majority result for either the Liberals or Conservatives, Schamotta said, in an interview Monday afternoon, he said the two major parties were more alike than different in their proposals. Without a majority, Prime Minister Carney will have a more difficult time implementing his plans.

Given the NDP’s poor showing — it won five seats and was leading in two at press time — Carney may have to depend on the Conservatives and Bloc Québécois for votes.

“Broadly speaking, these are both centrist platforms,” Schamotta said. “The Conservative platform is more driven by trickle-up economics, whereas the Liberals are planning to initiate a lot of spending and deliver a boost to the economy.”

Schamotta said the Liberals’ trickle-down platform laid out spending objectives designed to stimulate growth. Conservatives on the other hand, promised the same by putting more money into the hands of consumers and businesses.

In that sense, the election presented voters with a classic liberal-versus-conservative approach to navigating the trade crisis that has enveloped the global economy since U.S. President Donald Trump’s so-called Liberation Day. Carney proposed big-government-style programs to shepherd the Canadian economy through. Conservative Party leader Pierre Poilievre promised to prop up growth with tax breaks.

“The problem with that from an economics perspective is that the extent to which money gets out into the economy could be determined by how fast the productivity gains come,” Schamotta said. “It could’ve taken longer for those tax cuts to result in increased spending. From an investment perspective, the Liberal platform is likely better for markets in the near term.”

In a brief posted Monday, Schamotta wrote that voters see Carney “as the candidate best equipped to fight the country’s corner in Washington.”

Deficit, schmeficit

Both the Liberals and Conservatives put forward plans that, if implemented, would add to the federal government’s debt. The Grits’ promises would drive Ottawa’s debt-to-GDP ratio to 43% by 2029. The Conservatives’ plan would have come in at about 39%, one percentage point lower than the Parliamentary Budget Office’s baseline assumptions for the four years ahead. That’s according to a report posted Friday by Douglas Porter, chief economist and managing director economics and Robert Kavcic, senior economist and director economics at BMO.

The authors note that both platforms made their calculations based on a 1.7% GDP growth rate assumption this year. BMO has forecast just 0.7% growth.

Schamotta said investors aren’t worried.

“Canadian government debt is … still relatively low in comparison with Group of Seven counterparts,” he said. “Canada has ready access to debt markets and is not a borrower that will be at risk at any point in the near future.”

Still, deficit spending at a level promised by the Liberals makes Ottawa less able to stimulate growth should the economy suffer a significant trade war hit.

“That could mean that the government is forced to do more borrowing and more spending,” he said. “If we look at historical downturns … in virtually every case, private sector indebtedness ultimately was absorbed by the public sector balance sheet. And the problem in Canada is that the private sector is spectacularly indebted.”

Schamotta called it the “uncomfortable reality” facing Canadians.

“The only way for Canada to manage its way through a downturn at this point is to expand fiscal spending and to have the government put a floor under the economy for the time being,” he said. Investors understand that, so they’ve been “relatively welcoming” of the spending plans both major parties put forward.