The Canadian election – and what it means for the UK and Starmer

Could tariffs, trade, Trump and Trudeau save Starmer from being the last man on the Left?

At the start of this year, it looked all but certain that by the end of 2025 Keir Starmer would cut a lonely figure as one of the last remaining centre-left leaders in the West. With the inauguration of President Trump in the US, and new centre-right governments set to be elected in Germany, Australia and Canada.

But with the resignation of Justin Trudeau as Canada’s Prime Minister, and Mark Carney looking likely to succeed him as Liberal leader, could that pattern now be heading for an upset?

The state of play:

For almost three years Pierre Poilievre’s Canadian Conservatives have enjoyed a large, sustained poll lead over Trudeau’s Liberals.

But in recent weeks the race has narrowed dramatically.

Until Christmas, the Conservatives held a 20+-point advantage. But since Trudeau announced his resignation in January, the Conservative lead has almost evaporated, with a recent IPSOS poll even putting the Liberals slightly ahead.

In the contest to replace Trudeau as next Liberal leader, Mark Carney enjoys a 12-point lead over nearest rival Chrystia Freeland. Whilst not quite a shoo-in given the run-off voting system being used, Carney is the clear front-runner to face-off against Poilievre at the General Election.

So what’s driving the shift in the polls, how will it impact each party’s strategy, and what could the outcome mean for the UK?

The issues:

Canadians rate inflation and the cost of living as their top priority, followed by healthcare, housing costs and immigration. Unsurprisingly, relations with the US have also risen up voters’ priority list.

Up to now this has given the Conservatives a strong issue advantage, polling as the strongest party on the economy, inflation and taxation – with the Liberals ahead on healthcare.

But ‘events, dear boy’ have shifted this dynamic…

The Trump factor:

Donald Trump’s threat of 25% import tariffs on Canadian goods, coupled with his talk of Canada becoming the ‘51^st State’, have – at least temporarily – created a mood of national unity in the face of an external threat.

Traditionally, this type of public sentiment benefits an incumbent government, unless and until that government is seen to have handled the crisis and threat badly.

This feeling of immediate crisis may dissipate, but it’s not the only challenge Poilievre’s Conservatives now face…

The Trudeau factor:

With Trudeau’s resignation, one of the big drivers behind the Conservatives’ once large lead has been removed. Voters primarily motivated by ousting him will now take a more balanced look at the choice of candidates on offer.

And this change of leader gives the Liberals a chance to jettison dead-weight policies – with Mark Carney swiftly pledging to axe the consumer ‘Carbon Tax’. A move aimed at neutralising one of the other central planks of the Conservative campaign.

‘Axe the Tax’ or time to adapt?

Having made ‘Axe the Tax’ and Trudeau’s unpopularity key tenets of the Conservative campaign, these events clearly pose a challenge to Poilievre’s strategy.

In response, he has sought to tie Carney to Trudeau’s record and coined the term ‘Carbon Tax Carney’ – pointing out that businesses will still have to pay, with costs passed on to the consumer. But this is a more complex case to make. And clearly Carney has punctured a hole in the ‘Axe the Tax’ slogan and reduced its potency.

At the same time, Poilievre has to show he is best placed to deal strongly with Trump and counter Carney’s heavyweight economic background.

So should Pierre pivot away from his ‘Axe the Tax’ slogan?

Given their poll lead on tax and the economy, the Conservatives’ best bet is to stick with these themes of lower taxes, affordable homes and ‘Canada first’ – whilst reframing and reprioritising some of the message.

Expect to see the Conservatives present Carney as part of the ruling Liberal elite who caused Canada’s economic malaise – and so cannot be the person to turn things round.

And Poilievre will seek to find language that ties Carney to the Liberals’ economic record – making the case that those who advocated policies that have made the country more vulnerable to tariffs cannot be the best people to deal with Trump.

Crucially, they’ll need to present the Liberals – even under a Carney leadership – as more of the same.

A reframing of the business Carbon Tax as ‘Carney’s Jobs Tax’ could prove effective, alongside a characterisation of a Carney premiership as ‘putting the accomplice in charge of the clear-up’, ‘making Trudeau’s co-pilot the captain’, or ‘handing the keys over to the person who crashed the car’.

But will these sorts of attacks stick?

Will it be Carney’s Canada?

For his part, Mark Carney will be looking to emulate a 1992-style John Major victory, and there are significant parallels:

An incumbent party seeking to pull off the trick of appearing to be a new government with a new leader.

An unpopular tax policy jettisoned (for Carbon Tax read Poll Tax).

And a difficult economic backdrop neutralised by touting economic credibility and experience, as Carney will aim to do as he emphasises his record as a Central Bank Governor who steered both Canada and Britain through economic turbulence.

With 86% of Canadians preferring a quick election to give the new government a strong mandate in dealing with President Trump, a snap poll could now suit the Liberals – allowing Mark Carney to capitalise on the novelty boost a new leader can give, and seeking to represent both change and experience.

Carney has a net favourability of +13%, level-pegs with Poilievre on defending Canada’s interest against Trump, and picks up a few percentage points from the smaller New Democratic Party.

Carney’s not without vulnerabilities – particularly over his ties to the financial sector and resulting calls to disclose all his business interests – which the Conservatives are bound to exploit.

But as things stand, with Poilievre a more polarising figure, this gives Carney a personal advantage in the leadership ratings. Meaning the contest could become a battle of economy Vs personality.

What does Canada’s election mean for UK trade and politics?

Domestically, the Canadian elections will be watched closely by all the main UK parties.

For Labour, a Liberal victory would provide hope that low poll ratings can be turned around with a credible centre-left economic programme and a leader who has better favourability ratings than their opponent.

For British Conservatives – as well as many in Reform – Pierre Poilievre has become quite a poster child. It was no accident that Pierre was one of the first leaders Kemi Badenoch met when she became leader.

A Conservative win in Canada will provide a playbook that those on the centre-right in the UK will seek, at least in part, to emulate. But if they lose, it will leave UK Conservatives in particular concerned that a formula they hoped to learn from has not delivered against an unpopular centre-left government.

Geopolitically, a Liberal victory would mean Keir Starmer has another centre-left leader alongside him at international gatherings – and in Carney someone who has an unusually deep understanding of Britain.

But Starmer is likely to find common cause with whoever becomes Canadian PM.

The rapidly changing world under Trump means there will be an ever-stronger case for deeper economic and security ties between like-minded allies like Britain and Canada.

This means negotiations over a UK-Canada free-trade agreement, which broke down last year, could finally resume – if the thorny issues over food imports can be resolved.

A Final Thought:

Across the globe, governing parties that have presided over high inflation and stagnant economies have been booted from office.

So it would be quite a feat for the Canadian Liberals to buck this trend, with Poilievre’s Conservatives maintaining significant advantages on key issues. And if a surprise happens and Mark Carney doesn’t win the Liberal leadership on 9^th March, Pierre’s path to power remains easier.

But suddenly, thanks largely to Trudeau’s resignation and Trump’s tariff threats, the race to become Canada’s (next but one) Prime Minister is now far more competitive – and one to watch in the months ahead.