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MNI POLITICAL RISK ANALYSIS - Canada Election Preview Sep 2021

Executive Summary

  • Prime Minister Justin Trudeau's decision to call a snap general election looks to have backfired, with opinion polling showing his Liberal Party neck-and-neck with the opposition Conservatives, meaning neither party is likely to win an outright majority.
  • There is not expected to be any significant market impact from the election result, with both major parties committed to continued deficit spending in the wake of the COVID-19 pandemic, while there is unlikely to be any threat to Canada's trend of fiscal rectitude, its stable banking system, or its robust regulatory environment from either a Liberal or Conservative administration.
  • The main risk to stability comes in the form of a deadlocked election, where no party secures a majority and neither Prime Minister Trudeau nor Conservative leader Erin O'Toole are able to form a stable minority administration. In this scenario another snap election could be required to break the stalemate, lengthening the period in which the Canadian government is unable to enact policy decisions and increasing uncertainty.
Full PDF attached below:

MNI POLITICAL RISK ANALYSIS - Canada Election Preview.pdf

Chart 1. Canadian House of Commons Before Dissolution, Seats

Source: House of Commons, MNI

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