Turning up the heat: Political summer ahead

The House of Commons has risen for its lengthy summer recess. While this usually signals a slowdown in the political calendar, this summer will offer anything but an opportunity to rest for the Prime Minister and Opposition Leader.

The final days of the spring parliamentary session offered up a grand finale akin to a Shakespearean drama. The House of Commons was buzzing with activity until the very final moments, from members of Parliament (MP) pushing through last-minute legislation—including Bill C-70 which aims to counter foreign interference—to the House Speaker surviving an(other) attempted ousting, and a forced showdown on the Liberal’s capital gains gambit. The atmosphere in Ottawa blended anticipation and observation, with every actor keenly aware that their performance could tip the scales in the upcoming election year.

The Liberal lowdown: Struggling with polls and policies

Trudeau’s Liberals find themselves navigating seemingly endless choppy waters. National polls suggest a further slide in popularity, with approval ratings hovering perilously around the mid-20s—a far cry from the buoyant “sunny days” of 2015. Although there was a significant uptick in support amongst younger Canadians following Budget 2024—tied with the Conservatives amongst this group at 33 per cent—the shadow of unmet promises and polarizing policies are causing Trudeau’s charm to wear thin.

The Conservative triumph in Ontario’s recent byelection for Toronto—St. Paul indicates a growing momentum for Conservatives—cracking the Liberal Toronto fortress for the first time since 2011. It shows the federal Liberals that every riding is now in play and no seat is safe come election year.

One policy pulling the Liberals under the tide has been the highly debated carbon tax. It’s been a lightning rod of criticism amongst conservatives and many middle-class Canadians feeling the pinch. The Parliamentary recess will offer the Liberals no reprieve on the carbon tax, with political events such as the Calgary Stampede and the Premiers' annual summer meeting in Halifax an opportunity for provincial leaders to voice their disapproval.

Enter Pierre Poilievre to the stage - the Conservative Leader who has made it his personal mission to “axe the tax” if given the chance next fall. His critique is sharp as it is unrelenting: that the “tax grab” disproportionately affects middle and lower-income Canadians while doing very little to combat climate change.

Adding fuel to Poilievre’s fire, and added distrust with the current Liberals, was a recent error in the Parliamentary Budget Officer’s (PBO) carbon tax analysis. The initial report outlined that the average household would pay significantly more in carbon tax than they would receive in rebates, causing a stir amongst Canadians who felt they were getting the short end of the “carrot” stick.

The clash over the carbon tax is more than just a policy disagreement; it’s a full-blown ideological battle. The carbon tax is no longer just about addressing climate change; it’s about competing visions for Canada’s future.

The Liberal’s green gamble versus the Conservatives’ economic rationale will be a defining issue in the next election, with both sides betting that their approach will capture the hearts, minds, and votes of Canadians. The nature of the summer will yet again play an unknown role in public opinion on this issue. Over the past few years, extreme heath, natural disasters, and fires have tended to shift support in favour of climate action.

Chrystia Freeland’s budget, loaded with ambitious spending on green initiatives and social programs, aimed to project a vision of a sustainable and equitable Canada. Yet, the capital gains tax reforms proposed within have unsurprisingly sparked widespread pushback from key groups such as small businesses and doctors. Despite this pushback, with public polling backing the approach, the Liberals are expected to proceed with implementation in the months ahead.

However, implementation of the capital gains tax—alongside numerous other major policy planks such as the package of clean technology and energy investment tax credits, and pharmacare all fall beyond the 12-to-18-month timeline, and well into the potential orbit of the next federal election.

Significant opacity lies ahead with many political decisions to impact the timing of the next federal election. Should the government go to full terms, the federal election is to be held in October 2025. However, it’s minority status is ever looming. Should the New Democratic Party (NDP) exit its agreement to uphold the Liberals in Parliament, minority politics would further escalate, as every vote in the House of Commons would hold the potential for a snap election.

Canadians will be in the front row for the pre-election campaigns launched already by the Liberals and Conservatives respectively. As MPs focus on their riding this summer, and party campaigns zero in on key constituencies, party platforms are being defined over this summer. Wedge issues and populist positions will dominate political headlines this summer. All the while, the machinery of government will continue to churn in the background, attempting to implement the government’s broad policy agenda.

Now more than ever, NATIONAL advises an integrated engagement approach, rooted in sound policy, to navigate and inform both decision-making by political and government processes ahead.