Trudeau's Liberals Oust Harper With Surprise Canada Majority

Canada's Trudeau Ousts Incumbent Harper
  • Son of former PM ends near-decade-long Conservative rule
  • Victory marks biggest comeback in Canadian electoral history

Justin Trudeau’s Liberal Party swept into office with a surprise majority in Canada’s election, ousting Prime Minister Stephen Harper and capping the biggest political comeback in the country’s history.

QuickTake Canada

With 99 percent of polls reporting, the Liberals were elected or leading in 184 of the 338 seats in the House of Commons, with the Conservatives on pace to take 99 and the New Democratic Party 44, according to preliminary results Monday from Elections Canada. Most polls had predicted the Liberals would win a minority government.

Justin Trudeau and wife Sophie
Justin Trudeau and wife Sophie
Photographer: Kevin Van Paassen/Bloomerg

The result is a vindication of Trudeau’s campaign to reject Harper’s budget restraint agenda, claiming the nation needs deficit spending to combat economic woes triggered by an oil-price collapse. Trudeau, 43, also used his youthful optimism to exploit a thirst for change, as almost three-quarters of voters said they were ready to oust Harper’s Conservatives after more than nine years in power. Harper plans to step down as party leader.

“Canadians from all across this great country sent a clear message tonight -- it’s time for a change in this country, my friends, a real change,” Trudeau told cheering supporters at a Montreal hotel.

The result reflected an east-west vote split in a country with six time zones, with Liberals dominating along the Atlantic coast and the country’s two largest provinces -- Quebec and Ontario -- while the Conservatives won most seats in western provinces such as Alberta. 

Currency Markets

The Canadian dollar fell on the results, down 0.2 percent to C$1.3043 per U.S. dollar in Toronto, dropping for a third day. The currency has depreciated 10.9 percent against the U.S. dollar this year.

“Investors are somewhat cautious about the change in government,” said Bipan Rai, director of foreign-exchange strategy at Canadian Imperial Bank of Commerce’s CIBC World Markets unit by phone from Toronto. “It might be due to some uncertainty about how the fiscal picture is going to look.”

Trudeau’s victory marks the biggest political rebound in Canadian history. The Liberals become the first third-place party to win an election, and the party’s seat gain of about 150 is the biggest ever. The Liberals, who governed for about two-thirds of the 100 years before Harper came to power, won just 34 districts in the 2011 election, the worst result in their history.

In this campaign, Harper, 56, was seeking to make history by becoming the first leader in more than a century to win a fourth consecutive election. With a victory, he would also become the second Conservative leader ever to govern for more than a full decade.

While never popular, Harper struggled to grow his support much beyond what might be considered his base, with his pool of accessible voters shrinking throughout the campaign.

“We put it all on the line, we gave everything we had to give, and we have no regrets whatsoever,” Harper said in his concession speech in Calgary. “While tonight’s result is certainly not the one we had hoped for, the people are never wrong.”

NDP Losses

Every opinion poll in recent days had indicated the Liberals held a firm lead in the race, and were on course for at least a minority victory. While the Conservative vote held relatively stable during the campaign at about 30 percent, Liberal gains came mostly at the expense of Tom Mulcair’s NDP, which held a slim but persistent lead in the opening weeks. Yet Trudeau, whose father rose to power in the first wave of “Trudeaumania” in 1968, was seen by voters as having the best chance of defeating Harper. Trudeau becomes the second-youngest prime minister in Canadian history.

Trudeau’s Liberals swept Canada’s four Atlantic provinces, dominated the country’s three biggest cities -- Montreal, Toronto and Vancouver -- and even appeared set to capture a seat in Calgary, Harper’s hometown, for the first time since 1968, when Trudeau’s father won his first election. Harper took 47 of 62 seats in the prairie provinces, including oil-rich Alberta.

The NDP, which had 95 seats when the election was called, was on pace to finish with less than half that many.

“I’m quite surprised,” said Janet Brown, a Calgary-based independent pollster. “I think we were all prepared for a Liberal minority but what appears to have happened is the NDP vote has really collapsed.”

Stimulus Platform

Trudeau will now seek to pursue his platform including higher infrastructure spending and middle class tax cuts. Those will be financed by budget deficits of about C$25 billion ($19 billion) over three years and tax hikes on workers earning more than C$200,000. He’s also pledged to legalize marijuana, cancel the purchase of F-35 fighters, be more assertive on climate change and abandon the country’s bombing campaign in Syria and Iraq against the Islamic State.

His challenges include reviving an economy buffeted by plunging prices for oil and other commodities. Canada’s economy is forecast to expand just 1.1 percent this year, among the weakest in the Group of Seven, forcing the Bank of Canada to cut interest rates twice this year.

The additional fiscal stimulus under the Liberal plan could ease pressure on the central bank for an additional rate cut, Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors. The bank’s next rate announcement is scheduled for Oct. 21.

Trudeau needs to find ways to build new pipeline capacity in the face of opposition from environmentalists, and determine whether the Bank of Canada should target higher inflation. He also needs to manage some of the world’s most expensive real-estate markets that threaten the financial system.

Stephen Carter, a Calgary-based political strategist and president of QED Marketing, said Trudeau’s win "probably means nothing but good for the country" based largely on a change in government.

“The Conservatives have been unsuccessful in bringing Canadian oil and Canadian product to tidewater, meaning we weren’t able to get a world price for our oil products. Perhaps with a Liberal government, we will be more successful," Carter said.