A Special To the Point: 2026 Waypoints

A new year brings new beginnings. A clean slate. A fresh start. An opportunity to shed the weight, both literal and figurative, of the year just passed and embrace the moments and challenges that come with a fresh 3-6-5.

The ONpoint team is looking ahead to another year of success on behalf of our clients and continued growth for the firm, including the addition of  our new junior team member. To our readers, subscribers, clients, partners, and friends, we hope you had a restful holiday break and wish you good health, prosperity, and happiness in the year ahead. We are glad to be back.

The year is barely a week old, yet already it has delivered a series of developments that will almost certainly shape events in the days, weeks, and months ahead. Prepare yourselves. 2026 is shaping up to be a year of volatility at home and abroad.

We are kicking off the year with a series of micro-analyses and forward-looking assessments of the political and economic forces most likely to define the year ahead.

Welcome to 2026. Are you having fun yet?

In our special To the Point edition closing out 2025, we noted the tendency for historically consequential events to occur at the beginning or end of the calendar year. The Japanese attack on Pearl Harbour in December 1941 is an obvious example. More recently, President Trump’s tariff announcement in January 2025 quickly overwhelmed nearly every other political issue for the remainder of the year.

Two data points do not make a trend, but they do suggest a pattern. A defining feature of the Trump administration’s governing style is the use of early-year decisions to set, and attempt to control, the trajectory of the months that follow. January 2026 appears to be no exception.

In the early hours of January 3, Venezuelans were woken by the sound of anti-aircraft fire and rockets launched from MH-60 Direct Action Penetrator helicopters operated by the 160th Special Operations Aviation Regiment, with Special Operations Detachment Delta deployed on the ground. The objective was clear: capture Nicolás Maduro alive. By 2:29 a.m., Maduro and his wife were reportedly aboard the USS Iwo Jima.

Whether Operation Absolute Resolve becomes the defining event of 2026 or simply the first of many consequential episodes remains to be seen. What is already clear is that its political and economic ripples are being felt well beyond Venezuela. Ten days into the year, the operation has penetrated global, national, and local policy discussions alike.

For Canada, the implications are significant. Sovereignty concerns, trade negotiations with the United States, and Ottawa’s broader strategic alignment are all now in sharper focus. At the provincial level, cascading impacts are already being felt in sectors such as automotive manufacturing, energy, and intergovernmental relations. The operation has altered the backdrop against which domestic policy decisions will be made in 2026.

Against that backdrop, here are the political and economic dynamics most likely to shape the year ahead, with a few predictions along the way.

ONTARIO

Economic Headwinds

Ontario enters 2026 under mounting economic strain. The province’s manufacturing advantage began to erode in 2025, and that trend shows little sign of reversing. Investment has been delayed, operations scaled back, and capital is increasingly eyeing other jurisdictions. Despite periodic efforts to blunt the impact of U.S. tariffs, Ontario remains the most exposed province due to its deep integration with American supply chains.

The Premier campaigned heavily in 2025 on protecting Ontario from tariff impacts. Yet red tape, an increasingly uncompetitive tax environment, and the absence of a clear industrial strategy continue to weigh on growth. Progress on Ring of Fire development and targeted supports for tariff-affected businesses are meaningful, but they are not sufficient on their own.

What is missing is a coherent and credible economic vision. Ontario requires a policy framework centred on attracting investment, providing tax predictability, dismantling regulatory barriers, and moving away from a subsidy-driven approach to economic development. Our expectation is that the broader economic fallout from U.S. actions in Venezuela and the Western Hemisphere will force the government to confront these issues more directly in the months ahead.

Provincial Policy Priorities

The Ford government’s overarching objective is to position Ontario as an economic buffer against trade volatility. Its strategy rests on three pillars: diversifying trade relationships, accelerating critical minerals development in the Ring of Fire, and leveraging nuclear capacity as both an energy solution and an economic driver.

Energy has been framed as a strategic asset rather than a basic utility. Small modular reactors and expanded nuclear generation are central to the government’s long-term growth narrative, with projections of 150,000 new jobs and significant economic impact. Reliable, low-emissions power is being positioned as a magnet for data centres, advanced manufacturing, and life sciences investment. Procurement policies prioritizing Ontario- and Canadian-made goods further reinforce the use of public spending as an economic stabilizer.

Housing affordability, however, remains conspicuously absent from the government’s stated priorities. While a utility-style financing model for infrastructure has been explored, there is no commitment to apply it broadly or extend it to housing. The more than $200 billion infrastructure plan prioritizes transportation, schools, and hospitals, but does little to accelerate housing supply.

Meanwhile, regional governance reviews led by provincially appointed facilitators are advancing. These efforts are likely to increase provincial control over planning and approvals, enabling faster delivery of energy-related infrastructure even in the face of local resistance. The housing affordability gap, however, remains unresolved. By late 2026, the tension between ambitious job creation goals and persistent housing constraints is likely to become increasingly difficult to ignore.

Ontario Liberal Leadership Race

The Ontario Liberals are preparing for their third leadership contest in five years following Bonnie Crombie’s resignation at the party’s annual general meeting. While the race has been announced, timing remains uncertain as interim leader John Fraser and party officials weigh cost considerations against the desire for renewal.

Several potential candidates are already testing the waters. Liberal MPPs Stephanie Bowman, Rob Cerjanec, and Ted Hsu, along with federal MP Yvan Baker, have either expressed interest or are being encouraged to enter the race. As we have noted in previous editions, leadership contests often attract candidates seeking to build profile and influence rather than win outright.

Early attention is already coalescing around two figures. Federal MP Nathaniel Erskine-Smith is ambitious, media savvy, and increasingly frustrated by stalled advancement in Ottawa. He represents the party’s centre-left wing and has emerged as a vocal critic of the Premier. Dr. Andrew Boozary, a progressive primary care physician, has also gained traction among the party’s left flank, particularly on healthcare and housing.

Insiders describe a party split between these competing visions. Whoever emerges will face a political environment meaningfully different from that which shaped the 2025 election. Early polling suggests some fatigue with the PCs, particularly on housing, healthcare, and affordability. Our expectation is that the remaining years of the Ford government’s third mandate will prove its most challenging.

FEDERAL

Canada’s Economic Outlook

Canada’s economy in 2025 proved more resilient than many expected. The most dire forecasts did not materialize. Instead, U.S. tariffs produced a fragmented outcome. Autos, metals, and lumber absorbed meaningful shocks, while most Canadian exports remained tariff-free. Economists are entering 2026 with cautious optimism rather than alarm.

Growth expectations of 1 to 2 percent offer little comfort to Canadians facing affordability pressures, weak wage growth, and a tighter labour market. Still, policy responses at both the federal and provincial levels have generated some momentum. Procurement shifts, targeted supports, and investment incentives helped prevent a broader stall. The limitation is structural. Long-term growth remains constrained by unresolved issues in taxation, income structures, and small-business policy.

The central risk remains the July 2026 review of CUSMA. Nearly every major economic forecast hinges on its outcome. While the agreement continues to shield most Canadian exports from tariffs, uncertainty alone is weighing on investment. Even a constructive resolution may not restore confidence compiler confidence quickly.

Canada–U.S. Relations

Canada–U.S. relations enter 2026 in a strained state. Tariffs have fundamentally altered the relationship, and there are few signs of near-term improvement. The CUSMA review and Ottawa’s signalling toward deeper engagement with China will dominate bilateral relations this year.

The Trump administration has identified supply management, the Online Streaming Act, and the Online News Act as key irritants. While Washington appears to recognize the necessity of some form of continental trade framework, leverage remains firmly in U.S. hands.

Our expectation is that the CUSMA review will not deliver a long-term renewal. A shift toward rolling annual reviews beginning in 2027 is a plausible outcome, reflecting strained relationships and a preference for short-term leverage over long-term certainty.

Complicating matters further is Prime Minister Carney’s signalling toward a strategic pivot to China. In the aftermath of U.S. actions aimed at limiting Beijing’s influence in the Western Hemisphere, this posture carries significant risk. Whether intended as a genuine diversification strategy or a bargaining tool, China will be a defining issue in Canada–U.S. relations in 2026.

A Spring Election?

All signs point to an elevated probability of a spring federal election. Prime Minister Mark Carney governs with a narrow minority, a restless caucus, and a voter coalition pulling in opposing directions. That is not a durable governing arrangement.

A spring election would allow Carney to attempt to secure a functional majority, reset his caucus, and campaign before economic headwinds intensify. With the NDP leadership race concluding in March, shifting dynamics in Quebec, and continued Conservative momentum, the incentives are clear.

If Carney controls the timing, spring is his window. Waiting only increases the risks.

ABOUT TO THE POINT

To the Point – ONpoint Strategy Group's weekly roundup – cuts through the noise to deliver insight and analysis of key federal, provincial, and municipal stories shaping Canada's policy and political landscape. Designed for decision-makers and thought leaders, this newsletter is your go-to resource for staying ahead. Share these trusted insights with your network to spark meaningful conversations. Simply hit forward or follow ONpoint Strategy Group on X and LinkedIn to spread these valuable perspectives."

About ONpoint Strategy Group:

ONpoint Strategy Group is all about helping clients make an impact where it counts. Specializing in government relations and strategic execution, our team—Nico Fidani-Diker, Mariana Di Rezze, Krystle Caputo, David Morgado, Christopher Mourtos, Ellen Gouchman, and Brandon Falcone—works closely with clients to navigate complex political landscapes and bring their goals to life. With a practical, results-driven approach, we build strong relationships, craft winning strategies, and make sure every step brings clients closer to meaningful outcomes. We’re passionate about making sure our clients are heard, supported, and positioned for success.