To the Point: Special New Year Edition
To the Point: Special New Year Edition
As we step into 2025, we want to thank you for your trust and partnership throughout 2024. Your support and confidence in ONpoint drives everything we do, and we’re excited to continue working together, navigating a very fluid and uncertain political landscape, to achieve great things. Here’s to a year filled with new opportunities, meaningful successes, and shared accomplishments. Wishing you, your family and your team a prosperous and inspiring 2025!
2025 is already shaping up to be a tumultuous and uncertain year for the country and the province as Prime Minister Justin Trudeau delivered the biggest political news story of the year (so far). Recognizing this monumental development, the ONpoint team wanted to usher in the New Year with a special edition of our To the Point newsletter to breakdown some of the key takeaways.
JUSTIN TRUDEAU ANNOUNCES HE WILL STEP DOWN, EVENTUALLY
Shortly after 10:45 a.m. yesterday morning, Prime Minister Trudeau announced he will be stepping down as Prime Minister after a new Liberal Party leader is elected to replace him. The Prime Minister stated he asked Governor General Mary Simon to prorogue Parliament until March 24th, during which a “robust and nationwide” process will be held to elect a new Leader of the Liberal Party of Canada. Trudeau will remain at the helm until that time and has spoken to Liberal Party President, Sachit Mehra, to initiate the process of a leadership race. The Prime Minister’s announcement comes after weeks of keeping out of the public eye following the resignation of Chrystia Freeland as a member of Trudeau’s cabinet. The Prime Minister’s announcement has several key important takeaways.
Caucus Revolt Overcomes the Prime Minister’s Hubris
In the immediate aftermath of Chrystia Freeland’s resignation, the Prime Minister dug in his heels, signalling he was prepared to once again weather another political storm and stay on to face Poilievre in the next election. It was only then that a majority of caucus members felt bold enough to publicly call for him to step down, especially after the proposed tax holiday, and rebate cheques, were so poorly received by Canadians that Freeland rejected them before her resignation. The Prime Minister made it clear in his announcement that his decision to step down was because he no longer enjoyed the confidence of his caucus and not because he didn’t think he was the best person to lead the party into the next election, yet another example of the Prime Minister’s own personal hubris. That being said, caucus only felt emboldened to pressure Trudeau to resign after it became clear his sticking around would impact their electoral prospects, not because they felt his policy decisions were negatively impacting Canadians.
The Lamest of Lame Ducks
A “lame duck” refers to a person or entity in a position of power or authority who is nearing the end of their tenure and, as a result, has diminished influence or effectiveness. The term is mostly used in the context of American politics but can be appropriately applied to the Prime Minister. Despite the fact the Prime Minister has lost the confidence of caucus and has exceptionally low support amongst Canadians, he will be at the forefront in tariff negotiations with the Trump administration. As a lame duck, the Prime Minister will have weakened political influence and legitimacy in these negotiations that will undoubtably impact the Canadian economy, national security, immigration and the broader political landscape here at home.
The Prime Minister’s Only Regret (and It’s not what you think)
Following his remarks, the Prime Minister was asked what regrets – if any – he had while in office. One may have expected the Prime Minister to express regret for several different failures during Trudeau’s tenure, such as facilitating the political polarization of the country, overseeing the abuse of our immigration system, or being fiscally irresponsible. Instead, the Prime Minister’s regret was not being able to replace the nation’s first-past-the-post electoral system with proportional representation or a ranked ballot. Trudeau abandoned the pledge in 2017, claiming there was no consensus to proceed with the changes, despite being elected in 2015 with a mandate to implement these reforms as part of his election platform. At the time, the Prime Minister implied that implementing these reforms would result in more extremist or fringe political parties gaining legitimacy, which he himself suggested the reform was supposed to prevent. If we asked Canadians, we suspect they might have a very different and long list he could have pointed to instead.
The Race to Replace Trudeau
Now that the Prime Minister’s exit strategy is set, the Liberal Party apparatus will be in full blown leadership race mode from here on out. Several names have been circulating for months to replace Trudeau, including current cabinet members Anita Anand, Dominic Leblanc, Felipe-Francois Champagne, and Melanie Joly. Other prominent and unsurprising names include former cabinet Minister Chrystia Freeland, former bank of Canada governor Mark Carney, and former BC Liberal Premier Christy Clark. Each of these leadership hopefuls, except for Christy Clark, will have to work to distance themselves from the policy failures championed by the Prime Minister while they served at the cabinet table. Even Mark Carney, the supposed behind-the-scenes champion of the carbon tax, will have to do his best to disassociate himself with the Trudeau brand.
This will be a tall order for all of them considering none of the abovementioned names had ever either publicly or privately tried to dissuade the Prime Minister from a certain course of action or policy initiative. It will be especially hard for Chrystia Freeland since the Prime Minister essentially said the two of them have been politically linked for the last ten years, a treatment Joe Biden gave to Kamala Harris during the US presidential election. The task becomes even more difficult as Trudeau will remain the face of government for the next three months, hanging like a spectre over the leadership race, in a global political landscape that is shifting rightward.
What Impact Does Prorogation Have on
Capital Gains Changes Introduced in Budget 2024?
Prorogation is a formal ending of a legislative session initiated by the Governor General at the request of the Prime Minister. At the time of prorogation, any legislation or motions introduced in the proceeding session will “die on the order paper” and will need to be re-introduced in the next session. Parliamentary committees are also dissolved and their work suspended. Each committee will need to be reconstituted after Parliament resumes but are not required to continue the work that was being done in the previous session.
Prorogation throws a wrench in the new capital gains measures announced in Budget 2024. While the Budget Implementation Act 2024 did receive royal assent, the new capital gains provisions were not included in the Act, and thus not officially law. In June, the government introduced a Notice of Ways and Means Motion to amend the Income Tax Act that will implement the capital gains changes, but it failed to become law due to procedural and political challenges. While the motion, which sought to increase the capital gains inclusion rate from 50% to 66.67% for corporations and trusts, was initially approved, the subsequent legislation required to implement these changes was not passed. However, the Canadian Revenue Agency has been collecting the tax since the motion was introduced in June, but if the government cannot pass legislation to officially implement this change before the next election, according to some politicos, there is precedent that would prompt the CRA to refund collected funds back to individuals and corporations.
Opposition Opportunities
Conservative Leader Pierre Poilievre released a three-and-a-half-minute video statement on X responding to the Prime Minister’s announcement. In it, Poilievre maintained the same line of messaging he has been using over the course of the last year and a half. Of note, it is the same messaging that Mr. Poilievre used in a two-hour interview that garnered over 42 million views on X alone. The only difference is Poilievre took aim at all the Liberal leadership hopefuls by linking them directly with the Prime Minister’s record, including Mark Carney’s support of the carbon tax. Poilievre is right not to deviate from the messages, policy positions, and yes, even the vibes, that have ascended him and the Conservative Party to the top of the polls. Regardless of who the next leader is, Poilievre needs to be laser focused on continuing to keep fresh in the minds of voters that Jagmeet Singh enabled the Prime Minister for the last 10 years and whether Canadians are better off because of it.
Jagmeet Singh’s reaction lacked political self-awareness, lambasting the Liberals for letting down Canadians over the course of his tenure. Singh also took shots not just potential leadership hopefuls but the entire Liberal caucus. Of course, Singh is responsible for propping up the Liberals since 2021 and currently shares political blame for the current state of the country. He failed three times in the last session to give Canadians the election they have been asking for. He did, however, commit to voting down the government in the next available confidence vote when the House returns, which will be an interim supply bill to fund the government until June. It is difficult to see what the play is for the NDP. Jagmeet’s own riding is at risk and the NDP may still end up in third place when all is said and done after the next election. The Party is not financially strong and lacks a clear policy distinction with the Liberals, a problem the Conservatives certainly don’t have. The NDP have little hope of launching a left-wing populist campaign à la Bernie Sanders after hitching their wagon to the Liberals for so long. Jagmeet’s calculation may be to ride off into the sunset with a pension and not have to worry about the mess in which he will have left the NDP. There is the distinct possibility that Jagmeet goes against his pledge to bring down the government, especially if the new Liberal leader feels the need to concede to demands of the NDP in the next confidence vote.
Premier Ford Skirts Questions About Triggering a Spring Election
Premier Doug Ford issued a statement on the PM’s resignation that focused squarely on the tariffs threatened by the incoming Trump administration and made no reference to the Prime Minister by name. The Premier also took questions from reporters following remarks from Queen’s Park. The hot topic for reporters was whether the Prime Minister’s announcement will at all have an impact on the Premier’s decision to call an early election. Of course, the Premier skirted the question, insisting he’s focused on getting a deal done with the Trump administration.
The Premier could still justify an early election call based on maintaining stable political leadership armed with a mandate to navigate political and economic uncertainty as negotiations with the Trump administration commence. On the other hand, calling an early election could be perceived as politically cynical and opportunistic. Ontarians could punish Ford for a selfish and cynical attempt to gain power from the distrust Canadians have for the Prime Minister and his party. He also leaves himself open to criticism for adding to a leadership vacuum during an economically and politically volatile moment for the country. The Premier would be wise to adopt a wait-and-see approach. If there are indications the next Liberal leader has secured the confidence of the NDP, thus punting the next federal election to October, the Premier could decide to pull the plug and call an election. However, if it looks as though a federal election will happen, the Premier may want to avoid going to the polls provincially.
Focal Points for the Remainder of the Week
Canada enters 2025 amidst significant political transitions and economic uncertainty. As these events evolve, our team will continue to monitor developments at the federal, provincial and municipal level as and provide the insights you need to stay informed and prepared for what lies ahead.
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, Brandon Falcone, and Mike Britton—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.
