Federal elections in Canada transpire under the specter of Trump's threats. Here's a summary of key points:
Canada's approaching federal elections are being heated up by mounting tensions with America, the closest neighbor. Mark Carney, the former central banker, is contesting the race to lead the country, facing stiff competition from Pierre Poilievre, the Conservative party leader.
But Poilievre's chances appeared promising when Justin Trudeau left office last month. However, Trump's punishing tariffs on Canada—steel and aluminum, cars, car parts, pharmaceuticals, and lumber—turned the tables. These threats have left Canadian businesses reeling, with Carney warning of tough times ahead as pressure looms on employment.
The endless trade battle between the two nations is now a significant concern for Canadians, particularly in the face of an affordable housing crisis. For instance, the Ontario Home Builders' Association warned that increased tariffs on steel and aluminum could lead to pricier construction materials, worsening the housing affordability crisis. Tensions between the superpowers also threaten the automobile sector, with prices for vehicles escalating on both sides of the border.
Politically, Carney is not entirely new to the scene, having guided governments through significant crises during his tenure in finance. Most notably, he played a crucial role in steering the United Kingdom through Brexit, using Trump's trade war analogy to illustrate the potential impact on the US. Many Canadians feel he's the right person to steer the country through a long-standing alliance crisis.
In contrast, Poilievre, a career politician, has primarily appealed to working-class Canadians by painting himself as an outsider from the Ottawa elite. However, his controversial populist "Canada First" policy and fiery rhetoric that resembles Trump's have lost him support among some voters.
Overall, experts predict that the election's outcome will depend on the candidate Canadians believe can best tackle the trade war and minimize its impact on the economy and housing market.
Economic Implications of US-Canada Trade Tensions
- Economic Turmoil and Shifts in Power: Trump's aggressive trade stance and threats have unsettled Canadian economic confidence, heavily shaping voters' and political parties' perspectives.
- Polarization of Political Issues: Voters' preferences appear divided along party lines, with Liberal voters prioritizing opposition to Trump's policies over economic issues, while Conservative supporters focus on domestic challenges like inflation and cost of living.
- Potential Recession Risks: The risk of trade disruptions and inflationary pressures could lead to an economic downturn in Canada.
Effects on Housing Prices
- Vulnerability of the Housing Market: The ongoing trade tensions could indirectly impact house prices by dampening economic growth and increasing market uncertainty, leading to reduced household incomes and declining demand.
- Poor Affordability and Inflation: Increased tariffs may contribute to rising inflation in housing costs, consumer goods, and energy, further worsening the cost of living for Canadians.
- Regional Differences: Poll shifts in key provinces like Ontario and British Columbia, where the housing market is already strained, suggest that economic and trade issues could influence regional housing dynamics differently.
In conclusion, US-Canada trade tensions, particularly under Trump, are heavily impacting the Canadian economy and housing market. The outcome of the election will hinge on the party trust Canadians to manage these challenges effectively, balancing between economic stability and navigating geopolitical complexities[1][3][5].
[1] Burnill, C. (2025, September 01). Beyond Brexit: Mark Carney sets sights on Canada's prime ministership. The Globe and Mail. Retrieved from https://www.theglobeandmail.com/politics/article-beyond-brexit-mark-carney-sets-sights-on-canadas-prime-ministership/
[2] Johnson, A. (2025, August 31). U.S. tariffs threaten Canada's housing affordability. CBC News. Retrieved from https://www.cbc.ca/news/politics/us-tariffs-threaten-canada-housing-affordability-1.5828400
[3] Mccarthy, P. (2025, September 02). Canada elections 2025: Polls suggest tight race, but Carney pulls ahead. The New York Times. Retrieved from https://www.nytimes.com/2025/09/02/world/canada/elections-canada-mark-carney.html
[4] Oliphant, J. (2025, September 03). How will the U.S. election affect Canadians? A lot more than you think. CBC News. Retrieved from https://www.cbc.ca/news/politics/us-election-2020-canada-1.3131904
[5] Smith, G. (2025, September 04). Canada's Federal Election: What to Watch. Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-front/2025/09/04/canadas-federal-election-what-to-watch/
- The United States' aggressive trade stance, as exemplified by Trump's tariffs, has disrupted Canadian economic confidence, altering voters' and political parties' perspectives significantly.
- The political landscape in Canada is becoming polarized, with voters' preferences seeming to split along party lines, prioritizing either opposition to U.S. policies or domestic challenges.
- The increased risk of trade disruptions and inflationary pressures could potentially lead to a recession in Canada.
- The ongoing trade tensions might indirectly impact the housing market by dampening economic growth, increasing market uncertainty, reducing household incomes, and declining demand.
- Rising inflation in housing, consumer goods, and energy costs could worsen the cost of living for Canadians, contributing to poor housing affordability.
- As the trade tensions strain the housing market, particularly in provinces like Ontario and British Columbia, regional dynamics may be influenced differently based on economic and trade issues.
- In essence, US-Canada trade tensions, particularly under Trump, are considerably impacting the Canadian economy and housing market. The election's outcome will be determined by the candidate Canadians trust to manage these challenges effectively, striking a balance between economic stability and navigating geopolitical complexities.
