The Canadian election may have been somewhat eclipsed by US President Donald Trump's trade war, but within the country, Canada turned a political corner. In many ways, the Canadian election results have depicted how the grounds have shifted considerably since the last election in 2021. First, the Liberal party has made a rather expected comeback with just a few seats shy of the majority needed to form the government. In its fourth successive mandate, the Liberal Party has shown a remarkable resilience in sustaining popularity. However, this time, the external factor in Donald Trump was more consequential in galvanising sentiments inside Canada than the Liberal party's own steps towards political revival. Second, the change of face of the Liberal party from Justin Trudeau to Mark Carney was a prominent factor in shaping the party's consolidation in just a few months. Third, except the two leading parties - Liberal and Conservative - the vote share of all other parties, most profoundly, the Jagmeet Singh-led New Democratic Party (NDP), shrank compared to the last election in 2021. These changes have translated to a face change of Canadian politics as both Jagmeet Singh and Pierre Poilievre have been unable to retain their respective seats.
Carney Has Some Room To Move
With the Canadian election now behind us, the task ahead for incoming Prime Minister Mark Carney is formidable. The Liberal Party secured 168 seats - just short of a majority in the House of Commons - necessitating outside support. The most likely partner is the New Democratic Party (NDP), though its diminished strength in this election makes it a junior ally. The NDP, which saw a significant drop in its vote share - down by 11.6% - suffered its most symbolic blow with the loss of its leader Jagmeet Singh, who failed to retain his own seat. For India, this is notable as the NDP supported elements of the Khalistan movement, straining India-Canada ties. With Singh's departure and the party's weakened mandate, this aspect of Canadian politics may now fade. Carney's Liberals, meanwhile, require support from only four to five additional MPs, meaning the NDP's influence on policy - especially foreign affairs - will be tempered. This gives Carney room to chart his own path, particularly on economic and international matters.
Carney's credentials as a central banker with global standing - having previously led both the Bank of Canada and the Bank of England - lend him credibility at a time when economic issues dominate. Canada's economy has struggled in recent years, and with the United States being both its largest trading partner and closest geographical neighbour, much of Ottawa's foreign policy will continue to be driven by economic realities.
Governing Amid Conflict
For the Conservative Party, this election was a major setback. Leader Pierre Poilievre lost his seat in rural Ottawa, which he had held since 2004. His Trump-style rhetoric - mirroring conservative populism in the United States - ultimately failed to resonate. In fact, Donald Trump's repeated attacks on Canada, including calling it the "51st state" and ridiculing Justin Trudeau as a mere "ask governor", triggered a nationalist backlash among Canadians. Instead of weakening the Liberals, Trump's comments created a unifying moment for the country, with Carney benefiting from a wave of patriotic sentiment. What followed was a widespread symbolic protest: Canadians cancelled trips to the US, pulled American wines from store shelves, and even sold properties in American cities.
Carney largely stood above the fray during the campaign, letting the public mood shift in his favour. But now, he faces the difficult task of governing amid a still-tense relationship with Washington. Though there have been signs of Trump moderating his tone-especially after pre-election and post-election calls with Carney, the real test will come on issues like trade, tariffs, and resource sharing. Should Trump resume his hard-line stance, Carney's political capital could begin to erode.
Focus On Diversification
For Canada, which remains heavily reliant on US markets, diversification may be a necessity now. Yet, relations with the two largest economies in Asia - China and India - are currently at a low point. The diplomatic standoff with India over the past year, exacerbated by Trudeau's handling of the Hardeep Singh Nijjar case and repeated references to alleged Indian interference, has left bilateral ties strained and stagnant. However, Carney's emergence offers a possible reset. As a fresh face without the political baggage of Trudeau, and as someone who is widely seen as pragmatic rather than ideological, he has an opportunity to recalibrate Canada's foreign policy. For New Delhi, this could be a window to re-engage, cautiously but constructively. While a dramatic upgrade in bilateral relations may be premature, the fundamental underpinnings - strong economic ties, growing Indian diaspora in Canada, and resilient people-to-people connections - remain intact.
(Harsh V. Pant is Vice President, ORF. Vivek Mishra is Fellow, Americas, ORF)
Disclaimer: These are the personal opinions of the author
