Ontario-Ottawa frictions will likely grow in Canada

Significance There are some concerns about how well-developed PC policy and fiscal plans are. The left-wing New Democratic Party (NDP) is now Ontario’s official opposition and has four years to define itself as a government in waiting. Impacts Carbon pricing and cap-and-trade will be scrapped in Ontario, despite the revenues they bring the provincial government. The NDP’s greater visibility in Ontario will help the federal-level NDP. Within Canada, Ontario faces a disproportionate impact from US steel and aluminium tariffs. Ford and his caucus are likely to rely heavily on tax code changes to shape policy outcomes.

Subject The impact of Ontario's decision to adopt a cap-and-trade system. Significance The Ontario provincial government will introduce a cap-and-trade system in the province by joining Quebec and California's carbon-trading market. Ontario is Canada's fourth province to implement a form of carbon-pricing; once it is in place, jurisdictions responsible for 80% of Canada's emissions will have some kind of carbon pricing. The joint carbon market with Quebec will also cover more than half of the Canadian population. Impacts The joint system may facilitate Californian companies' entry into the Canadian market. Success in raising money through the system may encourage other cash-strapped US states to join. Support for climate change policies could become a wedge issue in the federal elections in October, to Harper's detriment.


Significance The three main parties -- the leftist New Democratic Party (NDP), the centrist Liberals, and the right-wing Conservatives -- are nearly tied in national voter intention polls. While the effects of Canada's first-past-the-post voting system appear to give the Conservatives and the NDP better chances at winning a plurality of seats in parliament, all three parties have a chance at victory, an unprecedented situation in Canadian history. Impacts The death of refugee Alan Kurdi has resulted in all three parties promising to expand Canada's acceptance of refugees from Iraq and Syria. The longer campaign could result in a doubling of the election's cost to the taxpayer. Both the NDP and the Liberals have promised that this will be the final election using the first-past-the-post system.


Subject Canada's federal political outlook. Significance Canada’s three main parties have all selected the leaders with which they will contest the 2019 federal election. New Democratic Party (NDP) leader Jagmeet Singh, Conservative leader Andrew Scheer and Prime Minister Justin Trudeau of the Liberal Party now have two years in which to define themselves for the electorate and make a case for their parties to assume or resume control of government. Impacts Fallout from fundraiser links to the Paradise Papers tax avoidance controversy could undercut Trudeau’s Liberals. Trudeau’s strong Quebec ties will help him hold off the NDP, but Ontario losses could leave a Liberal minority government. Ontario’s 2018 provincial election will offer an early indication of the strength of Trudeau’s federal opponents.


Significance The Progressive Conservatives and the Wildrose party voted to merge with each other and contest the next provincial election in 2019 united as the UCP. The new bloc poses a significant threat to the province’s left-leaning New Democratic Party (NDP) government and to climate policy in Alberta and across the country. Impacts An Alberta-British Columbia spat over pipeline development seems inevitable whichever party wins in 2019, forcing Ottawa to intervene. The NDP government will increase borrowing as the election draws close to finance popular social programmes. Cheaper alternatives will undercut the Alberta oil sands even if a UCP government brings in deregulation.


Significance Andrew Scheer’s Conservatives increased their number of seats and won the popular vote, but the non-proportional voting system prevents them winning government. Jagmeet Singh’s New Democratic Party (NDP) performed reasonably but lost seats in Quebec to Bloc Quebecois, this election’s most unambiguous victors. Negotiations are underway to determine with whose support the Liberals will now govern. Impacts Western provinces’ alienation could escalate into demands for separation from Canada or new constitutional arrangements. Quebec will likely demand and gain more rights and autonomy in the federation, but not call for another independence referendum. Scheer will face Conservative leadership challenges but will likely remain party leader. The Trans Mountain pipeline will retain Liberal backing and be constructed.


Significance The governing Liberal Party presented the election as the most important in decades as it sought a mandate to lead the country’s emergence from the pandemic. Instead, the election delivered little change, leaving Prime Minister Justin Trudeau heading a minority government, most likely with support from the left-leaning New Democratic Party (NDP) as before. Impacts An expected cabinet shuffle will see new ministers at key departments including Justice and Foreign Affairs. Provinces will drop their resistance to the proposed childcare programme, which will be in effect before the end of 2022. No new pipelines will be proposed or built while Trudeau remains in office, given perceived government hostility to fossil fuels. The transfer to the provinces of significant responsibility for healthcare will go ahead as decentralisation accelerates.


Significance Although the Democratic presidential primaries do not begin until February 2016, the unexpected rise of Sanders as Clinton's challenger from the left reflects the growing discontent of strongly liberal 'progressive' voters with the dominant pro-market centre of the Democratic Party. Impacts Sanders would benefit if Vice President Joe Biden enters the 2016 race. Progressive Democrats will threaten TPP ratification in Congress. Well-funded progressive pressure groups may pursue litigation to affect policy agendas at state and federal level.


Subject Senate Democrats and the post-election party. Significance The 115th Congress will be sworn in on January 3 and President-elect Donald Trump's inauguration will occur on January 20. After bitter internal disputes over the ideological direction of the party and the reasons for Hillary Clinton's shock election loss, the Democratic Party will have to reformulate itself in opposition to the political programme of Trump and a Republican-controlled Congress. The party also will need to resolve questions of leadership, electoral strategy and policy priorities ahead of the 2018 midterm elections and 2020 presidential election. Impacts The record-low number of state-level seats held by Democrats will hinder recruitment of federal candidates with strong local credentials. Senate Democrats are likely to let most Trump appointees through confirmation and attack them once in office. Advocates of environmental and financial regulation from the party's left wing will pressure their centrist leaders.


Significance Conservatives have also pledged to support reforming the Senate as a non-partisan body and allow Trudeau to use his sizeable House of Commons majority to set policy without Senate interference. Impacts Prospective rejection of TPP by the US Congress may overshadow Canadian debate of the trade pact. Ending first-past-the-post voting may benefit the Liberals and New Democratic Party in future elections. Canadian cannabis legalisation may lead to stricter US border controls, with consequences for cross-border trade.


Significance The Trudeau government is proposing to limit tax advantages for small businesses in Canada, a move that has ignited widespread concern and criticism from business owners, business and professional associations, provincial premiers, opposition parties and backbench members of parliament within Trudeau's own party. The administration is facing difficulties halfway into its electoral mandate as it tries to implement the activist policy agenda on which it ran in the last election. Impacts Moving left on tax may win support from New Democratic Party voters, but Liberal climate policy remains a major hurdle for progressives. The provincial political landscape is likely to become less favourable to the Liberals before 2019. Trudeau’s personal popularity limits the space for the opposition to rise in the polls.


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