The prime minister and his party gave up a lot of ground, surrendering seats and losing the popular vote Monday night. Minority government is no fun, and he’ll likely be fighting for his political life again in a couple of years.
The Conservatives blew an historic opportunity to topple a wobbly and insecure government racked by scandal and led by an egocentric with a troubled past, two ethics violations, public embarrassments and a mantle of hypocrisy. Not impressed.
The Dippers lost support, seats and credibility. They now form the fourth party in the House of Commons, with a caucus of dubious quality and scant experience.
The Greens blew the best chance they’ll ever have to elect members. She’s done.
As for Canada, this is not a good week. Quebec has a reborn regional party with seriously deep separatist leanings, and has drifted away. The West is isolated from the centre, with no government MPs, a growing sense of alienation and a steamy barbarian leader in Alberta. The fracturing and balkanization that’s taken place in our land since 2015 is remarkable. At the same time we’ve just endured four years of deficit spending, and have four more (much worse) years coming. All this at a time when the global economy is slowing and interest rates are near historic lows.
It’s not hard to tell the election was about giving people stuff in order to win their vote. It was not about the notion of nation. No leader shone. None inspired. It’s hard to get excited about those who pay you to like them. So the voter turnout fell with more than a third of us never bothering. Polarization is the result, and now millions of voters await the goodies they were pledged.
The question for investors is what the 2020 federal budget will bring. Some people fear the assault on small business will resume, the capital gains inclusion rate will be upped, the 10% luxury tax implemented and new incentives reflate bubbly housing markets. They should. That could all certainly happen.
But not so fast.
Minority governments are tenuous. The people in charge suddenly have to serve many masters. In this case not only are there ideological differences between the parties, but regional ones as well. Trudeau’s tenure as PM could be ended in a number of ways, having lost the support of many Quebeckers and most people west of the Ontario border. Suddenly whacking everybody’s retirement savings or making it even harder for the largest demographic to buy a house is political suicide. So the good thing about minority – even when the Libs have to bed down with the socialists – is its inherent instability.
What to do?
Nothing. Responding to this vote by selling off hunks of your portfolio would be rash. (Buying that $175,000 RV, however, might be a stroke.) Raising the cap gains rate would be a major move, and only an irresponsible gaggle of politicians would do it without research and warning. For a minority government to pull that off would be unlikely. Ditto for gutting the stress test or (as the NDP wants) returning 30-year mortgages. If the next budget opens those doors the consequences could be dire – and the government change.
Wait. Assess. Listen. Read this pathetic blog. T2 will likely say he’ll govern as if he had a majority, at the same time negotiating with other parties. Like every leader, he’s addicted to power. But he’s also no fool. In a country where the popular vote for Cons just topped his own performance, he knows there are limits.
The excitement, the ‘sunny ways’ and the youthful adrenalin are gone. Too much baggage. Too many slips. Trudeau has to be careful now. He gets that. And he is surely thankful all his opponents choked.