Transcript: What investors want to hear in election’s wake

What went wrong for the Conservative Party

For Poilievre’s Conservatives, the challenge was to convince voters that they offer change without chaos. While the economic message was clear — cut taxes, expand housing supply, shrink government — some voters may have drawn comparisons to Donald Trump and question whether the party’s tone, not just its platform, align with Canadian values and political culture. The party failed to broaden its appeal beyond the base, and that cost them the election.

The shadow that the U.S. cast on this election

This has been the most U.S.-influenced Canadian election in recent memory — not just culturally, but economically and strategically. The return of U.S. tariffs under the Trump administration placed Canada’s trade dependence on the ballot. Every party had to respond to this. It framed the election through a question on how Canada positions itself in a shifting geopolitical and economic order. Historically, Canadian politics has mirrored U.S. cycles with a lag, but this time, the two narratives collided in real time.

Issues that investors should focus on

Investors should focus on the following three issues post election. One is fiscal execution, which means managing the budget responsibly and delivering on financial promises. Second, housing supply and permitting reform. Both parties promised aggressive housing expansions, but execution hinges on unlocking bottlenecks in permitting, labour and materials. Third, what is Canada’s tariff strategy, trade diversification and managing currency risks. With U.S. tariffs now in place, Canada’s response — whether diplomatic- or renegotiation-focused — will have direct implications for exporters and Canadian-dollar performance. Investors should monitor retaliatory measures, sector-specific supports, and whether there will be new trade alliances, especially in the Indo-Pacific.

Sector opportunities

Canada is headed for a sustained period of weak economic growth, with fiscal policy providing only modest offsets to trade-related headwinds. The Liberal win under Mark Carney offers stability and predictability. Strategic investments in housing, defense and trade diversification will support select sectors. However, the broader economic growth will remain subdued, with green infrastructure and affordable housing providing the clearest sectoral opportunities. With the carbon tax repeal, the climate strategy shifts to investment-driven decarbonization. Investors in clean technology, electrification and sustainable infrastructure could benefit from regulatory clarity and procurement incentives. Lastly, the Liberals will continue to strengthen relationships in Europe and Indo-Pacific nations and multilateral institutions. This will provide some insulation against U.S. unpredictability. Another potential upside will be with Canadian dollar hedged exporters. Firms that are less exposed to the U.S. and better positioned in trade-friendly regions may see valuation premiums attached to them due to strategic insulation from U.S. tariff risk.

And finally, what’s the bottom line for investors?

Bottom line, investors should watch the following going forward: A key test will be whether the government actually turns its promises into real actions. We have to remember that there is a difference between campaign promises and policy rollouts. Secondly, the first post-election budget will be a credibility test. Investors should watch closely for whether the government recalibrates its assumptions or doubles down on unrealistic growth forecasts. Any sign of fiscal overreach or underdelivery could widen threads and weigh on the Canadian dollar. With the GDP slowing and tariff pressures mounting, investors should be skeptical of rosy revenue forecasts and watch closely for any signs of fiscal slippage. The first fiscal statement will reveal whether Prime Minister Carney is willing to reset expectations to match the tougher macro reality, or whether he will cling to campaign narratives at the cost of market credibility. A failure to align budgets with the actual economic environment, could result in higher Canadian bond yields, greater currency volatility, and relative underperformance of domestic equities. Lastly, with tariffs already in effect, how the government positions itself diplomatically and economically with Washington will shape investor sentiment.

Well, those are today’s Soundbites, brought to you by Investment Executive and powered by Canada Life. Our thanks again to Corrado Tiralongo of Canada Life Investment Management. Visit us at investmentexecutive.com, where you can sign up for our a.m. newsletter and never miss another Soundbite. Thanks for listening.

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