Election 2021 Results and Wrap up

September, 2021

By: Prospectus Associates 

The Liberal Party and Justin Trudeau have been re-elected to another strong minority government. At time of writing, it appears as though the Liberals have won 158 seats, the Conservatives 119 seats, the NDP 25 seats, the Bloc Quebecois 34 seats, and the Greens 2 seats.

The Liberals won their new government in Ontario. They won most of the province’s 121 ridings. Their victory was especially strong in Toronto. In 2019, the Liberals won all but three seats in the Greater Toronto Area. In this election only one seat got away (Thornhill). This was enough to offset minor losses in Atlantic Canada and Quebec. Approximately 58 percent of Canadians voted in election 2021, including one million mail-in ballots. The overall form and character of the next government has been set— the Liberals will enjoy another sturdy minority in the House of Commons. When they want to pass legislation they can pick one of three different opposition parties, the Conservatives, NDP, or Bloc to help them get the required votes. That gives them excellent leverage in any Parliamentary negotiations, and we expect them to continue to aggressively pursue their preferred agenda in the years to come.

Justin Trudeau will continue to be Prime Minister for the foreseeable future. Of course, Justin Trudeau had higher expectations at the start of the campaign. Team Trudeau thought this summer/fall would be an ideal time to win another majority government. They believed that Canadians would be satisfied with their handling of the pandemic, and with over 80 percent of Canadians having received at least one COVID vaccine and the economy rebounding from the depths of 2020-21, the polls were showing that a majority government was in their grasp and they could lock in another four years of government. These plans didn’t pan out as expected.

The election started at the beginning of a series of calamitous events: the fourth wave of COVID-19, the Afghanistan crisis, and punishing wild fires in B.C. Canadians became upset at Trudeau and his opponents pounced, calling him selfish and self-centered, looking after himself when he should’ve been leading Canada. The Liberals likely expected some residual anger for calling the election; Canadians generally get upset whenever they’re forced to vote. Politicos of every stripe, however, expected this frustration to quickly dissipate after a few days. But in 2021 that anger hung around and intensified, eventually spreading to Justin Trudeau. Canadians directed their ire at Trudeau, questioning his integrity and fitness to lead. Many appeared to tire of the Prime Minister, and they were looking to move on and support another candidate.

The Conservatives and leader Erin O’Toole were the immediate beneficiaries of this phenomenon. After two weeks of campaigning, the Conservatives shot out to a lead in national polls. Erin O’Toole quickly released a comprehensive election platform and effective ads. He cast himself as a happy warrior, ready and able to lead a centrist government. It looked like the Tories had a good chance of winning election 2021. But then, with three weeks before election day, it all began to fall a part for the Conservatives. The Liberals attacked O’Toole on guns, vaccines, and private healthcare. O’Toole thought his centrist platform would shield him from these types of attacks, that he could point to his policy planks and Canadians and journalists would be satisfied with his answers. But that didn’t happen, and the questions kept coming at O’Toole. In the middle of the election he had to spend a week answering questions about guns, sapping his momentum.

Meanwhile, the People’s Party of Canada (PPC) seized on the issue of mandatory vaccine mandates and found newfound support. PPC leader Maxime Bernier held large rallies in different parts of the country and amassed thousands of social media followers. Exit polls indicate that they received approximately five percent of the national vote. The PPC didn’t win any seats in this election, but they played spoiler for the Conservatives in many key ridings, especially in southern Ontario. O’Toole also suffered from poor luck, with Alberta experiencing a surge of COVID cases in the weeks ahead of election 2021. Alberta Premier Jason Kenney endorsed O’Toole for the Conservative leadership, and that support was critical to O’Toole eventually winning that race. So when journalists asked O’Toole whether he still supported Kenney and his handling of COVID, the Conservative leader had no good options and stayed silent. It was easy pickings for Trudeau, who told pandemic-fatigued voters that an O’Toole government would work with Kenney to extend and prolong our collective COVID misery. O’Toole had hoped to find the middle path between the Liberals and PPC, but instead he was squeezed on the left and right, taking blows on both sides. And while O’Toole was stuck in this hailstorm, the Liberals kept attacking.

The Liberal party has become a focused, determined political machine. Thanks to their investments in advanced data analytics, polling, and marketing, it has an in depth understanding of the Canadian electorate. The party is adept at targeting the subsets of voters that can be persuaded to vote for it, identifying voting coalitions and motivating them to vote Liberal. Housing affordability and daycare were for young families in the suburbs; tighter restrictions on gun ownership were for urban Canadians; climate change and plastic waste policies were for environmentalists; and so on and so on. The Liberals have found ways of slicing and dicing the electorate to their advantage. This type of micro-targeting is especially helpful in close elections such as this one. The Liberal platform and daily talking points were not accidental or haphazard. They were targeted at those groups of Canadians still willing to vote for Trudeau--- centrist and centre-left voters who may be disenchanted with the Liberals, but were worried about a Conservative government. Eventually, the Liberal message broke through. With the polls looking like a tight race between the Conservatives and Liberals, left-leaning voters became nervous about an O’Toole government. The Liberals coaxed them back into their tent, turning close races in the GTA and elsewhere into convincing wins. Fortress Ontario and, especially Fortress Toronto came through for the Liberals again, and Justin Trudeau has won another election.

Leadership Reviews

Justin Trudeau is likely the safest of the political party leaders. Yes, he didn’t secure his coveted majority, dragging Canadians through a largely unnecessary election. But he saved face by repeating his relatively impressive results from 2019. He’s won the right to go out on his own terms. Rather than being taken out via a backstage coup, Justin Trudeau can start lining up his post-politics career, exit in a year or two, and set the stage for the next Liberal leadership contest.

Bloc leader Yves-François Blanchet should also be safe in his job. The Bloc held onto most of the seats they won in 2019, helped by the English-debate and its question about whether Quebec endorses systemic racism. Blanchet will now hold a strong position in this new minority government, and the Bloc will no doubt use it to advance Quebec’s interests in federal politics. But neither the Conservative, NDP or Green party should feel so secure in their jobs. Many Conservatives will be disappointed once again that they couldn’t beat Justin Trudeau. They’ll be mad with Erin O’Toole’s pivot to the center, arguing that a Liberal Lite approach never works, and a harder line on debt, affordability, carbon taxes and so on would’ve been a better approach. This sort of armchair quarterbacking quickly overcame O’Toole’s predecessor Andrew Scheer. O’Toole will have to mount a spirited self-defence in the days and weeks ahead to avoid a similar fate. He can point to the fact that the Conservatives managed to hold Trudeau to a minority when the Prime Minister enjoyed all the advantages of incumbency as well as the special conditions of the pandemic, when the Liberals were able to spend billions of dollars on stimulus funds and receive nearly exclusive media coverage for more than a year.

The Conservatives gained seats in Atlantic Canada and held their own in Quebec. It’s Ontario that remains the unsolvable mystery for the Tories. The NDP and Greens will also face leadership questions. The NDP and leader Jagmeet Sigh increased their seat count by one, and the party will now hold 25 seats in Parliament. That could be enough to secure Singh’s future at NDP headquarters, but many detractors may begin grumbling whether the party has topped out under Singh. The NDP has a difficult leadership review process, so Singh will also have to defend himself from leadership contenders.

Finally, Green leader Annamie Paul was already facing internal party squabbles before this election. The party managed to hold onto one of its seats on Vancouver Island and pickup a surprise victory in Kitchener Centre, but it’s total vote count was down, and Paul lost her own riding in Toronto Centre. It’s likely that Paul’s days as leader of the Green Party are numbered.

Policy Agenda for the New Liberal Government

The Liberals will leave the leadership machinations to the other parties. Having won another minority government, the Liberals will begin the work of selecting a cabinet and preparing a Throne Speech. We expect Parliament to resume sometime soon after Thanksgiving (October 11). When it returns, expect the Liberals to pursue a legislative agenda that will align with the priorities of the NDP and the Bloc. They will continue to push their ambitious climate agenda and daycare agreements with provinces, among other progressive policies. Below we highlight a few items from the Liberal’s policy platform from Election 2021.

COVID-19 Vaccines and Pandemic Supports

• Table legislation to ensure that every business and organization that decides to require a proof of vaccination from employees and customers can do so without fear of a legal challenge.

• Within 100 days, a re-elected Liberal government will introduce amendments to the Canada Labour Code to provide 10 days of paid sick leave for all federally regulated workers so that no one has to choose between going to work sick or paying their bills.

• Convene provinces and territories to develop a national action plan to legislate sick leave across the country, while respecting provincial-territorial jurisdiction and the unique needs of small business owners.

Housing

• Introduce a tax-free First Home Savings Account will allow Canadians under 40 to save up to $40,000 towards their first home, and to withdraw it tax-free to put towards their first home purchase, with no requirement to repay it.

• Double the First-Time Home Buyers Tax Credit, from $5,000 to $10,000, which will put $1,500 in your pocket to make a home purchase a little bit easier.

• Reduce the price charged by the Canadian Mortgage and Housing Corporation on mortgage insurance by 25%. For a typical homebuyer, this will save $6,100.

• Increase the insured mortgage cut-off from $1 million to $1.25 million, and index this to inflation, to better reflect today's home prices.

• Invest $4 billion in a new Housing Accelerator Fund which will grow the annual housing supply in the country’s largest cities every year, creating a target of 100,000 new middle class homes by 2024-25. This application-based fund will offer support to municipalities that: grow housing supply faster than their historical average; increase densification; speed-up approval times; tackle NIMBYism and establish inclusionary zoning bylaws; and encourage public transit-oriented development. This fund will support a wide range of eligible municipal investments, including red tape reduction efforts, and reward cities and communities that build more homes, faster.

Business Supports

• Extend the Canada Recovery Hiring Program to March 31, 2022, so businesses can hire more workers and Canadians can get back on the job.

• Provide Canada’s hard-hit tourism industry with temporary wage and rent support of up to 75% of their expenses to help them get through the winter.

• Keep moving forward with our plan to boost business investment by allowing privately owned, Canadian-controlled businesses to immediately expense up to $1.5 million of growth-enhancing investments, including in areas like software, patents, and machinery.

• Reform economic immigration programs to expand pathways to Permanent Residence for temporary foreign workers and former international students through the Express Entry points system.

Innovation and Research

• Reform the Scientific Research and Experimental Development Program to reduce red tape and the need for consultants, better align eligible expenses to today’s innovation and R&D and make the program more generous for those companies who take the biggest risks, promoting productivity, new inventions, and the creation of good jobs. • Establish a Canada Advanced Research Projects Agency (CARPA) as a public-private bridge for research that helps develop and maintain Canadian-led technology. Open Banking and Payments • Move forward with a made-in-Canada model of open banking that will launch no later than the beginning of 2023. This system will ensure that you, not your bank, control your data.

• Modernize Canada’s payments technology to deliver faster and lower cost options so that you can securely and conveniently manage money, pay bills, and transfer funds to loved ones around the world.

Climate Change

• Deliver on all policy and fiscal measures outlined in our Strengthened Climate Plan from December 2020, implement the recently passed Net Zero Emissions Accountability Act, and advance new measures to achieve an ambitious 40-45% reduction in emissions by 2030 compared to 2005 levels. • Move forward, in collaboration with key trading partners, like the United States and European Union, on applying Border Carbon Adjustments to imports from countries that aren’t doing their part to reduce carbon pollution and fight climate change. This includes considering applying Border Carbon Adjustments on imports of steel, cement, aluminum, and other emissions-intensive industries, similar to the European Union’s approach.

Food Policy

• Introduce new restrictions on the commercial marketing of food and beverages to children and establish new front-of-package labelling to promote healthy food choices.

• Create a new No-Waste Food Fund to help build a circular food economy in Canada where no food is wasted, from farm to table. The fund will help all players along the food supply chain to commercialize and adopt ways to eliminate, reduce, or repurpose food waste. International Trade

• Introduce legislation to eradicate forced labour from Canadian supply chains and ensure Canadian businesses that operate abroad are not contributing to human rights abuses.

National Defence

• Work with the United States to modernize NORAD, including by upgrading the North Warning System, deploying new technological solutions to improve surveillance and monitoring, improving command and control systems, and investing in the infrastructure and capabilities necessary to deter and defeat threats to North America.

Veterans

• Launch Canada’s first National Veteran Employment Strategy, with a goal of ensuring that every Veteran can find meaningful work after releasing from the Canadian Armed Forces. A part of this strategy will include improving qualification recognition so that certifications earned while in service can be used in civilian life.

In addition to these new policies, it should be noted that the Liberals still have to implement a series of policies announced in Budget 2021. Finance Canada launched a number of consultations days before the election, including on proposed luxury and vacant home taxes as well as changes to Canada’s trade remedy system. These consultations will end in a few days,, the new Trudeau government wanting to introduce these measures at the earliest convenience.