Copy of AFF Sentinel V22 #22-Canada, Economics and Politics
- Steve Dittmer
- Jul 22
- 4 min read
Canadian Elections, Democrat Politics and Data
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 03/23/25
Canada’s new Prime Minister, Mark Carney, has called for national elections April 28th. Carney succeeded Justin Trudeau for leader of Canada’s Liberal Party and became Prime Minister just a few weeks ago. He will run against Conservative Party leader Pierre Poilievre. Trudeau had called Parliament out of session until March 24th but Carney has asked the governor general to dissolve it and call snap elections.
It will be interesting to see how the elections turn out. As if Trudeau wasn’t far left enough, Carney is regarded as even more so. His past positions have been at the Bank of England and the Bank of Canada. He will try to convince Canadian voters that his international experience will help him negotiate and win concessions for Canada with President Trump.
Trudeau’s unpopularity had seemed to boost the chances for Poilievre and the Conservative Party until the tariff threats stirred things up. Canadians have bristled at Trump’s calls for more policing at the border for illegal immigrants and fentanyl. Fentanyl deaths in the U.S. have dropped by 25 percent after tighter controls by Mexico and Canada and Trump’s near shutting of the southern border. Trump has also called for Canada to step up its defense spending.
The tariff fracas has stirred up Canadian patriotism and is regarded as having boosted the Liberals chances of winning control of Parliament again.
Perhaps most polarizing of Trump’s moves has been his calls for Canada to become part of the U.S. No one really knows how serious he might be. And Canadian friends of ours have suggested Canada has enough troubles on its plate that he should think twice. He may not realize that Western Canada and Eastern Canada are like two different countries themselves.
Carney earlier worked at Goldman Sachs but has been involved in UK and Canadian central banks and government finance since 2004. He has also been involved with companies and groups touting so-called renewable energy and supported Canada’s carbon tax.
Carney’s wife is English and is recognized as an international and climate change expert, active in environmental and social justice causes, served in various think tanks and has been involved in politics and researched agricultural economics in Africa.
Poilievre is a Calgary native and his work has touched on economic issues. One biographical note mentioned the influence on his thinking of Milton Friedman’s theories on capitalism. He has campaigned to end Canada’s carbon tax and criticized Canada’s cost of living.
Poilievre has traveled in Canada’s labyrinthine political system so different from America’s for over 20 years, often taking up fights against big government, big spending and lack of transparency. His wife is a native of Venezuela, raised in Montreal and has been involved in government since 2008.
While Canadian ministers have been actively involved in negotiations with U.S. officials, having a newly elected prime minister could certainly help, depending on ministerial changes.
Although cattle markets definitely have psychological components, they are still ruled by supply and demand fundamentals. Stock markets seem to be affected more by investor psychology, or as one veteran put it bluntly, “emotion.”
In casting about for something to worry about, the markets have selected the uncertainty surrounding tariffs as a major worry. Yet the U.S. general economy does not depend on imports or exports to a great extent. Several economists have projected tariffs could cost the economy to the extent of $200-$300 billion. That is out of a $28 trillion GDP. It’s not chicken feed -- if you’ll pardon the expression -- but it’s not going to tank the economy.
Certain specific slices of the economy could feel more pain than others but predicting the behavior of both sides of the equation is not an exact science. Judging by the experience with China tariffs in Trump’s first term, former economic adviser Larry Kudlow noted that most tariffs were shared half and half between the exporter and importer, with margins absorbing costs and not as much being passed on to the consumer. This time it could be between a quarter and a half each.
Trump is banking on the hard necessity of companies needing the U.S. market to temper effects. He concedes that there may be initial pricing adjustments but that there will be long-term benefits to U.S. companies in balancing the overall system. Kudlow also pointed out that reciprocal means that other countries could lower tariffs.
Trump has been offering the carrot of no tariffs, lower taxes and less regulation -- a better business climate -- if companies move production to the U.S. Several companies have already said they will do so, with some $1.4 trillion in pledges made so far.
As for general market sentiment, John Carney of Breitbart Business Digest did some digging into recent poll data. It seems that those with an overwhelming bearish outlook on the economic future are -- not shockingly -- Democrats. Those registered as Republicans are mostly optimistic about the economic future.
Which follows when one thinks about it. The most recent Quinnipiac poll showed for the first time ever that only 40 percent of Democrats approved of their party’s members of Congress handling of their jobs while 49 percent said they did not. If you think the country’s going to hell in a handbasket, it could follow that optimism about the economy would be hard to come by. Tacking farther left than Joe Biden as a political strategy, rioting at universities supporting terrorist causes, watching products from a once-darling high tech company lit up by Molotov cocktails are not signs of logical or happy campers.
Judy Shelton, former Trump economics advisor and Fed governor nominee in 2020, criticized Fed Chairman Jerome Powell’s recent quip that jobs are jobs. In other words, the fact that many of the jobs created during the Biden administration were government or “government-adjacent” jobs instead of private sector jobs didn’t matter to him. We continue to believe that private sector jobs are productive, whereas many government jobs are primarily soaking up tax revenue.
Well, of course, except for data collection, for one. The data in recent days has been encouraging, with factory activity, industrial activity, housing starts, equipment purchases and other measures showing serious signs of life.
Treasury Secretary Scott Bessent has made it clear the administration wants to shift from a government-dominated economy to a strong private-sector economy.
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