A federal election is kicking off as Canada faces extreme trade hostility from the U.S. that’s creating worry and uncertainty for businesses and workers.
The situation, coming as the country was already grappling with low productivity and GDP growth, has helped lead to the lowest small business confidence ever measured by the Canadian Federation of Independent Business, while consumer confidence is on the decline.
Given the challenges, recently installed Liberal Leader Mark Carney has said his focus will be the economy while Conservative Leader Pierre Poilievre has also been talking up the importance of economic reform.
Here’s a look at some of the major business issues that could factor in the election.
Taxation
Carney made a big show of ending the consumer carbon tax on his first day in office, something Poilievre had made a central plank of his policy with his “axe the tax” slogan.
But there’s still the question of what happens with the industrial and business side of carbon taxes. Carney has said he plans to shift more of the burden to industry to make up for ending the consumer tax, while Poilievre has called for the scrapping of industrial carbon taxes, too.
The other big tax issue that has riled businesses recently was the proposed increase in the capital gains inclusion rate, but there too Carney has gotten ahead of the extensive criticism the policy has faced. On Friday, Carney announced his government would cancel the change, but the confusion and reputational hit from the policy is likely to linger during the election.
Resources
The trade war with the U.S. has prompted increased talk of needing to diversify Canada’s energy exports from what is our dominant customer. The tariffs have prompted energy executives to call for action on numerous longstanding asks, including change to the Impact Assessment Act and an end to the West Coast tanker ban. Other requests include declaring a Canadian energy crisis and to generally speed up development of key projects they say are in the national interest.
The calls come even as indicators point to an ever-worsening climate picture, including 2024 likely being the first year that was more than 1.5 degrees C above the pre-industrial era, according to the latest report from the World Meteorological Organization. Carney has made addressing climate change a central part of his career in recent years to create a ripe area for debate.
Business groups are also calling for more action to help boost other resource sectors such as mining, forestry and agriculture.
Trade
Removing trade barriers between provinces has seen a heavy focus in recent weeks — and is something the federal government has only limited power to change — but it is still a big challenge that economic experts say Canada as a whole needs to address to help make up for dwindling access to the U.S. market.
Talk of international relations and where trade might go with fast-growing countries like India as well as major established markets like the European Union and China are still being figured out.
Along with the trade deals themselves, there’s also the question of actually getting goods abroad, with some raising the need to increase port export capacity and improve the rail system.
Manufacturing
Much of U.S. President Donald Trump’s trade rhetoric has been about using tariffs to increase a shift back to domestic manufacturing from trading partners. Canada’s auto sector, as well as steel and aluminum production, are especially vulnerable and targeted, with those in the industry calling for government supports for companies and workers.
The impact to manufacturers is still uncertain as the tariff picture keeps evolving, with another round of tariffs expected on April 2, but how the federal government addresses the existential threat is an open question.
The other big area of making things that continues to be a problem is building houses, which is expected to get harder because of increased costs from tariffs. The federal government has limited direct levers to pull, but already Carney has started rolling out some promises like cutting the GST for some buyers on new houses, something Poilievre has already pledged to do.
Lingering issues
While possibly taking a backburner to trade-related issues, there remain important questions about how whichever government is elected will deal with a variety of policies after former prime minister Justin Trudeau’s departure.
These include the long-delayed rollout of an open banking model, the direction of the Competition Bureau and its efforts to address market concentration, the government approach to artificial intelligence, as well as immigration policy and how it factors into economic growth and labour supply.
Other areas to watch will be efforts to increase Indigenous participation in the wider economy, and improving transportation through high-speed rail and air travel improvements.
This report by The Canadian Press was first published March 24, 2025.
