Canada Outlook 2025

Trudeau resigns, or doesn't he? Interest rates, immigration, real estate, economic, & political outlook for Canada in 2025.

Only a few days into the new year it's kicked off with a bang.

Prime Minister Justin Trudeau announced the morning of Monday, January 6 that he "intends" to resign both as Liberal Party leader and Prime Minister, but with some conditions.

While many ran with the sensational headlines "Trudeau Resigns!", the devil is in the details.

Today, we dig into the impact of Trudeau's resignation, and broader 2025 outlook as Canada navigates turbulence in key domains including interest rates, immigration, real estate, economic headwinds, & political governance.

You’ll also find a special Reader Questions section answering, “What will be different under Conservative Pierre Poilievre?” at the end of the post.

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Trudeau’s "Intent" to Resign

On the front steps of his official residence, Trudeau in a long speech announced his "intent" to resign Monday morning.

Canada Twitter had been a buzz in the previous 48 hours as rumors had started that his much anticipated (for months now) resignation had finally arrived.

While the common interpretation is that he issued a mea culpa, took the blame for how his policies have destroyed Canada in under a decade, and as of that afternoon would leave public life forever like President Richard Nixon in his 1974 resignation, the truth is something quite different.

This is not Trudeau's Nixon moment, though Grok AI thinks otherwise.

Trudeau outlined conditions for his intended eventual future resignation.

First, the Liberal Party must choose a new competitive leader after a thorough nationwide search. If the chosen leader is through a closed door coronation or doesn't end up polling well against Conservative Party Leader Pierre Poilievre, then Trudeau still has a possible claim that he should stay on for the next election.

Second, while the Liberal Party kicks off their leadership campaign, Trudaeu has prorogued Parliament by request to the Governor General (the British Monarch’s representative in Canada) until March 24, which means that all regular functions of Parliament will remain in recess, including regular House and Senate review of legislation, question period, and other oversight functions through committee investigations.

Notably, this means that in the heat of the ongoing US tariff negotiations with the incoming Trump administration, there will be no Parliamentary functions or oversight to navigate a better deal. And given how unproductively discussions have been so far, this could have major negative impacts to the Canadian economy and Canadian dollar.

Parliament in practice has already been stalled since October when the Trudeau government refused to hand over documentary evidence on the latest scandal, a $400m environmental investment fund which in practice was a slush fund for Liberal Party preferred companies. Their refusal had further prolonged delivery of the "Fall Economic Update" – finally presented in late December - with the dual shocking news of both a $60 billion deficit and the snap resignation of the Finance Minister, Chrystia Freeland.

Now, with the prorogation in place until March, there will have been effectively a 6 months-long a coup by the PMO (Prime Minister's Office) executive branch against the legislative branch.

As mentioned previously, an election could have been triggered many times in recent weeks or months had any of the other leftist parties decided to side with the Conservative Party in a "non-confidence" vote. Now, no election can be triggered until end of March at the earliest when Parliament is recalled before the fiscal year end March 31 to likely hastily pass continuing resolutions for the coming budget.

Of course, many elected representatives including the leader of the further left party, the New Democratic Party (NDP) under Jagmeet Singh, are not too sad about this course of events, since they can now secure their pensions safely remaining in office through the February deadline, while retaining the fig leaf of blaming the delayed election on Trudeau proroguing Parliament.

New Political Uncertainty

While polls for the past year have increasingly flashed blue, a near guaranteed majority government for the Conservative Party under Pierre Poilievre – whenever the next election finally is called (at latest October 2025), the calculus has now changed.

With Trudeau very likely out as leader of the Liberal Party, the bet will be whether the Liberals under a new leader can rebrand fast enough to peel off some of the many current reluctant Conservative voters and eek out a victory.

Many voters currently polling for the Conservatives put the blame for Canada's current demise rightly at the feet of Trudeau, but would be willing to consider a new candidate leading the Liberals, given the longstanding strong reputation the Liberals have especially among immigrant groups as the party that brought them in to the country.

Canada has for decades had a strong left wing bent to their culture and politics, and this has only increased in recent years as the Canadian public has further been fully absorbed with the drama, rivals, and issues of the American political circus, often tuning in to the late night shows or American cable news shows.

Liberals have in the past successfully painted Conservatives as the Trump MAGA party of the north, as Hitlerian and a threat to our sacred democracy and women's abortion rights as the Republicans – whom Canadians are taught to fear and hate from a young age by state media and schools.

If Liberals can successfully further tar Conservatives with the deportation and perceived anti-immigrant policies of the American MAGA movement, polls could swing quickly back to a tighter race, especially given the fast growing recent immigrant vote.

The Conservatives have successfully peeled off large portions of the immigrant vote from the Greater Toronto Area, who have been economically impacted by Trudeau's disastrous policies, but more critically have been deeply disillusioned with the radical progressive cultural issues which cut against their conservative religious values.

For example, Muslims partnered notably along with culturally conservative citizens from many faiths, in September 2023 and 2024 to protest en masse against the latest push for further sexualization of children in public schools and government support for sex change operations. This was a major wake up call to the Liberals who many assumed had locked down the Muslim vote with their official cabinet position and legislation to combat Islamophobia, and even an official Muslim caucus of elected representatives.

With Trudeau out, much of the Conservative messaging over the past year solely focused on him starts to sound a bit stale, and their strategic reluctance to commit to major drastic policy reforms and plan to coast to victory on anti-Trudeau sentiment may not be a winning strategy anymore.

Liberal Leadership Race

The two front runners for the Liberal Party leadership race are, as mentioned previously, Chrystia Freeland (former deputy Prime Minister and Minister of Finance) and Mark Carney (former Governor of the Bank of Canada & Bank of England, banker at Goldman Sacs & Brookfield Asset Management).

Liberal leadership race frontrunners: Mark Carney & Chrystia Freeland

If I had to place my bets, it would be on Carney, who despite not holding a seat in Parliament, has been courted by the Liberal Party for the position multiple times since 2012, and has been waiting in the wings for the right opportunity. He is a smooth operator who performed competently as head of Canadian and then British central banks, and amidst various roles across banking and international policy.

According to the tin foil hat brigade, he is the puppet for globalist powers who will forcibly launch a Central Bank Digital Currency (CBDC) on the country, inline with similar ongoing efforts worldwide for population control. Given the success of using financial control to squash the populist trucker convoy protests, it’s not hard to believe Trudeau’s successors will be tempted to make control through finances a common tool of governance. And given recent leaks on the extent of Operation Chokepoint in the US, clearly other countries agree with this strategy. But first, Carney would need to win both the leadership race, and then the election.

For the leadership race, the battle lines are already set. Leaks came out that Freeland resigned partially because she was told that Carney would be replacing her on the finance file. While Freeland is now well known across Canada from major front facing roles in the Trudeau administration, being so closely linked may lead to being boxed in like Harris as the status quo candidate. Despite Freeland polling slightly ahead in initial polls, I still give Carney the edge.

While his pristine globalist credentials which offend many on the right, he lacks much of the Trudeau baggage and dislikable personal mannerisms that Freeland is burdened with, and will have a hard time shaking.

Carney likely also will have broader support from business leaders given his better credentials as head of both Canadian and British central banks, which will contrast strongly with Freeland's severely lacking performance while she was Minister of Finance.

Other minor players (former premiers and cabinet ministers) are expected to announce but with current single digit polling numbers I don't think they have much of a shot. While a dark horse could emerge, it'll likely be down to Freeland and Carney.

Once a leader is decided, assuming Trudeau follows through with his "intent" to resign, an election could be called as early as April, or it could be further stalled by opposition parties again failing to vote "non-confidence" or another prorogation of Parliament.

At the latest, an election will happen in October 2025, and if current polls hold even under a new Liberal leader, then the Conservatives under Pierre Poilievre will take the reigns at possibly Canada's most troubled time in a generation.

Right wing Canada? Remember the truckers…

While the trucker freedom convoy in 2022 made international headlines for its peaceful protests against COVID tyranny and subsequent aggressive squashing by a whole of society approach involving government, police, and the banks, it is worth noting that Canadian sentiment was quite split.

Source: BBC

Notably, a strong majority of Canadians in polls at the time and in the months and years past have consistently been against the protests, their motivations, and in favor of the harsh government crackdown which restored a Roman peace to the land.

While a majority of Canadians in polling disapprove of Justin Trudeau, it is important to remember just how lacking the desire for freedom is in most Canadians. Even the robust support for Pierre Poilievre could quickly fade if Canadians are given a non-Trudeau, non-Conservative option.

And notably, Poilievre has shied away from taking hard stances on any of the traditional red meat issues that American readers would expect from a right wing candidate such as immigration, child sex & gender issues, COVID lockdown policy, medical freedom, abortion limits, and others.

It is important to not underestimate just how much Canadians could be swayed by election campaigns which paint the Conservatives as Canada's scary, religious, anti-vax, anti-immigrant Republicans.

Canada lacks a robust right wing, even in name only, and it truly shows in the lack of clarity of position on any key issues from Pierre Poilievre.

Immigration

In a shocking about-face, Trudeau finally capitulated on immigration, posting to YouTube on November 17, 2024 a video entitled "Why Canada’s changing its immigration system".

While he was quick to blame the corporations and community colleges who had only exploited the loop holes he wrote for them, he of course avoided any responsibility for his major departure from previous administrations on immigration policy which has since ravaged the nation.

Despite the deep dive from September and follow up articles, there always seems to be something more to uncover in Canada's immigration catastrophe.

Besides the latest admission of over 5 million temporary status who are officially hoped to self-deport on their own in 2025, and lack of any deportation plan for the over 600k in undocumented illegal aliens, the past few months have been continued gaslighting of claims that all core programs are being reduced, while in reality quotas are simply being shuffled around and migrants acting accordingly.

For example, rather than temporary workers or foreign students applying for permanent residency (PR) which has reduced quotas, migrants are now submitting asylum claims which don't have strict quotas but with a growing backlog will grant them interim housing subsidies as they wait for likely over 3 years for their case to be adjudicated.

And despite further souring of voter sentiment on immigration, the government continues to rollout new programs. The latest one, the "Rural Community Immigration Class (RCIC)", that will offer a fast path to PR if immigrants commit to move to a rural community. The government seems intent to leave no corner of the country without Indians (no, not the Indigenous variety) working all retail and fast food positions, as they already do in major cities.

In other news, the Canada Revenue Agency (CRA) – Canada's tax agency, admitted they waived $2.5 billion in penalties and owed interest by foreign Chinese owners on vacant real estate investments. The CRA gave in after months of protests and lobbying from the Chinese community in Canada, all despite recent hiring in 2023 of an additional 70k workers to root out tax dodging by Canadians. So much for equal treatment under the law.

Neither Conservatives or Liberals have any mass deportation or immigration reduction plans.

The country would have significant relief from excess housing demand or labor supply if all 6 million temporary and illegal immigrants leave by the end of 2025, but that seems increasingly unlikely to happen organically.

Economy

The Bank of Canada has continued to drop interest rates, down from 5% in April 2024 to now 3.25%.

Analysts predict further cuts in 2025 to possibly 2.25% by October 2025, and potentially 1.50% by July 2026.

While obviously much can change in 18 months, the continued economic weakness across GDP growth, unemployment, business investment, productivity, inflation, and a suite of other economic indicators are all signalling that further cuts will be warranted, as Canada definitionally is in an ongoing and deepening recession.

Notably, the Bank of Canada has seemingly decided to sacrifice the Canadian dollar to save the debt laden economy, or more specifically the real estate market.

Interest rate differences with the US Fed, more government debt than the market is interested in, continued money supply over 2x the 2019 baseline, and now the central bank is even committing to purchase half of all 2024 issued mortgage bond securities (a common precursor to a debt or bank crisis).

None of this bodes well for the Canadian dollar, or Canadian economic outlook in general.

Furthermore, negotiations have begun long before Trump's January inauguration with aggressive threats of 25% across the board tariffs looming like a cloud over the US trade dominated Canadian economy. While various provincial premiers (see: state governors) have been sent to Mar-a-lago or CNN to plead the Canadian case following the Trudeau governments now multiple failed and mocked attempts, little is dissuading Trump from pressing on Canada's weakness to extract concessions in border security, trade balance, drug and human trafficking, and other top issues.

Real Estate

Real estate has remained weak, though differentiated by inventory category.

Condos have had significant price cuts, especially in Toronto where new supply comes online every month. Yet, single detached houses have been much more robust with prices mostly flat, especially since home building has ground to a halt in the past year amongst higher rates and continued regulatory burden and development fees from municipalities.

While rates may continue to drop, the broader weakness in the economy and especially rising unemployment will likely put a major damper on the mania which had characterized the market in 2017 and 2021.

Canadian mortgages, notably unavailable in 30 year fixed variety, are continuing to renew at higher rates, with the final low-rate tranche this year rolling over from 2% mortgage rates from 2020 to current mortgage rates still above 4%.

Recent minor reductions in immigration in combination with more condo supply coming online have lessened pressure on rental supply, and rents have been coming down across the country.

If there is mass self-deportation of the over 5 million temporary immigrants, there could be more significant decreases in rents and likely weakness in the housing market to boot, but that is not at all guaranteed.

Canadian families are still in the pinch with significantly higher cost of living in all categories from food to housing, dismal wage growth, and now rising layoffs. That being said, until the core demand and supply mismatch in housing is addressed, it seems more likely than not that prices will stay flat.

A Bleak Outlook for 2025

The bleak conditions and growing uncertainty across political and economic spheres leave little remaining reason for Canadians to be confident or optimistic going into 2025.

In the best case scenario, the Conservatives win and shock everyone with quickly implemented, legitimately bold policy reforms – which they refrained from discussing before the election. They reverse Trudeau's worst policies, mass deport immigrants, clean up crime, build homes, cut taxes, and make Canada a place where best & brightest want to build companies & families again, stemming the brain drain to the United States.

The base case though, as outlined earlier, is one of generally status quo malaise on all fronts, but with a new Prime Minister likely wearing a blue tie who can clip more intelligent sounding sound bites, and dole out a few good but largely inconsequential headlines like axing the carbon tax, to paper over the continued devaluation of the Canadian dollar gradually inflating away the growing debt.

In a very possible alternate scenario, the tie color doesn't even change, and Trudeau is simply hot-swapped for the more articulate and financially literate banker Mark Carney who wins a narrow victory as reluctant Conservative voters switch back to the Liberals to avoid perceived Trumpian chaos floating north.

tl;dr 2025 is shaping up to be another great year to escape Canada.

For Canadians especially, I hope you are making progress on getting your promotions, building wifi-money, and escaping the wage slave crumbling country that you still find yourself in.

If you want to learn more, you've come to the right place. Start here, plan your escape anon.

Reader Questions: What will be different under Conservative Pierre Poilievre?

As one reader asks, "assuming polls hold and Pierre Poilievre becomes Prime Minister sometime in 2025, what will really change?"

This is the question of the year.

Based on the campaign ads and rambunctious Question Period performances you could get the impression that there would be a drastic difference.

But, on the key issues there will be little change, given current public policy platforms and Poilievre’s recent much watched interview on the Dr. Jordan B. Peterson Podcast.

Neither Liberals nor Conservatives have any plans for mass deportations of the now over 5 million legal immigrants on temporary status in the country, let alone over 600k illegal undocumented aliens, let alone concrete commitments to restore immigration to the long term average of 250k/year and only strict high skilled immigration from select countries criteria.

Both have vague plans to try and increase home building as a fix to the ongoing housing crisis from excess demand and flat housing starts. The Liberals have relied on a "Housing Accelerator Fund" which has been a black hole for $ millions with little to show for it. The Conservatives have a likely futile plan to blackmail municipalities with cuts to federal funds unless they reduce "red tape", speed up approvals, and lower development fees which have made home building unprofitable since interest rates rose in 2023.

Both have near identical foreign policy platforms with strong support for ongoing conflict in Israel and Ukraine.

Both have near identical regulatory platforms for agriculture and food marketing boards including continued support for the dairy cartel for example which controls all dairy production through quotas, enforces dumping product, and sets high prices.

While they differ on environmental policy, Liberals with strong support carbon tax – Conservatives planning to repeal on day one, and Conservative support for the oil industry and pipelines to the US and Atlantic refineries, there is less clarity on what differences there would be on some of the regulatory restrictions which have now been in place for years on different industries, and whether Conservatives could actually work with the provinces to get pipelines or natural gas export terminals & infrastructure built.

On tax rates, Liberals had planned an increase on the capital gains inclusion rate but given the latest action to prorogue Parliament, that bill is on ice and won't take effect. Conservatives traditionally have lowered taxes, but with the growing debt, crashing Canadian dollar, and both fiscal & monetary crises, they have very little wiggle room to do much even if they wanted to.

As a relevant example, Premier Doug Ford of Ontario found himself in a similar pickle after taking over in 2018 from decade long incompetent Liberal rule of the province, which also left it saddled with debt, crumbling social systems, and infrastructure. The tax burden hasn't dropped except for a few headline removed fees like annual car license plate stickers.

Lacking an explicit DOGE initiative to slash government headcount, the Conservatives have made vague mention of rolling back the over 40% increase in size of government but not committed to any specific goals, and is also considering a national UBI (universal basic income) program. It seems little will be done to cut out of control spending.

On gender, sexuality, and other culture war issues, despite big talk and innuendos in private audiences, official Conservative policy and voting record have been aligned with all the same radical and unpopular with religious & families policies that the Liberals have supported including sex reassignment surgery for minors, sexualization of minors in public schools, and no limits on abortion.

On COVID, lockdown policy, mandatory vaccines, and the 2022 trucker convoy protest, Conservatives were split and Pierre Poilievre was one of the few who at the time didn't immediately condemn the protest. Yet, Conservatives have been reluctant to push back on any of the COVID tyranny for fear of being portrayed as weak in policy response to crisis, anti-science, or for their own lack of conviction on the issues.

On firearm ownership & self-defence, Liberals have pushed for further and further restrictions on legal gun ownership even for sports or hunting. Conservatives have said they would reverse the recent new restrictions, but have not ever advocated for US 2nd amendment style right to bear arms or right to self-defence castle doctrines, which given rising crime across Canada and long police delays (if they ever come) is offering many Canadians a death sentence if criminals choose their home.

Conservatives are pushing for harsher sentences for crime, in contrast to Liberals catch-and-release and other changes which have ensured repeat criminals can continue re-offending, even if they are not citizens.

On many of the most critical issues to Canada's economy, immigration, social systems, & freedoms, the Liberals and Conservatives are not very far apart.

It doesn't look like it will matter which color of tie is loosened, and sleeves rolled up, when either leader will tour factories and make promises of a Canadian recovery which looks less and less likely.

I would expect similar poor results accordingly, and little change in the incentives which continue to have Canada's best & brightest flee to better opportunities & a better life south of the border.

Of course, there is one party with much bolder policy differences that would set Canada on a different trajectory, but they have no current hope of ever being elected.