Trudeau resigns, creating uncertainty over Canadian election

Posted: January 6, 2025, 10:40 am.

Last updated: January 6, 2025, 01:55 pm.

Justin Trudeau has announced he is stepping down as Prime Minister of Canada, a move that sets in motion a whirlwind of activity on Canada's political front in 2025. And the betting markets are taking notice.

trump effect

Trudeau's announcement Monday morning is the latest episode in the political turmoil sparked by the resignation of Trudeau's Finance Minister Chrystia Freeland just before Christmas, partly due to a public dispute between Trudeau and Freeland about the Liberal government's economic policies. .

In particular, there was reportedly disagreement over how to handle the 25% tariff threats made by incoming US President Donald Trump, primarily around Trump's dissatisfaction with how seriously Canadians take border security.

Minority government hanging by a thread

Freeland said in his resignation announcement posted on December 16:

Upon reflection, I have concluded that the only honest and feasible course of action for me is to resign from the Cabinet. To be effective, a minister must speak on behalf of the Prime Minister and with his full confidence. In making your decision, you made it clear that I no longer enjoy that confidence and the authority that comes with it.”

“For the past several weeks, you (Trudeau) and I have been at odds about the best path forward for Canada,” Freeland said. Our country is facing a serious challenge today. In the United States the incoming administration is pursuing a policy of aggressive economic nationalism, including the threat of 25 percent tariffs.

Trudeau lost in the poll

Trudeau, whose government came to power in 2015, is deeply unpopular among Canadian voters. As of December 24, Angus Reid's “Trudeau Tracker” had an approval rating of 22%. Over the past few weeks, the Ontario, Quebec and Atlantic Canada Liberal caucuses have called on him to resign.

A no-confidence vote that would topple the Liberal government would require the support of the Jagmeet Singh-led New Democratic Party, a party that has been supporting the Liberals through an agreement between those two parties. The spotlight is now on Singh's intentions going forward.

Mark Carney leads the race to replace Trudeau

The spotlight is also on who will replace Trudeau and lead the Liberals into the next election on Oct. 20, 2025. Mark Carney, Freeland, Mélanie Joly (Minister of Foreign Affairs), and Dominic LeBlanc (who replaced Freeland as Minister of Finance) are some of the names being discussed.

Carney, the economist and banker who served as governor of the Bank of England from 2013 to 2020, would be interesting, as he would represent a fresh face from outside Trudeau's inner circle, untainted by the current turmoil.

If Trudeau decides to adjourn Parliament (which is scheduled to reconvene after the Christmas recess on January 27) it would delay any no-confidence vote. Assuming the NDP will join the Conservatives in a no-confidence vote after introducing a new legislative agenda under new Liberal leadership, that would lead Canada to a summer national vote.

Betting market

Trudeau's announcement had an immediate impact on prediction markets, including PolyMarket, which posted the following on Monday morning:

• Elections in Canada by April? (61% chance this will happen, $129,204 volume)
• The next Prime Minister of Canada (91% chance it will be Poilievre, 6% Freeland, at $283K volume)
• Trudeau's no-confidence motion passed in 2024? (1% chance it will be, $415,884 volume)

BetMGM has the Conservatives firmly established as the betting favorites at -2000 vs the Liberals at +900. And FanDuel was out in force with a new betting market: “What day will the 45th Canadian federal election be held on?” winter (before or during February 2025) is +380; Spring (March–May 2025) is -260, summer (June–September 2025) is +200; Fall (September – October 19, 2025) is +550; The scheduled date (October 20) is +1700.

The prorogation of the Canadian Parliament will also throw the proposed National Advertising Standards Bill for sports betting into doubt.