Ten Political Predictions for 2025

1. Poilievre Will Kill the Capital Gains Tax

The Liberals’ least-loved policy is the change to how capital gains are taxed: under the new rules, two-thirds of any individual’s gains over $250,000 annually will be taxed, compared to the previous rate of one-half. Bay Streeters were apoplectic at the news, along with startup founders, business owners and physicians, many of whom bill provincial governments through private corporations. Poilievre voted against the hike and, in all likelihood, will kill it if he enters the PMO. In a 15-minute video about the economy, he predicted that the tax will cause businesses, jobs and family doctors to leave the country.

2. Trump’s Presidency Will Wreak Economic Havoc

When Donald Trump re-won the American presidency, Canadian economists all sounded the same alarm: tariffs, tariffs, tariffs. Trump has vowed to impose levies of up to 25 per cent on all imports that come into the U.S., a plan that could cost the Canadian economy billions. The Liberal government has played it cool, claiming that it’s dealt with Trump before and can do so again—one of the first things Justin Trudeau did after the Donald’s latest victory was re-form a cabinet committee devoted to Canada-U.S. relations.

3. The $10-a-Day Childcare Program Will Enter the Home Stretch

Several provinces—including Saskatchewan, Quebec, Manitoba, and Newfoundland and Labrador—have already reached the federal government’s goal of capping daycare costs at $10 a day. As Ontario aims to meet that target, it’s changing how it funds childcare—something providers have long been championing. Until now, the government reimbursed daycares for revenue lost. The new system, which comes into effect on January 1, takes into account the cost of providing care, based on factors such as the daycare’s region, the number of spaces it offers and the age groups it serves. As an added incentive, the Ford government says it will no longer fund any daycares that don’t opt into the $10-a-day program.

4. Canada Will Host the G7

It’s Canada’s turn to host the G7 summit, which will take place in June in Kananaskis, Alberta—the site of the 2002 G8 summit. Justin Trudeau hasn’t announced the agenda of the summit (and who knows if he’ll be in office at that point) but experts believe the gathering will focus largely on the risks and rewards of AI. Canada is already a leader in AI research, and the summit is an opportunity to flex its muscle on the world stage, pioneering a new global framework for widespread adoption, regulation and risk management.

5. Canadians Will Be Orphaned by Political Polarization

Polarization isn’t just a problem in the States. According to a recent Angus Reid poll, half of respondents feel that the Conservatives have shifted to the right in recent years, while a similar number say the Liberals have moved to the left. Around a third identify as political orphans—moderate voters who believe the two major parties are too radical in their views and crave a more centrist solution. This problem will only get worse in the coming year: federal elections have a way of pushing parties to their natural extremes.

6. Canada Will Battle Foreign Interference

According to CSIS, Chinese officials and their proxies have (unsuccessfully) attempted to influence the last two Canadian federal elections. As a result, the feds have enlisted Quebec judge Marie-Josée Hogue to conduct a public inquiry. Her findings are expected in January of 2025, and experts hope to see a toothier enforcement plan than the Liberals’ current legislation, which has been slammed as the “bare minimum.” One theme that keeps coming up is transparency: so far, public awareness of foreign interference has been filtered through media reports and intelligence leaks. One federal lawyer has called for full transparency with appropriate safeguards, while Trudeau has argued that all party leaders should be briefed on interference.

7. Trudeau Will Face Even More Pressure to Resign

Justin Trudeau is hanging on to his job for dear life: a September poll found his approval rating had plummeted to a dismal 33 per cent. The supply and confidence deal the Liberals struck with the NDP to stay in power fell apart the same month. And in October, the party lost a crucial by-election in Montreal for a seat they’d held for almost a decade. Despite external and internal pressure—several Liberal MPs have urged him to pull a Biden—Trudeau is refusing to step down as leader. If (and likely when) he loses the election, he might have no choice.

8. The Liberals Will Try to Win Back the Youth Vote

Wages are stagnating, housing prices are wildly out of reach and chicken breasts sell for $40 in the grocery store. It’s no wonder Gen Z and millennial voters have lost faith in the Liberals: in a recent poll, a third of zoomers and 41 per cent of millennials said they’d vote Conservative if an election was held tomorrow. Younger Canadians tend to vote based on issues rather than party allegiance, and Justin Trudeau is trying to win them back with concrete promises on the stuff that matters to them, like $8.5 billion to boost the housing supply and $1 billion for grants and interest-free student loans. He and his staffers are also popping up on podcasts, YouTube and TikTok—a social media offensive that will surely ramp up during election season.

9. Canada Will Push for Arctic Sovereignty

The Arctic is the next great geopolitical frontier: the ice is declining by 13 per cent each decade, and Russia and China are stepping into the newly traversable region with enormous military and technological investments. To stake its own claim, Canada has promised to up its defence spending by $8.1 billion over the next five years. Much of that money will go due north, with a new satellite ground station, early-warning aircraft, and maritime sensors for surveillance. Canada has also teamed up with the U.S. and Finland to build a new fleet of seven polar icebreakers in Quebec, though they have a lot of catching up to do: Russia has 40 of them.

10. Immigration Will Slow Down

In 2023, the Trudeau Liberals announced record immigration goals of some 1.5 million new Canadians by 2026. Two years, one housing crisis and a massive backlash later, the government has done a hairpin turn on immigration, reducing its targets for new permanent residents by 21 per cent. The Liberals hope that the revised numbers will help lower unemployment and ease housing affordability, though some economists predict that the rapid deceleration could slow productivity, diminish the tax base and damage Canada’s overall GDP.