Category: Economy

In a recent interview with Financial Post’s Larysa Harapyn, Robert Herjavec, founder of the Herjavec Group, shared his thoughts on capitalism and its enduring success. With the 30th anniversary of the end of the Soviet Union approaching, Herjavec reflected on the superiority of capitalist models.

The Enduring Success of Capitalism

Capitalism has been widely criticized in recent years for its perceived inequalities and excesses. However, Herjavec firmly believes that it remains the most effective economic system to date. "Capitalism is the only model that works," he confidently asserted. When asked why, he explained:

"It’s because capitalism allows individuals and businesses to innovate and create wealth through entrepreneurship. It creates competition, which drives innovation and efficiency. People are rewarded for their hard work and risk-taking, which motivates them to achieve more."

The Benefits of Capitalism

Herjavec highlighted several key benefits that have contributed to the enduring success of capitalism:

• Innovation: The freedom to innovate and create new products and services has driven economic growth and improved living standards.
• Competition: Competition among businesses leads to better products, lower prices, and increased efficiency.
• Entrepreneurship: Capitalism allows individuals to start their own businesses, creating jobs and opportunities for others.
• Personal Freedom: People are free to pursue their passions and interests, leading to a more fulfilling life.

The Alternative: Socialism

Herjavec also discussed the limitations of socialist models. While socialism aims to promote equality by redistributing wealth, it often fails to achieve its goals:

"Socialist systems can be great in theory, but they’re difficult to implement in practice. They often lead to inefficiencies and lack of innovation. People are less motivated when they know that their hard work won’t be rewarded."

The Example of the Soviet Union

Herjavec pointed out that the collapse of the Soviet Union was a stark reminder of the limitations of socialist systems:

"When I look back at the Soviet Union, it’s clear that their socialist model failed to deliver. It created a lack of innovation, inefficiencies, and ultimately led to its downfall."

Conclusion

In conclusion, Robert Herjavec firmly believes that capitalism is the only economic system that has proven itself to be effective in driving growth and prosperity. While there are challenges associated with capitalism, such as inequality and market failures, they can be addressed through regulations and social safety nets.

Herjavec’s insights offer valuable lessons for policymakers and business leaders:

• Promote Innovation: Encourage entrepreneurship and innovation by providing a favorable business environment.
• Foster Competition: Encourage competition among businesses to drive efficiency and lower prices.
• Address Inequality: Implement policies that address income inequality, such as progressive taxation and social welfare programs.

About Robert Herjavec

Robert Herjavec is the founder of the Herjavec Group, a leading cybersecurity firm. He is also a well-known business personality, having appeared on Shark Tank and other TV shows. With his extensive experience in entrepreneurship and business leadership, Herjavec offers valuable insights into the world of capitalism.

Sources

• Financial Post
• Larysa Harapyn
• Robert Herjavec

Background and Context

The United Kingdom has taken a significant step in its efforts to target Russian oligarchs with ties to the Kremlin, freezing an estimated £10 billion in assets held by two longstanding business associates of Roman Abramovich. This move brings the total number of oligarchs, family members, and associates with ties to Russia on the U.K. list to 106.

Key Players

The sanctions are directed towards Eugene Tenenbaum and David Davidovich, both of whom have been associated with Abramovich for several years. Tenenbaum has been a director at Chelsea Football Club since 2003, when Abramovich purchased the Premier League club. A biography on Chelsea’s website describes Tenenbaum as one of Abramovich’s "closest associates."

Asset Freeze and Sanctions

The £10 billion asset freeze is higher than several leading estimates of Abramovich’s total net worth, with Forbes putting it at US$8.2 billion. This significant action indicates the extent to which Abramovich has invested in the U.K., earning the city its nickname "Londongrad" for its welcoming stance towards Russian oligarchs in the early 2000s.

Response and Impact

The sanctions come on the same day that bidders vying to buy Chelsea are due to submit their revised offers, with a series of North American billionaires competing for a club Abramovich bankrolled for the last two decades. London stock exchange filings revealed that Abramovich had transferred entities holding investments in U.K.-listed companies to both Davidovich and Tenenbaum following the invasion of Ukraine.

Quotes from Officials

"We are tightening the ratchet on Putin’s war machine and targeting the circle of people closest to the Kremlin," said Liz Truss, the U.K. Foreign Secretary. "We will keep going with sanctions until Putin fails in Ukraine. Nothing and no one is off the table."

Background on Abramovich and Sibneft

Abramovich sold Sibneft, the oil company he founded, to the Russian state in 2005 for a staggering US$13 billion. This deal cemented his fortune and solidified his position as a key player in Russia’s energy sector.

Additional Context and Connections

Davidovich now controls Norma Investments in the British Virgin Islands, one of Abramovich’s main investment vehicles. The name is an anagram of Roman, reflecting the close ties between the two individuals.

The sanctions on Tenenbaum and Davidovich mark a significant escalation in the U.K.’s efforts to target Russian oligarchs with ties to the Kremlin. This move sends a clear message that no one will be spared from accountability for their role in supporting Putin’s actions in Ukraine.

Timeline of Events

• 2003: Abramovich purchases Chelsea Football Club, and Tenenbaum becomes a director.
• 2005: Abramovich sells Sibneft to the Russian state for US$13 billion.
• Invasion of Ukraine: Abramovich transfers entities holding investments in U.K.-listed companies to both Davidovich and Tenenbaum.

Conclusion

The £10 billion asset freeze is a significant step in the U.K.’s efforts to target Russian oligarchs with ties to the Kremlin. This move reflects the growing international pressure on Russia to cease its actions in Ukraine and sends a clear message that accountability will be pursued for those supporting Putin’s regime.

Introduction

The year ahead for Canadian employees has been foretold by a front-page article on December 31 in the Wall Street Journal, discussing the massive downsizing of middle management. This trend is not limited to the United States; Canada is also expected to experience significant layoffs in this sector.

The Drivers Behind the Cull

Several factors have contributed to the elimination of many employees occupying positions between front-line workers and the executive team:

• Drive for greater efficiency: Companies are seeking ways to streamline their operations, eliminate unnecessary roles, and reduce costs.
• Higher profits: Employers are prioritizing profit margins over employee numbers, leading to a reduction in middle management positions.
• Increased international competition: Globalization has created intense competition among companies, forcing them to adapt and become more efficient to remain competitive.
• Impact of artificial intelligence: The increasing use of AI is automating many tasks, making some jobs redundant.

The Reality for Canadian Employers

Canadian employers face an even more challenging situation than their U.S. counterparts due to:

• Declining productivity: Under the Liberal government, Canada’s productivity has decreased, exacerbating the gap with the United States.
• Higher taxes: Taxation is a significant burden on businesses in Canada, making it difficult for them to remain competitive.
• Reduced foreign investment: The Trump government’s emphasis on reshoring has led to reduced foreign investment in Canada.

The Consequences of Downsizing

Downsizing middle management will have far-reaching consequences:

• Fewer comparable positions available: With fewer management roles, laid-off employees will face significant challenges finding new employment.
• Greater severance pay: To compensate for the loss of employment, companies may need to provide larger severance packages, further straining their finances.

The Future Outlook

It is essential for employers to anticipate and prepare for this trend:

• Develop a strategic plan: Companies should focus on developing skills and strategies to remain competitive in a rapidly changing market.
• Emphasize employee development: Investing in employee training and development can help ensure that staff are equipped to adapt to new roles and responsibilities.

Conclusion

The middle management cull is a reality that Canadian employers must face. By understanding the drivers behind this trend and developing strategies to mitigate its impact, companies can position themselves for success in an increasingly competitive market.

Trudeau’s Future Tied to Vote in Wealthy Toronto Neighborhood

The outcome of the upcoming byelection in a wealthy Toronto neighborhood is being closely watched as a potential harbinger for Prime Minister Justin Trudeau’s future. The riding, known for its liberal leanings, has been a stronghold for the Liberal Party since the 1990s.

Conservative Candidate Poilievre Seeks Victory

Don Stewart, the Conservative candidate, has been distributing fliers condemning Hamas and supporting Israel’s right to defend itself. If he wins, it would be a significant coup for the Conservatives, who have no seats within the city of Toronto but do have representation in the suburbs.

Liberal Candidate Leslie Church Promises Tough Stance on Hate-Motivated Crimes

Leslie Church, the Liberal hopeful and former Finance Minister Chrystia Freeland’s chief of staff, has promised to crack down on hate-motivated crimes targeting Jewish residents by increasing police presence in the city. "We stand for fighting the wave of antisemitism we’ve seen in our communities," she said.

Jeff Kane: ‘We’re Not for Poilievre, We’re Against the Liberals’

Forest Hill residents Jeff and Betty Kane, who voted for Trudeau when he first entered office, intend to vote for the Conservatives despite being skeptical of Poilievre’s leadership. "We’re not for Poilievre so much as we’re against the Liberals," said Jeff Kane.

Trudeau’s Polling Numbers Remain Poor

Despite his dreadful polling numbers, Trudeau has avoided calls for his resignation from within his party’s caucus. However, if he loses a Liberal stronghold in left-leaning Toronto, there is a risk that private grumblings will break into the open and imperil his grip on power.

Byelections Typically Have Weak Voter Turnout

Some Liberal insiders doubt a loss would be enough to push Trudeau out. Byelections typically have weak voter turnout and can be influenced by events with no bearing on a general election result, they argued.

Area’s Reputation as a Liberal Bastion

The area’s reputation as a Liberal bastion is partly owed to its former representative, Carolyn Bennett, a party stalwart who stepped aside to become Canada’s ambassador to Denmark. Her support ran deep in middle-class neighborhoods like Wychwood and Humewood, while affluent Forest Hill tended to lean right.

Dan Arnold: Voter Motivation Key

The results come down to "whoever’s most motivated to vote," said Dan Arnold, chief strategy officer at Pollara and a former Liberal pollster. The Conservatives are on the rise across Canada, but the Liberals are better at campaigning in progressive Toronto districts, he said.

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In a recent interview with Financial Post’s Larysa Harapyn, Desjardins economist Marc Desormeaux shared his concerns about the looming recession and the state of the economies and budgets of Canada’s provinces.

The Looming Recession

Desormeaux began by discussing the current economic climate in Canada. "We’re heading into a recession in the second half of 2023," he said confidently. When asked what factors contributed to this prediction, Desormeaux pointed out that the global economy is experiencing a slowdown, and Canada’s export-dependent economy is feeling the effects.

Provincial Economies and Budgets

Harapyn then shifted the focus to the provinces, inquiring about their economic situations. Desormeaux explained that while some provinces are better equipped to handle the recession than others, none of them will be entirely immune. "The provinces with the most debt will be hit hardest," he warned.

He went on to analyze each province’s economic situation:

Ontario

"Ontario is facing a significant challenge due to its high debt levels and declining manufacturing sector."

Quebec

"While Quebec has some economic advantages, such as its strong service sector, it too will feel the effects of the recession."

British Columbia

"BC is in a relatively better position than other provinces, but even it will experience some negative impacts from the slowdown in global trade."

Alberta

"Alberta’s energy industry is expected to decline further, making it vulnerable to the economic downturn."

Saskatchewan and Manitoba

"These two prairie provinces are more resilient due to their diversified economies, but they will still face challenges."

Why Canada Needs a Strong Central Bank

Desormeaux emphasized the importance of a strong central bank in navigating an economic recession. "The Bank of Canada must be proactive in setting interest rates and implementing policies to mitigate the effects of the slowdown," he said.

He also highlighted the need for fiscal responsibility at both the federal and provincial levels: "Governments must work together to ensure that their budgets are balanced and that they’re investing wisely in infrastructure and other key areas."

What Can Canadians Expect?

As Canada enters the recession, Desormeaux cautioned that Canadians can expect:

• A decline in consumer spending
• Increased unemployment
• Reduced investment
• Decreased economic growth

However, he also noted that there are steps individuals can take to prepare for and navigate this challenging period:

• Build an emergency fund
• Reduce debt
• Diversify investments
• Stay informed about economic developments

Conclusion

The interview with Desormeaux left little doubt that Canada is indeed heading into a recession in the second half of 2023. While some provinces may be better equipped to handle this challenge than others, all will face significant difficulties. By understanding the factors contributing to this recession and taking proactive steps, Canadians can better prepare themselves for what lies ahead.

Additional Resources

• Federal Budget: Understanding the impact of the federal budget on provincial economies
• Central Bank Policy: How the Bank of Canada’s policies affect Canada’s economic situation
• Provincial Economies: In-depth analysis of each province’s economy and potential recession impacts

Stay informed about the latest developments in Canadian economics by following reputable sources and staying up-to-date with the latest news.

Pierre Poilievre, a prominent Canadian politician and leader of the Conservative Party, has made an energy pitch to former US President Donald Trump. In a bid to address the contentious trade issues between Canada and the United States, Poilievre proposed a "great deal" that would benefit both countries.

The Proposal

Poilievre’s plan focuses on increasing Canadian energy exports to the US, which he believes would not only boost economic growth but also create jobs and reduce American dependence on foreign suppliers. He argued that Canada’s vast natural resources, including oil, gas, and critical minerals, are essential for the US economy.

The Argument

Poilievre emphasized that Canada’s trade surplus with the US is not a problem, but rather an opportunity for both countries to benefit from each other’s strengths. He pointed out that most of Canada’s energy exports go south due to limited alternatives and infrastructure constraints. By ramping up resource extraction and project approvals, Poilievre believes that Canada can become a reliable supplier of energy and critical minerals to the US.

Addressing US Concerns

Poilievre acknowledged Trump’s concerns about trade deficits with China and Mexico, but argued that the situation is different with Canada. He emphasized that the US needs Canadian commodities, which support American jobs downstream in refineries and other industries.

The Keystone Pipeline

Poilievre specifically mentioned the Keystone XL pipeline project, which would transport oil from Alberta’s oilsands to Nebraska. Although President Joe Biden revoked a key permit for the project, Poilievre believes that Trump could revive it and benefit both countries.

Economic Benefits

Poilievre argued that stopping Canada’s trade surplus immediately would lead to job losses in American refineries and higher prices for consumers. Instead, he proposed investing gains from energy exports in Arctic security, border trafficking, and military spending.

Conclusion

In a bid to address the complex trade issues between Canada and the US, Poilievre has made an ambitious proposal that could potentially benefit both countries. By increasing Canadian energy exports and investing in resource extraction, Poilievre believes that he can create jobs, reduce American dependence on foreign suppliers, and strengthen the bilateral relationship.

Recommended Reading

• Pembina completes acquisition of stake in WhiteCap assets: A recent development in the Canadian energy sector.
• New year brings new Alberta electricity ‘rate of last resort’: An update on changes to Alberta’s electricity market.

By understanding Poilievre’s proposal and its potential implications, Canadians can engage in a more informed discussion about the future of Canada-US trade relations.

The article discusses the potential consequences of a trade war between the US and Canada, particularly with regards to energy exports. The main points are:

• Canadian reliance on the US: Over 97% of Canadian crude oil exports go to the US, making Canada more reliant on its southern neighbor than vice versa.
• Potential tariffs: Trump’s proposed tariffs could drive up costs for refiners in the northeastern US and increase electricity costs on both coasts where US consumers rely on imports from Canada.
• Discounts for Canadian crude: If tariffs are imposed, Canadian

As we enter a new year, investors are eager to know what the future holds for their portfolios. In an exclusive interview, Bryant VanCronkhite, Senior Portfolio Manager at Allspring Global Investments, shares his top investment outlooks and biggest market risks for 2025 with Brad Smith on Wealth.

Investor Complacency in 2025: A Growing Concern

According to VanCronkhite, one of the biggest concerns he has for 2025 is investor complacency. He points specifically to the "Magnificent Seven" tech stocks – a group of seven large-cap technology companies that have consistently delivered high returns. While acknowledging their impressive performance, VanCronkhite cautions that investors should be careful not to become too comfortable with these stocks.

The Risk of Overpaying for Growth

VanCronkhite explains that the problem is not with the companies themselves but rather with the market’s multiple valuation. "We don’t want to pay as much of a multiple for companies that are growing slower, which is the Mag Seven, compared to the broader market," he says. To put it simply, investors may be overpaying for growth in these stocks.

Strategic Rotation: A Word of Caution

VanCronkhite advises investors to be strategic when it comes to their investments. "That doesn’t mean sell it; it doesn’t mean leave. Just be careful about staying too long," he tells Yahoo Finance. In other words, investors should consider rotating down from these stocks and rebalancing their portfolios.

Sector Opportunities in 2025

While VanCronkhite warns of risks in certain sectors, he also identifies areas where investors can expect attractive valuations and outperformance in 2025. Two sectors that stand out are materials and healthcare.

Materials: A Sector Worth Watching

VanCronkhite points to the materials sector as one with attractive valuations and potential for growth. "We’re seeing a pickup in demand, particularly in the electric vehicle space," he explains. As a result, companies involved in the production of lithium, cobalt, and other critical metals are poised for significant growth.

Healthcare: A Sector Poised for Outperformance

In addition to materials, VanCronkhite also highlights healthcare as a sector with attractive valuations and potential for outperformance. "We’re seeing a lot of innovation in the biotech space," he says. With new treatments and technologies emerging on an almost daily basis, investors can expect significant growth from companies involved in this sector.

Caution in the Banking Sector

While many markets are optimistic about the banking sector, VanCronkhite cautions against getting too excited. "I would say it’s a bit nerve-racking," he explains. Despite expectations of strong earnings and dividends, investors should be cautious when it comes to this sector.

Conclusion: A Word of Caution for 2025

As we enter 2025, VanCronkhite offers one final word of caution. "Be careful about getting too comfortable with the status quo," he says. With a growing economy and low interest rates, investors may be tempted to take on more risk than they should. However, as VanCronkhite so eloquently puts it, "the market is broadening out right now."

Key Takeaways from the Interview

• Investor complacency in 2025 is a growing concern, particularly regarding the Magnificent Seven tech stocks.
• Investors may be overpaying for growth in these stocks compared to the broader market.
• Strategic rotation and rebalancing portfolios are essential for investors in 2025.
• Materials and healthcare are sectors with attractive valuations and potential for outperformance.
• Caution should be exercised when it comes to the banking sector.

About Bryant VanCronkhite

Bryant VanCronkhite is a Senior Portfolio Manager at Allspring Global Investments. With over 20 years of experience in the financial industry, VanCronkhite has a proven track record of delivering strong returns for his clients. His expertise spans a wide range of sectors and asset classes, making him an invaluable resource for investors looking to navigate the complex world of finance.

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About Angel Smith

Angel Smith is a contributing writer for Wealth. With a background in finance and economics, Smith brings a unique perspective to her writing. Her expertise spans a wide range of topics, including investing, personal finance, and market analysis.

Investors have been rushing into the riskiest corners of the US stock market, giving last year’s laggards a significant boost. This trend is evident in the gains recorded by shares of unprofitable technology companies, distressed corporations, and firms with high short interest.

Most-Shorted Stocks Outperform S&P 500 Index

The Goldman Sachs Group Inc.’s index of non-profitable technology stocks closed up 3.3%, while a Goldman gauge for most-shorted stocks rose as much as 1.8% but closed little changed. Last year, both Goldman indexes – especially the gauge tracking unprofitable tech firms – lagged behind the benchmark.

Market Strategist Weighs in on Risk-On Trade

"This is aggressive risk-on trading," said Michael O’Rourke, chief market strategist at Jonestrading. "I see this as a short-term beginning of the year phenomenon that likely runs out of momentum by the end of the week."

Small-Cap Stocks Lag Behind S&P 500

The bigger appetite for risk, however, did not give as much of a boost to small-cap stocks on Monday, with the Russell 2000 Index lagging behind the S&P 500. The small-cap index fell 0.1%, while the S&P 500 rose 0.6%.

Uncertainties Loom Large Despite Risk-On Trade

The risk-on trade comes at a time when uncertainties are looming large everywhere. There is the possibility that US President-elect Donald Trump will unleash a new wave of tariffs and spark off a trade war with key allies when he takes office later this month. The Federal Reserve’s interest-rate path also remains unclear as inflation has stayed stickier than expected. Meanwhile, worries about the high valuations in technology stocks have started to grow.

Positive News Drives Technology Stocks Higher

Despite those concerns, a slew of positive news on Monday pushed technology stocks higher. First, Nvidia Corp.’s server assembly partner Hon Hai Precision Industry Co. – also known as Foxconn – reported faster-than-expected revenue growth on continuing demand for artificial intelligence infrastructure.

Nvidia’s Partner Reports Strong Revenue Growth

Hon Hai Precision Industry Co., the server assembly partner of Nvidia Corp., reported revenue growth that exceeded expectations, driven by continued demand for artificial intelligence infrastructure. This news is likely to have a positive impact on Nvidia’s shares, as investors expect the company’s Chief Executive Officer Jensen Huang to make significant announcements in the coming days.

Qualcomm Introduces New Chips

Qualcomm Inc. introduced new chips designed to power personal computers capable of running the latest artificial intelligence software yet cost as little as $600. These new chips are likely to be a major boost for Qualcomm’s shares, as they have the potential to revolutionize the way people use artificial intelligence in their daily lives.

Investors Expect Squeeze on Short Sellers

Investors also expect a speech from Nvidia Chief Executive Officer Jensen Huang to move the chipmaker’s shares. "It feels like the Foxconn news, coupled with anticipated announcements from the Consumer Electronic Show, are sparking a bid across the board in technology, causing a lot of short squeezes," said Dave Lutz, equity sales trader and macro strategist at Jonestrading.

What is a Short Squeeze?

A short squeeze occurs when traders who bet against a stock are forced to buy shares back to cover losing positions. Such covering drives share prices even higher, creating a self-reinforcing cycle that can drive stock prices to unsustainable levels.

Market Volatility Ahead?

The risk-on trade and the subsequent gains in technology stocks may be a short-term phenomenon, but it remains to be seen whether this trend will continue or if the market will experience a significant correction. The uncertainties surrounding US President-elect Donald Trump’s policies and the Federal Reserve’s interest-rate path are likely to continue weighing on investors’ minds.

Conclusion

Investors have been rushing into the riskiest corners of the US stock market, giving last year’s laggards a significant boost. While this trend may be short-term, it remains to be seen whether the market will experience a correction or if the gains in technology stocks will continue. One thing is certain – the uncertainty surrounding the market’s direction is likely to continue weighing on investors’ minds.

Additional Reading

• The US’s Worst Fears of Chinese Hacking Are on Display in Guam: Bloomberg Businessweek explores the growing concerns about China’s hacking activities and their impact on global trade.
• Elon Musk Is Not Having a Happy New Year: Bloomberg Businessweek takes a look at Elon Musk’s struggles with his companies, including Tesla and SpaceX.
• Why Everyone’s Obsessed With Meat Sticks and Cottage Cheese: Bloomberg Businessweek examines the growing trend of health-conscious eating and its impact on consumer behavior.
• Zyn’s Online Hype Risks Leading to the Nicotine Pouches’ Downfall: Bloomberg Businessweek investigates the potential risks associated with the rapid growth of Zyn’s nicotine pouches.

Disclaimer

The information provided in this article is for general informational purposes only and should not be considered as investment advice. Readers are advised to consult with a financial advisor before making any investment decisions.

References

• Goldman Sachs Group Inc.: A leading investment bank and financial services company.
• S&P 500 Index: A widely followed stock market index that represents the performance of the top 500 publicly traded companies in the US.
• Russell 2000 Index: A stock market index that tracks the performance of small-cap stocks in the US.

The Holiday Period is Over, but Canadian Politics Remains Gripped by a Single Question: When Will Justin Trudeau Announce His Decision?

As the holiday period comes to an end, Canadian politics is still reeling from the resignation of Chrystia Freeland, Finance Minister and former closest ally of Prime Minister Justin Trudeau. Freeland’s public letter criticizing Trudeau has left many in the Liberal Party questioning his leadership.

Trudeau’s Disappearance from Public View

Since December 16th, when Freeland announced her resignation, Trudeau has largely disappeared from public view. According to a person familiar with his schedule, he spent much of the holidays at a ski resort in western Canada and has no official events or appearances planned by the end of January.

Anxious Liberals Urge Trudeau to Make a Decision

The longer Trudeau waits to address both his party and the country, the more he risks provoking a Liberal rebellion. Nik Nanos, founder of Nanos Research, warns that "time is of the essence." If the current polling numbers hold up in an election, the Liberals would lose most of their 153 seats.

The Risk of Provoking a Liberal Rebellion

Nanos explains that until now, it was primarily Trudeau’s personal brand that was damaged. However, with his continued hesitation to make a decision, he is now risking inflicting damage on the party brand as well. This could lead to a Liberal rebellion, making it even more challenging for the party to smoothly transition to new leadership.

The Challenges of a Leadership Race

A Liberal leadership race may take three months to run, with even longer under different circumstances. Even if the Liberals can avoid a forced election during a leadership contest, the winner would have a relatively short period of time, maybe only weeks, before being thrown into a national campaign.

Continuity in Government

To ensure continuity in government, Trudeau could resign but stay on as Prime Minister while a leadership race takes place. However, "a politically wounded prime minister is not really in a very strong position to negotiate anything with someone like Donald Trump," Nanos notes.

A Difficult Road Ahead for the Liberal Party

Regardless of who becomes the new leader, the party would need a major turnaround in public opinion just to save most of its seats, much less hold onto government. The Liberals’ worst showing in any national election was in 2011, when they won 19% of the popular vote and only 34 seats.

Conclusion

The situation is precarious for Trudeau and the Liberal Party. As Nanos notes, "It very well may be that he will return them to the political wilderness at the end of the next federal election." The party’s survival depends on a swift resolution to the leadership crisis, but it remains uncertain whether this can be achieved.

Recommended Reading

• Dominic LeBlanc’s looming fight as finance minister is far from the biggest of his life
• If Ottawa were a company’s management team, investors would call for a restructuring
• Inside Justin Trudeau’s shocking call with Freeland that sparked Canada’s political crisis

Join the Conversation

What do you think is the best course of action for Trudeau and the Liberal Party? Share your thoughts in the comments below.

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