2025 has been full of twists and turns, but early signs show some sense of stability
A month since the April 2025 federal election, it seems as though things have finally begun to calm down, a welcome reprieve from the non-stop chaos that dominated the first months of this year.
It was obvious how difficult it was for the Canadian government to negotiate with US President Donald Trump and his tariff policies that seem to change on a dime without a recognized leader. So regardless of the outcome, it was relieving to finally have a leader to take on Trump and the decisions that he has made which make our jobs so much more difficult.
My clients overwhelmingly supported Mark Carney, with some even wishing he was a Conservative. Carney’s intelligence and success in the private sector gave confidence to many of my clients to believe he would be a positive change from Justin Trudeau’s previous government.
But of course, the main reason Canadians voted for Carney was to deal with Trump and his damaging tariffs. Carney’s calm demeanor and evident negotiating skills have given us some hope that he can make progress in solving this trade dispute, which has obviously given us and our investors months of headaches and uncertainty. We’ve never seen this kind of unpredictability come from one person before, and the market reactions have been concerning. Building a portfolio around what Trump will or won’t do is virtually impossible, so we hope to see some stability come from Carney’s appointment.
Seeing Carney at the White House showed us that there could certainly be a softening of relations between Canada and the US, though that still seems long ways away from reality.
While it is natural for us and our clients to focus on Canadian elections, the reality is that we’re more affected by global and US markets. No matter who is leading our country, Canada is going to follow what goes on in the US – that’s how it’s always been.
I’ll never make a portfolio change due to a political party, but there is plenty to look for in party platforms. For example, last year’s capital gains tax – which has now been scrapped – forced us to rethink our clients’ tax strategies. One thing I’m looking at with this new government is the fall of the NDP. In the last Trudeau government, the NDP held a lot of sway, and was able to push the Liberals a further left. But with the NDP only winning seven seats on April 28, there is little chance that they will hold much influence in parliament.
Hopefully Carney can right some of the wrongs from the past decade. Trudeau was far too adversarial with the energy sector and the business community as a whole, creating red tape which slowed so many projects down and scared investors away from our country, which holds such rich potential.
With all this uncertainty, we have been looking at options regarding portfolios. Right now, we’re holding firm, waiting to see if the tariffs are simply being used as a negotiation tactic. We certainly do not want to rush into a decision, as it is difficult to ignore all the US companies like Nvidia or Amazon that have consistently performed. But if Trump’s erratic trade policies continue and more stable opportunities are available elsewhere, we will follow the market as it shifts.
The entire nation has found out the pitfalls that come with relying on one economy, so we as advisors must also remain geographically diversified in our investments. All the confusion and volatility – both domestic and abroad – have been stressful on us and our clients. But thankfully, we have had few clients panicking, as they are able to trust in the plan we have created to overcome the myriad of hurdles markets will always throw at us.
Given Trump’s attitudes towards immigration, I think it’s important for us to show the world what an efficient immigration system can offer a country. We may have slightly lost our way during the Trudeau era, but now is an excellent opportunity to restore the immigration pathways that have served our country and our economy so well.
Ultimately, last month’s election gave us some much-needed calm, even if Trump’s next moves remain unpredictable. Hopefully Carney can eventually smooth out our relationship with our southern neighbours and heal some of the ailments that have been affecting our nation’s economy. That would certainly make our jobs easier.
