Canada Facing a Higher Degree of Policy Uncertainty

The federal-provincial political harmony which characterized the first year of the Trudeau administration appears to be coming to an end, and as a result, policy changes are likely looming.

In truth, such an alignment is uncommon. Canadian voters are moving back toward a reversion to the norm: a balanced split between the political parties.

Policy consequences may be significant. The political consensus that allowed for a rare moment of federal-provincial harmony on the Canada pension plan expansion in the summer of 2016 has evaporated. Doug Ford, the populist incoming Premier for Ontario, and probably the second most powerful political figure in the country, is busy reversing many of the headline policies of his predecessor even before he becomes premier at the end of June.

Ontario is cancelling its cap-and-trade system and preparing an adversarial stance against Ottawa on carbon taxes. It is eliminating the long-standing rebates on electric vehicles that have helped the province become one of the country’s leading jurisdictions for EV demand in Canada.

Ontario also indicated it will press ahead with the Progressive Conservative party’s campaign promise to shave 10 cents per liter off the price at the pump. Those opposing the price cut claim that It will adversely affect the province’s finances and will have to be recouped elsewhere.

Businesses, organizations, and the fleet managers that work for them might need to adjust to a higher degree of policy uncertainty, and that’s just from dynamics north of the border.