TORONTO — Prime Minister Justin Trudeau’s plan to step down has business experts warning about the heightened uncertainty it has created and the need for a unified front to face the challenges ahead.
Trudeau’s announcement that he will resign once a new Liberal leader is chosen comes just weeks before Donald Trump, who has threatened to impose tariffs on Canadian goods, is sworn in as
U.S. president. The decision has ushered in a new wave of uncertainty, said RSM Canada economist Tu Nguyen.
“Canada’s economic policy uncertainty has surged to the highest in decades,” she said in a note.
She said the uncertainty could temporarily deter investment flow into Canada, delaying the business recovery that rate cuts and easing inflation were expected to spur, and weakening Canada’s bargaining position at a time of tariff threats.
The potential economic hit from tariffs has business groups urging unity. There will be limits to what the government can do though, as Trudeau prorogued Parliament until March 24.
But whoever takes over leadership once the dust settles will have limited options because of challenges like low productivity, barriers to lower taxes and poor international business relations, said Andreas Schotter, professor of international business at the Ivey Business School.
He said that while he’s taken issue with many of the Trudeau government’s policies, it’s important to focus on the future and facing the challenges ahead.
Along with navigating the threat of tariffs from Trump, he wants to see new leadership work to improve business policies through reduced regulations and lower taxes, as well as improve relations with other trading partners.
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