Canadians woke up Tuesday morning to the country’s first minority government in eight years, prompting questions over how Justin Trudeau’s Liberals might co-operate with political rivals to achieve key objectives.

Read on for what the investment community expects from the incoming government on foreign investment, pipelines, housing, debt and more:

“We need solutions to bring more Canadian products, services and innovation to global markets and be a leader in the global energy transition to a low carbon future.  We can do both and Suncor will do its part to work collaboratively with governments and other elected officials, stakeholders and indigenous communities across this country to progress this work.”

-Mark Little, president and CEO, Suncor



Trudeau has more incentive now to push hard on TMX: David Dodge

David Dodge, senior advisor at Bennett Jones and former Bank of Canada governor, joins BNN Bloomberg's Catherine Murray for a look at his economic outlook as Canada ushers in a Liberal minority government.

“It’s much tougher now for [Trudeau] with no support in Saskatchewan and Alberta. But perhaps it’s even more important now that he drives hard to deal with TMX, but also to point out that it’s not only our pipeline that’s a problem. It’s too bad that [Endbridge’s] Line 3 and the American lines are held up for similar reasons.”

-David Dodge, senior advisor, Bennett Jones, and former Bank of Canada governor

“The best hope for the single most important issue for energy investors – which is [the Trans Mountain expansion project] – the most likely outcome to get that across the finish line was a strong Liberal minority, and that’s what we got last night. There’s a belief out West, some shared out here, that the Liberals bought the pipeline to kill it. From conversations with various senior Liberal advisors directly, my understanding is that they have the full intention to actually construct it. They recognize the importance, the tax revenue, the royalty revenue for Canadians. So, this belief of Western alienation – although we wake up to a very divided country this morning – I’m more optimistic about [the Trans Mountain expansion] going ahead than I actually would have been under a Conservative minority.”

- Eric Nuttall, partner and senior portfolio manager, Ninepoint Partners

Liberals 'recognize the importance' of building Trans Mountain: NinePoint Partners' Nuttall

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, discusses how a Liberal minority election win impacts the energy sector. Nuttall says he's more optimistic the Trans Mountain Pipeline expansion will go ahead with a Liberal minority government than if the Conservatives had won a minority.


“This program, the shared equities [are worth] $420 million a year for the entire market. This is 0.03 per cent of originations of mortgages. This is not a game-changer by any stretch of the imagination and, therefore, I think that when it comes to housing, the Liberal government will not be able to actually lift the housing market. And, maybe that’s a good thing because you don’t want to stimulate demand too much. The issue is supply. The issue is rental. It’s not really more people buying houses when it’s unaffordable.”

- Benjamin Tal, deputy chief economist, CIBC Capital Markets

Liberals housing market policies are 'peanuts': CIBC's Benjamin Tal

Benjamin Tal, deputy chief economist of CIBC Capital Markets, offers his take on what the results of the federal election will mean for Canada's economy.


Canada’s starting position is a budget which is actually very close to balance, relative to the U.S. which runs a deficit of six per cent-plus of GDP and parts of Europe where deficits run two or three per cent of GDP. From that position Canada can afford a reasonable amount of fiscal slippage before it starts to become an issue for markets.

- Adam Cole, chief currency strategist, RBC Capital Markets

Loonie reaction to election limited: Currency strategist

Adam Cole, chief currency strategist at RBC Capital Markets, says there's not been a lot of currency market reaction to the election of a Liberal minority government. With the Brexit saga dragging on and trade tensions around the world, Cole says the Canadian political scene has a lot competition for making headlines. He says traders are more focused on the Bank of Canada and crude oil prices in trying to determine the direction of the loonie.


“I believe that the sector will continue to underspend. They will continue to conserve capital. They will continue to pay off debt. They will continue to buy back shares because of the current level of undervaluation, which is at a historical low. And, I would assume that the stocks would continue to meander along this bottom and possibly, with tax-loss selling coming in at the end of the year … I think we could probably see some continued weakness in that area.”

- Jim Davidson, former deputy chair, GMP FirstEnergy

Canadian energy will see more mergers and acquisitions post-election: Jim Davidson

Jim Davidson, former deputy chairman of GMP FirstEnergy, offers his take on what the results of the federal election will mean for Canada's oil and gas industry. He says the energy sector will continue to under-spend, conserve capital, pay off debt, and buyback shares, given the "historical" undervaluation of the stocks.


“For those of us who were looking to see some big moves that would be improvements in terms of the environment for business investment, improvements in the war for talent, we’re going to be disappointed. But for those of us who were worried about big steps in the wrong direction … it’s going to be tough for the federal government to move in some of the areas that could be damaging for business because they’re going to face this kind of opposition.”

- Bill Robson, president and CEO, C.D. Howe Institute

Economic and political fallout from the election — part one: Bill Robson

Bill Robson, president and CEO of C.D. Howe Institute, discusses the possible economic implications of the federal election, and what a minority Liberal government means for the economy, taxes, business investment and national unity concerns.


“The (energy) sector deserves a higher discount rate… there’s more uncertainty there and, therefore, we don’t really know what the pathway is for Canada’s energy sector going forward. Personally, I do believe that Trans Mountain will be constructed. I think that there is a pathway to that, but we have to be cognizant that the risks are greater now. That maybe it takes a little bit longer and maybe it doesn’t get constructed, given the political landscape.”

- David Doyle, Canadian market strategist, Macquarie Group

Canada's energy pathway is unclear amid a minority Liberal government: Market strategist

David Doyle, North American economist and Canadian market strategist at Macquarie Group, discusses the sector winners and losers with a minority Liberal government. He highlights the continued pressure that the energy sector may see due to continued pipeline uncertainty.


“Even if you think that there may be, incrementally, more deficits: Here we have a triple-A rated government bond market that has a positive yield, and one that is above one per cent. … We’re not looking at a buyer’s strike on Canadian debt by any stretch.”

- Kurt Reiman, chief investment strategist for Canada, BlackRock

Conversation needs to focus on the future of Canada's economic growth: BlackRock strategist

Kurt Reiman, chief investment strategist for Canada at BlackRock, gives his take on the debt and deficit concerns with the Liberal party's platform and the impact it might have on foreign investment. He says that Canadian debt is tame relative to other countries, though the government should be focusing their attention on bringing new innovation to the Canadian economy.


“I’m not sure anything’s changed overnight. I’m not sure why anybody felt today was the day to buy [SNC-Lavalin] stock. I can give you 20 reasons why the stock should be owned and why it’s cheap. I’m not sure why anybody would wake up this morning and feel the need, other than the fact that perhaps there’s a greater chance we can move forward with a deferred prosecution agreement.”

- David Taylor, president and chief investment officer, Taylor Asset Management
(an SNC-Lavalin shareholder)

The investment implications of a minority Liberal government: David Taylor

David Taylor, president and chief investment officer at Taylor Asset Management, gives Bay Street perspectives on how the Liberal minority government will impact investing implications.