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After a closely watched election, Canadians voted in favour of the Liberals, awarding the incumbent party with 157 seats in the House of Commons, 13 seats shy of a majority government.
The Conservatives, in second place with 121 seats, clinched the popular vote with 34%. This marks the first popular vote and seat split in 40 years. Ironically, that time, Pierre Trudeau's Liberals won the popular vote by 500,000 votes, even though the Conservatives won 22 more seats.
Rounding out the results, the Bloc Québécois, New Democratic Party (NDP), and Green parties were awarded 32, 24, and three seats, respectively.
Canada appears to be a deeply divided nation. While Western Canada swayed blue (more so than the last election), Central Canada and Eastern Canada ran red. This raises a few important questions.
What does a minority government mean for Canada?
Passing legislation can be tricky in a minority government. You need the opposing party on your side. And the numbers are too tight to be favourable. This is why minority governments may not last long. This minority government could be in power for two more years given the seat count.
That being said, the Liberals have a challenge on their hands. Without a majority mandate (and an unlikely formal coalition), they will likely have to garner heavy support for their policies, while managing competing interests across the country.
…And the economy?
As part of their platform, the Liberals pledged to increase the government deficit to $27.4 billion next year to fund new campaign promises.
Generally, when a government runs a deficit, more money is spent on the economy than is pulled out of the economy. This may create growth in the short-term. Overall, Canadians are likely looking at a higher government debt load and more economic stimulus.
TD Economics expects a growth of approximately 1.5% for the Canadian economy next year, as well as one-tenth or two-tenths of a point in 2021.
…And the housing market?
The Canadian housing market will likely remain a giant. If anything, Liberal campaign promises may heighten that giant, particularly in the largest markets (Vancouver, Toronto and Victoria).
First-time home buyers will likely continue to reap the benefits. Expanded initiatives may allow for more leverage and debt on home purchases up to $750,000. This may create more demand at a time when the housing market remains on the upswing.
TD Economics expects their housing market forecasts will increase by 1% to 2% in the coming years. This means a moderate gain in prices of approximately 4% nationally — with a potential boost of 5% to 6%.
In other words?
We have another election behind us, positive momentum in the Canadian economy, and a closer look at what it all means here: TD Economics Election Commentary.