It is said that history does not repeat itself, but it often rhymes. With the looming shadow of another Trump presidency, Canada finds itself at an inflection point. The upcoming federal election, once expected to be a routine battle of party politics, has now been transformed into a high-stakes referendum on Canada’s economic sovereignty, its place in the world, and the leadership required to navigate the coming storm.
Two political strategists—Kory Teneycke, former director of communications to Prime Minister Stephen Harper, and David Herle, former top advisor to Prime Minister Paul Martin—recently sat down with Fidelity Investments’ Pamela Ritchie on FidelityConnects1 to unpack the unprecedented dynamics of this election cycle. Their analysis is as candid as it is chilling.
The Elephant in the Room
“The Trump tariffs swept the table clean of every other issue,” Teneycke bluntly noted. “It became the centerpiece. Affordability was on the table, a bit, but kind of in relationship to the Trump tariffs and the amount of economic disruption that potentially would hold for the Ontario economy and Canadian economy.”
Trump’s economic belligerence isn’t theoretical—it’s already begun. A wave of tariffs, including a 50% levy on Canadian steel and uranium, has been unleashed under the flimsy pretense of national security concerns. The result? An existential economic threat that has forced Canada’s political class into uncharted territory.
Herle put it even more starkly: “Canadian people believe that Canada is existentially threatened and challenged right now. It has created a wave of nationalism like I have never seen before.” In a dramatic twist, this surge in nationalistic sentiment isn’t just sweeping English Canada—it’s also gripping Quebec, traditionally more reserved in its federalist enthusiasm.
Mark Carney: The Unexpected Front-Runner
The tectonic shifts triggered by Trump’s trade war have done more than reshuffle economic priorities—they have upended political calculations. The election was supposed to be Pierre Poilievre’s to lose, with the Tories’ relentless attack campaign having rendered Justin Trudeau politically radioactive. Instead, the Liberals pivoted, installing Mark Carney—a former central banker with deep international connections—as their new leader.
“The Conservatives appear to be struggling with that reality a little bit,” Herle observed. “They continue to want the election to be about the things it was going to be about before Mister Trump arrived—getting rid of a long-term government and getting rid of things like the carbon tax.”
The problem? That’s not what voters are concerned about anymore.
“This is really the key,” Teneycke explained. “No one is going to get a deal with Trump. That is increasingly obvious… the objective is not to negotiate for a revised USMCA agreement. It’s 51st state thinking. It is constant disruption in terms of what the investment environment will look like north of the border.”
Poilievre’s Dilemma: A Populist in the Wrong Populist Moment
Poilievre built his brand as a disruptor, a man intent on dismantling institutions, slashing government programs, and cutting taxes. That message resonated when Canadians felt government incompetence was their biggest problem. Now, with Trump threatening to wreck Canada’s economic foundation, Poilievre’s positioning is suddenly out of step.
As Herle succinctly put it: “We now have the ultimate disruptor in Trump. And Canadians have decided he’s a threat, a real threat existentially to the country. So they’re not looking for a Canadian prime minister to come in and break things.”
To make matters worse, Poilievre’s instincts to attack and smear his opponents may be playing against him. Teneycke cautioned: “It’s hard to be likable when you’re saying really negative things all the time… Some of that can look very Trumpian.” With Carney positioning himself as a steady hand in a crisis, Poilievre must find a way to convince Canadians that he can protect them from Trump—without looking like Trump in the process.
Economic Warfare: The Policy Battlefield
The battle for Canada’s economic future is taking shape. Carney has promised a middle-class tax cut and a new fiscal framework that distinguishes between operational spending and long-term investments. His government will also redirect revenue from retaliatory tariffs to directly support affected industries and workers.
Meanwhile, Poilievre has yet to articulate a coherent response. His populist agenda—rooted in tearing down Liberal policies—suddenly looks aimless without Trudeau as the foil. Worse, he faces a precarious balancing act: how to maintain support in Conservative strongholds like Alberta and Saskatchewan, which are uniquely vulnerable to Trump’s economic squeeze.
Herle outlined the stakes: “The tariffs on energy and potash are only 10%, compared to 25% on everything else. What does that tell us? That means we should be raising the price of those commodities until Trump and his constituents feel the pain. But that will be vigorously opposed by the premiers of those two provinces.”
In contrast, Teneycke warned that any aggressive moves by Carney could spark a Confederation crisis. “Any action on those kinds of areas by a Carney government could look a lot like a new National Energy Program. It could be something that literally tears the country in half.”
The Death of NATO and the Rebirth of Canadian Defense?
As if the economic threats weren’t enough, Canada is also facing a geopolitical reckoning. Trump has made clear that NATO is effectively dead in his eyes, and his foreign policy is defined by transactional bullying. Canada, once accustomed to outsourcing its defense to American protection, is now confronting the uncomfortable reality that it may need to fend for itself.
“NATO, for all intents and purposes, is dead,” Teneycke declared. “An alliance is not just a paper document—it’s predicated on a shared belief that if you’re called upon to defend one of the member countries, you’ll actually show up. We’ve kind of seen the opposite signals.”
Herle agreed but raised an additional complication: “There is significant resistance to investing all of that defense money in American technology and in American defense contractors. In fact, there’s a sense that given the approach The United States is taking to us, we should buy that equipment elsewhere.”
The New Cold War: Canada’s Choice Between America and China
Perhaps the most stunning irony of Trump’s economic assault is that it could drive Canada into a closer economic relationship with China—precisely the outcome Washington has long sought to avoid. If America refuses to be a reliable trade partner, where else can Canada turn?
“What they are ultimately doing is they’re pushing Canada and Europe into a position where they must do more with China to protect themselves from America,” Teneycke warned. “It is the exact opposite of what is in the U.S. national interest.”
Herle took the argument one step further: “If Trump destroys our auto industry, which he’s promising to do… why wouldn’t we buy Chinese cars?”
The Most Unpredictable Election in Modern History
Canadian elections are typically predictable affairs, fought over tax policy, healthcare, and governance. This one is different. The stakes are existential. A battle once expected to be fought over carbon taxes and affordability is now about something much larger: Canada’s survival as an independent economic power.
One thing is clear: the rules of engagement have changed. Canadians will soon choose between two vastly different visions of leadership, both shaped by forces far beyond our borders. The question remains—who will they trust to lead them through the storm?
Footnote:
1 "New political leadership and policy direction in Canada – David Herle and Kory Teneycke | FidelityConnects." 16 Mar. 2025, fidelitycanada.podbean.com/e/new-political-leadership-and-policy-direction-in-canada-%e2%80%93-david-herle-and-kory-teneycke.
