(Bloomberg) -- A parliamentary pact that has kept Canadian Prime Minister Justin Trudeau’s Liberal Party in power has fallen apart, increasing the chances that an election will happen soon.
New Democratic Party Leader Jagmeet Singh announced he’s pulling out of a power-sharing deal he signed with Trudeau in 2022, saying the prime minister is “too weak” to stop Conservative Leader Pierre Poilievre from winning the next election, which is currently scheduled for October 2025.
The Liberal-NDP agreement — which committed Singh’s elected party members to supporting the government in key parliamentary votes — had been set to expire next June.
Its demise does not necessarily mean an imminent election. Trudeau will instead have to court one of the three main opposition parties in Parliament on a case-by-case basis to avoid losing a confidence vote in the House of Commons, which would trigger an election.
However, the collapse of the deal puts Trudeau on shakier ground, politically. The Liberals had hoped to benefit from a yearlong runway before an election call, allowing voters to benefit from lower interest rates and cooling inflation.
Rising living costs, in particular for food and housing, have been a problem for Trudeau, who was quick to claim credit after Bank of Canada Governor Tiff Macklem announced a third straight interest rate cut earlier on Wednesday. “This is a strong signal that we’re going in the right direction, and it’s welcome relief for a lot of people looking to buy a home,” the prime minister posted on social media.
Trudeau’s Liberal caucus has 154 of 338 House seats, so it can’t pass laws on its own. The Conservatives are the next largest party with 119.
Bad Polls
The Liberals are hoping to avoid an election right now because they’re far behind the Conservatives. Over the past year, the Liberals have trailed by 15 to 20 percentage points in a number of public opinion surveys — a gap that, if it held through election day, would put Poilievre’s party in office with a majority government for the first time since 2015.
Speaking to reporters after Singh’s announcement, Trudeau said he hoped parliament would continue to function. “An election will come in the coming year, hopefully not until next fall,” Trudeau said. “In the meantime, we’re going to deliver for Canadians.”
But Singh, whose party sits in third place in national surveys, is urging voters to back him as the best alternative to Poilievre.
“The fact is, the Liberals are too weak, too selfish and too beholden to corporate interests to fight for people,” Singh said in a video posted Wednesday. “They cannot stop the Conservatives. But we can.” He’s scheduled to speak to the media Thursday morning in Toronto.
Poilievre, meanwhile, issued a statement that called Singh’s move a “media stunt” and said the NDP should force an election at the first opportunity.
In a press release, Singh’s office said the New Democrats are ready to vote against the Liberals at any time, but did not make specific promises. “The NDP is ready for an election, and voting non-confidence will be on the table with each and every confidence measure.”
The government typically delivers an economic policy statement in November or early December, and an annual budget in March or April. It must be able to pass legislation related to those in the House to stay in government. Three opposition parties have enough seats to help pass bills: the Conservatives, the New Democrats, and the Bloc Quebecois.
‘Cowardly’
A work stoppage by Canada’s two national railways last month created tension between the Liberals and the New Democrats, who are heavily supported by unions. On the first day of a lockout, Trudeau’s labor minister sent the dispute to a labor board to try to force workers back. Singh called the move “cowardly, anti-worker, and proof that he will always cave to corporate greed.”
Under the power-sharing deal, the Liberals pledged to implement certain social programs, such as dental care and pharmaceutical drug coverage. It also included legislation banning federally-regulated workplaces from using replacement workers during strikes.
The major parts of the deal have been acted on, though drug-coverage legislation — which is limited to birth control and diabetes drugs — still has to pass one last vote in parliament.
The arrangement with the NDP added to spending pressure on the government, with the dental-care program alone estimated to cost C$13 billion ($9.6 billion) over the first five years. The government’s fiscal plans forecast a federal deficit of about C$40 billion each year until 2026.
--With assistance from Randy Thanthong-Knight.
(Updates with prime minister’s comments and other new information, beginning in the fifth paragraph.)
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