- On Wednesday, NDP leader Jagmeet Singh announced in a video on X that his party was ending its supply and confidence deal with the Liberals that was signed in 2022
- The NDP’s decision highlights the Conservatives’ hefty lead in the opinion polls and what their policies mean for Canadians
- Read on for a survey of how key Conservative policies could affect Canadian investors
On Wednesday, NDP leader Jagmeet Singh announced in a video on X that his party was ending its supply and confidence deal with the Liberals that was signed in 2022.
The deal, originally slated to end June 2025, allowed the NDP to guarantee that certain policies made their way to Canadians, including dental, pharma care and a ban on replacement workers during strikes, in exchange for supporting the Liberals on strategic elements in their agenda, including budgets.
The breakup means the NDP will now decide whether to support Liberal legislation on a case-by-case basis, creating some distance from Prime Minister Justin Trudeau and his plummeting popularity, and opening the door for a potential non-confidence vote in Parliament later this month, which would trigger a snap election.
Singh’s video, though centred on the supply and confidence deal, is by and large a campaign ad, throwing his name into the ring alongside current poll leader, the Conservatives’ Pierre Poilievre, and the out-of-favour prime minister, in the hopes of swaying voters away from what Singh describes as their corporate greed and towards the NDP’s focus on workers’ rights, affordability and community.
The most important takeaway from the NDP’s decision, given the Conservatives’ hefty lead in the polls, is that neither it nor the Liberals would benefit from an election anytime soon, creating an incentive for them to continue working together on a piecemeal basis to dim the light shining on Poilievre’s policies and what they mean for Canadians. Here’s a breakdown of five of the Conservatives’ key policy points from an investment perspective.
How would a Conservative government affect Canadian stocks?
- Energy stocks would likely experience upward share-price pressure under a Conservative government because of Poilievre’s strong stance in favour of repealing the Liberals’ federal carbon tax – essentially a fuel levy on consumers – leading to lower prices at the pump and enhanced revenue generation from Canada’s second-largest public sector at a more than 17 per cent weighting after financials’ higher than 33 per cent.
- ESG stocks, in turn, would benefit from the tax incentives Poilievre plans to replace the carbon tax with, easing the journey of growth initiatives from conception to the balance sheet.
- REITs and real estate stocks, for their part, are positioned to suffer under a Conservative government, should Poilievre deliver on his promises of accelerated building and tying population growth to housing starts, a move that would lessen housing demand and encourage a drop in shelter costs.
- Military stocks have reasons for optimism, should Poilievre prevail, with increased military spending set to foster opportunities for public operators in the space.
- Finally, the Canadian market as a whole is poised to the upside under the Conservatives thanks to Poilievre’s stance against raising the capital gains tax, which he says will “drive billions of dollars of machines, technology, business and paycheques out of our country” towards more shareholder value-accretive markets.
Parting proviso
Before you invest based on actionable signals derived from this article, make sure to run any thesis through your personal due diligence process to ensure it aligns with your financial goals, risk tolerance and current financial situation.
While political sentiment can make for an exciting short-term trade, allocating your money in this way entails considerably higher risk compared with sitting back and letting long-term compound interest work its magic.
What other sectors of the Canadian market deserve a mention? Have you changed your portfolio allocation based on the Canadian political landscape?
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(Top image, generated by AI: Adobe Stock)
