- Carney defeated his Conservative opponent, Pierre Poilievre, in a dramatic turnaround after US President Donald Trump’s comments emerged as the biggest influence in this year’s Canadian elections.
- A Liberal victory indicates the continuation of centrist policies and economic reforms already initiated by Carney, including the implementation of various tax reforms.
- Jagmeet Singh’s defeat and the fall of NDP could provide an opportunity to improve diplomatic relations between India and Canada, signalling a change in how issues related to the Khalistani movement are addressed in Canadian politics.
- Carney’s victory could help safeguard Canada’s sovereignty from American pressures while also strengthening partnerships with “like-minded” countries, such as India.
Against American tariff and takeover threats, the Canadian snap federal elections took place on Monday, April 28, 2025. Earlier this year, after the resignation of Prime Minister Justin Trudeau amidst rising food and housing prices, the Canadian Liberal Party picked Mark Carney, a seasoned banker, to lead the country out of its economic crisis. After nearly four months, the people chose him again to steer the country for the next four years. However, this election was not only significant for Canada’s domestic future but also for its international partners, such as India, which have high stakes in the country. In this context, analysing the election results and their impacts on India-Canada ties can shed more light on the matter.
How did Mark Carney win?
Mark Carney’s win is historical as he is the first to become Prime Minister without ever serving in the Canadian Parliament. While counting is still underway, the Liberal Party under Carney has won 168 seats so far, needing only four more seats to secure a majority. Carney has disrupted the two-decade pattern of alternating Conservative and Liberal rule, extending the Liberal reign even after Trudeau’s tumultuous leadership ended in January this year. Carney defeated his Conservative opponent, Pierre Poilievre, in a dramatic turnaround after US President Donald Trump’s comments emerged as the biggest influence in this year’s Canadian elections.
Poilievre’s populist ideology, which focuses on challenging the status quo of Canadian liberal politics and his campaign for tax cuts, reduced bureaucracy, and “common sense” policies, faced significant challenges due to Carney’s crisis leadership during times of economic and political turmoil. Earlier this year, Trump’s announcement of 25% tariffs on Canada and Mexico, along with his threats to turn Canada into the “51st state” of the US, shifted the focus of the Canadian election toward the protection of the country’s sovereignty and economy. As a result, Canadians placed their trust in the experienced banker Carney, who has previously served as the Governor of both the Bank of Canada and the Bank of England.
What does the Liberal victory mean for Canada?
A Liberal victory indicates the continuation of centrist policies and economic reforms already initiated by Carney in the past four months. As he promised during his campaign, the country will implement various tax reforms domestically, including the elimination of the capital gains tax and an increase in the limit for First Home Savings Accounts to benefit the middle-class urban population. Additionally, the consumer carbon tax will be removed and replaced with incentive programs for green investments. The housing sector will also experience reforms, such as the removal of the GST on new homes and government-led housing development initiatives. These measures aim to address the shortcomings criticised in the previous Trudeau government.
On the international front, Carney will need to navigate US-Canada relations carefully. Trump’s complaints focus on several issues, including a trade imbalance resulting in an $11.9 billion US deficit due to the import of Canadian oil, migration concerns, and Canada’s low defence spending. These factors complicate multilateral strategic dealings, such as those within NATO and AUKUS.
To address these challenges, the highly experienced Carney has suggested implementing retaliatory tariffs on American goods. This approach aims to reduce Canada’s reliance on the US by diversifying trade with partners in Europe and Asia. His strategies, coupled with his attitude of dealing with America “only on our [Canada’s] terms”, which have already resonated with the Canadian public during his four-month tenure, are designed to guide Canada out of its sovereignty crisis.
Impact on India-Canada Relations
Apart from the relations with the US, the Canadian elections also have profound impacts on India, which has high stakes in Canada. India-Canada relations, driven by historical diaspora ties, have always been unstable. The thorn in the relations has been the Khalistan movement, a separatist movement abetted by Pakistan targeting the state of Punjab in India. As 2.1% of Canada’s population is Sikh, the country holds the largest Sikh population outside of India, influencing domestic and political discourse between the two countries.
In 2023, allegations made by previous Canadian Prime Minister, Justin Trudeau, on India’s involvement in the killing of Khalistani leader, Hardeep Singh Nijjar led to diplomatic expulsions and a freeze in trade talks. Ever since, the strained bilateral relationship has yet to recover. Against this backdrop, the impact of the Canadian elections on India is driven by two key outcomes. First, the defeat of New Democratic Party (NDP) leader Jagmeet Singh, and second, the victory of Mark Carney’s liberal party.
Jagmeet Singh’s defeat in the Burnaby Central constituency of British Columbia to Liberal candidate Wade Chang, along with the New Democratic Party’s (NDP) inability to secure at least 12 seats, has significant implications for the Khalistani movement. Singh, previously in coalition with Prime Minister Justin Trudeau, had been associated with supporting insurgent activities in the Punjab region of India. His party reportedly received donations from individuals linked to the Khalistani movement, such as Hardeep Singh Nijjar, which raised concerns about foreign influence in Canadian politics. The NDP’s loss of official party status represents a shift in the political landscape in Canada, although it may not eliminate support for the Khalistani cause. Nevertheless, this outcome could provide an opportunity to improve diplomatic relations between India and Canada, signalling a change in how issues related to the Khalistani movement are addressed in Canadian politics.
On the other hand, the other election outcome – the Liberal victory – can improve India-Canada trade relations. As Mark Carney showed interest in diversifying trade with its partners, Canada could initiate mending its economic relations with India. With bilateral trade standing at $9.36 billion as of 2023, and Canada being India’s 18th largest foreign investor, economic cooperation is an area of convergence for both countries. Thus, Carney’s victory could positively impact India-Canada relations in rebuilding ties, starting with trade and investment. The stalled Comprehensive Economic Partnership Agreement (CEPA) could also be boosted. “There are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship… I look forward to the opportunity to build that,” Carney stated, before the elections.
Another area of influence in Canada-India relations is the immigrant-related policies to be introduced by the new government. Today, Canada is home to 1.8 million people of Indian origin, among the largest Indian diasporas worldwide. Therefore, immigration policies in Canada would directly impact the bilateral relations. In that light, Carney’s plan to align immigration with the country’s economic capacity regarding housing, labour market shortages, and international student enrolment rates is yet to unfold.
In addition to economic, immigration, and diaspora factors, Canada’s geopolitical actions under its new leader may influence its relationship with India. If Canada were to strengthen its ties with China, particularly in light of strained relations with the United States, this could conflict with India’s strategic interests. Such a shift could negatively impact cooperation in the Indo-Pacific region, especially concerning initiatives like AUKUS, and potentially create tension in Canada-India relations.
Indian Prime Minister Narendra Modi’s statement congratulating Carney highlights a positive shift in relations between India and Canada. He noted that “India and Canada are bound by shared democratic values, a steadfast commitment to the rule of law, and vibrant people-to-people ties.” Additionally, preparations are already underway for the next Indian High Commissioner to Canada.
Conclusion
The 2025 Canadian federal elections represent a pivotal moment in Canadian history, with impacts that extend beyond domestic policies. One of the most significant factors in Mark Carney’s victory has been the threats posed by U.S. tariffs and sovereignty issues. Moreover, the defeat of the NDP and the trade policies of the new government indicate a potential improvement in relations between Canada and India. Carney’s victory could, therefore, help safeguard Canada’s sovereignty from American pressures while also strengthening partnerships with “like-minded” countries, such as India.
Bishwarupa Kar is a post-graduate student at the Department of Politics and International Studies at Pondicherry University. Her areas of interest include Climate Change, Climate Action and Climate Financing, Global South, Terrorism, and Polar Studies. Views expressed are the author’s own.
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