Canadian Prime Minister Mark Carney's Liberals retained power in the country's election on Monday, but fell short of the majority he wanted to help his government negotiate trade tariffs with US President Donald Trump.
Canadians across six time zones voted in a general election overshadowed by Mr Trump's rhetorical and economic attacks on the country.
Conservative leader Pierre Poilievre conceded defeat to Mr Carney and said his party would hold the minority government to account. The Liberals were leading or elected in 164 electoral districts, followed by the Conservatives with 147, with votes still being counted.
The Liberals needed to win 172 of the House of Commons seats to secure a majority that would allow them to govern without support from a smaller party.
Mr Carney had promised a tough approach with Washington over its import tariffs and said Canada would need to spend billions to reduce its reliance on the US. The election result capped a notable comeback for the Liberals, who had been 20 percentage points behind in the polls in January before former prime minister Justin Trudeau announced he was quitting and Mr Trump started threatening tariffs and annexation of Canada as the “51st state”.
“I look back to as recently as December, when everyone was writing the Liberal Party off,” Liberal Transport Minister Chrystia Freeland told Canada's CTV.
“People were even talking about whether we would retain official party status in the next election. Tonight, when it is clear that we are going to form the government, from my perspective, that is an outstanding result.”
Ms Freeland's resignation from the Liberal cabinet in December after a clash with Mr Trudeau led to the long-time prime minister stepping down.
With the Liberals having held power for a decade under Mr Trudeau, the Conservatives had initially been expected to benefit from anti-incumbent sentiment in Canada, which is dealing with a cost-of-living crisis.
But Mr Trump's threats infuriated many Canadians and led to a drop in momentum for Mr Poilievre, himself a populist firebrand who campaigned with Trump-like bravado.
Mr Carney, who only succeeded Mr Trudeau last month, asked voters to deliver him a mandate to deal with the US President. “President Trump has some obsessive ideas and that is one,” Mr Carney said of his annexation threat. “It’s not a joke. It’s his very strong desire to make this happen. It’s one of the reasons why this crisis is so serious.”
Mr Trump on Monday sent a message on Truth Social claiming Canada would become some sort of American utopia if it joined the US. “All positives with no negatives. It was meant to be,” he wrote.
Canada has been dealing with high costs for housing and goods for some time. And more than 75 per cent of its exports go to the US, so Mr Trump's threat to impose sweeping tariffs and his desire for North American car makers to move Canadian production south could severely damage Canada's economy.
Mr Trump had dialled back his talk of Canada becoming the 51st state during the campaign until last week, when he said Canada “would cease to exist as a country” if the US stopped buying its goods. He also said he is not just trolling Canada when he says it should become a state.
Mr Carney and Mr Poilievre had both said that, if elected, they would accelerate negotiations of a free trade deal between Canada and the US in a bid to end the uncertainty hurting both economies.
The Prime Minister, in particular, has notable experience of navigating economic crises, having done so when running Canada’s central bank and as the first non-British citizen to run the Bank of England.
“I think it's fair to say that the current position of the [Mr Trump] administration has made all of our lives more difficult and interesting as we try to figure out how we get to the best possible place we can get to,” Canada's ambassador to the UN Bob Rae told reporters on Monday.
On Tuesday, the US State Department extended Washington's congratulations to Mr Carney and said the US-Canada relationship "remains one of the most extensive in the world".
"We look forward to working with Prime Minister Carney’s government, particularly on key issues such as trade fairness, combating illegal immigration, halting the flow of fentanyl and other dangerous drugs, and countering the Chinese Communist Party influence in our hemisphere," department spokeswoman Tammy Bruce told reporters.
