2026 is anticipated to be another eventful year in Canadian politics following a tumultuous period that saw Prime Minister Justin Trudeau’s resignation and Conservative MPs defecting to join Prime Minister Mark Carney’s Liberal government. As the Liberal government, just one seat shy of a majority, strategizes its next moves, key decisions await federal opposition parties, all against the backdrop of crucial U.S. trade negotiations.
An essential development in 2026 will be the commencement of the mandatory review of the Canada-U.S.-Mexico Agreement on trade. Prime Minister Carney recently announced that formal discussions with the United States will begin in January. While the current agreement has provided some protection for Canada during President Trump’s trade disputes, the Canadian economy continues to face challenges from tariffs on vital sectors like steel, aluminum, automobiles, and lumber.
The U.S. Trade Representative has outlined conditions for Canada to extend the agreement, including demands for market access for U.S. dairy products and addressing provincial bans on U.S. alcohol. Additionally, there are proposed changes to the Online Streaming Act, affecting platforms like Netflix and Spotify. Despite these challenges, Prime Minister Carney remains optimistic about the agreement’s future.
Another significant event to watch is the Conservative Party’s national convention in Calgary at the end of January. Members will decide on Conservative Leader Pierre Poilievre’s leadership following the party’s election loss. Poilievre, confident in passing the review, faces internal and external pressures amid changes in party dynamics and recent defections.
With Carney’s Liberal government just one seat away from a majority, speculation arises about potential further defections from opposition parties. The possibility of more floor-crossers and political maneuvering adds intrigue to the political landscape. Meanwhile, the NDP is gearing up for a leadership race in March after a disappointing election outcome, with five candidates vying to lead the party out of its current challenges.
Lastly, border security legislation remains a contentious issue, with concerns raised about overreach and privacy implications. The government introduced Bill C-2, which faced opposition, leading to the creation of a revised bill, C-12, currently in the Senate. Additional legislative changes, including tax cuts and criminal code amendments, are also in progress, shaping the legislative agenda for the coming year.