• Two major recent polls suggest that the incumbent Liberals are heading for a heavy defeat at the next election in Canada, which is due by October 2025.

• The prime minister, Justin Trudeau, has reaffirmed his desire to contest a fourth general election as Liberal leader. No Canadian prime minister has won four consecutive terms for more than a century.

• Although EIU expects the economy to be in a stronger position by the time that the election is due in late 2025, we do not think that its performance will be vigorous enough for Mr Trudeau to overcome voters’ dissatisfaction after his long stint in office.

• The opposition Conservatives have more momentum under the exuberant Pierre Poilievre than under previous Tory leaders that Mr Trudeau had faced.

• There is a chance that the party will force out Mr Trudeau if Liberal poll ratings remain dismal for an extended period.

Two new polls by the Angus Reid Institute (ARI) and Abacus Data show that the Liberals would lose power if a general election were held today. The ARI poll indicates that the Conservatives lead the Liberals by 39% to 28%, a gap that has widened from 7 percentage points a year ago. Abacus also has the Conservatives at 39%, but the Liberals down at 26%. At the 2021 election the Liberals polled at 32.6% and the Conservatives at 33.7%. However, a considerable lead in the popular vote does not guarantee a parliamentary majority in Canada’s first-past-the-post system. Although the Conservatives won more votes nationally in 2021, their support was concentrated in fewer constituencies, with the Liberals winning 158 seats to the Tories’ 117. Nevertheless, the fact that the Conservatives’ lead in national polls has grown steadily over the past two years shows that the Liberals are in a difficult position.

Four in a row?

At the heart of the Liberals’ woes is public opinion of the prime minister, Mr Trudeau. He has had a net disapproval rating with the ARI since 2021, but this has widened from about 15 percentage points at the time of the last election to 33 percentage points in the most recent poll. Every province and every age cohort has a net negative view of Mr Trudeau, according to Abacus. These ratings range from 9 percentage points among 18-29 year olds (his best performance) to 52 percentage points among residents of Saskatchewan and Manitoba provinces. His ratings are likely to have been driven down by a weakening economy, with economic growth hit by a combination of high interest rates and rapid consumer price inflation, as well as a high-profile row with India. Mr Trudeau created controversy by accusing the Indian government of killing a Sikh separatist leader in British Columbia. (India denies any involvement.)

In recent weeks Mr Trudeau has reaffirmed his desire to contest a fourth general election as Liberal leader. Although Canada has had a number of long-serving prime ministers (including Mr Trudeau’s father), it has been more than a century since a prime minister won four consecutive terms in office. We expect that if Mr Trudeau remains as Liberal leader, the party’s chances of remaining in government will be significantly diminished, given the close correlation between the popularity of a party leader and that party’s electoral performance.

Worryingly for Mr Trudeau, the responses to the Abacus poll suggest that he is not especially disliked, but that voters are just tired of him. This is a difficult position to be in, as it cannot be overcome by a flashy new policy or a cabinet reshuffle. This is a common affliction for administrations that have been in power for a long time. This issue is compounded by the perceived vitality and momentum of the opposition Conservatives. Mr Trudeau came to power in 2015 after a decade of Tory rule under Stephen Harper that ran out of steam. The Conservative leader, Mr Poilievre, is attempting to do to Mr Trudeau what Mr Trudeau did to Mr Harper: persuade voters that they need a new and more dynamic government in charge.

At this point it appears that Mr Poilievre is succeeding. The Conservative Party is more united than it has been in years; Mr Poilievre gives a little to all of its factions. There are tinges of populism (through wanting to “‘axe the [carbon] tax” and decrying “Davos elites”), fiscal conservatism (he wants any new government spending to be matched with equivalent cuts) and social centrism (he opposes drug criminalisation). He is more charismatic on the campaign trail than either Erin O’Toole or Andrew Scheer was. Notably, Mr Poilievre has a higher net favourability rating among those who voted Conservative in 2021 (79%) than Mr Trudeau’s among Liberal voters (61%).

Time for a change?

The Liberals will have a difficult decision to make over the next year if there is little movement in the polls. Removing Mr Trudeau would be a big decision, given his election-winning history. Polling on potential future Liberal leaders has the deputy prime minister, Chrystia Freeland, as the most recognisable alternative, significantly ahead of the foreign minister, Mélanie Joly, the innovation minister, François-Philippe Champagne, and the president of the Treasury board, Anita Anand.

We believe that Mr Trudeau’s best hope of winning a fourth term lies with the economy. Abacus asked voters who said that they were not currently supporting the Liberals what would make them more likely to return to the party; 34% of respondents said that a new leader would encourage them to vote Liberal, but a more influential factor (cited by 40%) was if the economy began to improve. Our forecast suggests that at the moment the economy is at the most difficult point of the current cycle. The policy interest rate is at its peak (of 5%), and consumer price inflation remains above the target band of 1-3% of the Bank of Canada (the central bank). We expect inflation to continue to moderate over the next year, enabling the central bank to begin cutting its policy rate in the second half of 2024.

As at late 2023 our central forecast assumes that an improvement in the economy will prevent the Liberals from removing Mr Trudeau. However, we do not believe that the recovery will be vigorous enough to overcome voters’ dissatisfaction with the prime minister, owing to the sheer longevity of his prime ministership. Time is not on Mr Trudeau’s side.

The analysis and forecasts featured in this piece can be found in EIU’s Country Analysis service. This integrated solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organisations to identify prospective opportunities and potential risks.