Prime Minister Justin Trudeau announced Monday he will resign as Prime Minister and leader of the Liberal Party as soon as the party chooses his successor.
Governor General Mary Simon also granted Trudeau’s request to prorogue Parliament until March 24.
Trudeau’s move follows months of turmoil for his minority government, which has consistently trailed the Conservative Party by about 20 points for over a year. Circumstances within the party came to a head last month when Chrystia Freeland, the deputy PM and finance minister, resigned in a scathing letter that stopped just short of calling on Trudeau to resign.
The high drama and high stakes will continue into 2025, though, especially as the incoming U.S. President Donald Trump takes power in two weeks threatening 25 per cent tariffs.
Here’s what you need to know about what all this means for you and your business:
What Does Prorogation Mean for Legislation?
Prorogation effectively kills all government legislation. This wipes clean measures stalled throughout the fall by a Conservative filibuster — including an increase to capital gains taxes, changes to investment tax credits, cyber security measures, online harms legislation and other bills. There are mechanisms to revive them upon Parliament’s return, but given the rancour in the House, this may be unlikely.
Committees and other legislative business all pause as well.
Parliament will resume with a Speech from the Throne. The convention is that the vote to approve it is a vote of confidence. Given that the Liberals are in a minority situation, this vote could lead to their defeat in the Commons and an election.
What about Private Member’s Bills?
Private Member’s Bills (PMBs) do not die with prorogation, following procedural changes that became law in 2005. When Parliament resumes, these resume at the same point in the legislative process. Of course, an election would make this moot. All legislation, including PMBs, die in Parliament when an election vote is called.
What about regulations?
The Canada Gazette publishes the proclamation of prorogation. The government continues to publish new regulations or other updates as required even without Parliament sitting. In sum, the government’s regulatory authority continues unabated.
In other words, the public service continues to implement regulations from legislation previously passed by Parliament. Businesses tracking regulations already in the works, then, can expect these to tick along quietly in the background. They should continue to monitor the Gazette and engage senior civil servants on their progress.
Cabinet or the appropriate minister continues to have final sign-off on new regulations.
How does Cabinet work now?
The Prime Minister remains the head of government and his ministers continue to run their files. Governor in Council and Order in Council decisions, ministerial approvals, appointments, procurements continue, at least until an election is called.
Ministers who opt to run for the Liberal Party leadership likely will be obliged to resign. Ministers’ staff also are likely to move posts or depart, which may make engagement more challenging – though engagement is always possible for the most urgent files.
Will there be an election and what are the opposition parties up to now?
The Conservatives had hoped to take advantage of a committee meeting this week to kick-start a process for a no-confidence vote in late January. With prorogation, this is not an option. However, given their lead in the polls, the Conservatives will continue to agitate for an election as soon as possible.
The New Democrats, who have kept the Liberal government in power for the last three years, indicated in December that they would no longer do so. Whether the Prime Minister’s resignation will be enough to secure their support through a supply vote in the spring is up to leader Jagmeet Singh. He has struggled to articulate a clear position on what’s next for Parliament, and for his party and their support of the government.
There is no mechanism to trigger an election before Parliament resumes. This gives the Liberals time to select a new leader to take them into the likely election — though a leadership race of less than three months would be unprecedented.
How will the Liberal leadership race play out?
The Liberal Party executive will outline a process shortly. The party constitution requires a four-month race but there are mechanisms for the executive to choose otherwise in extreme circumstances such as these.
This means there may well be a shorter leadership race or the Liberal caucus could choose the next leader, though the latter route is unlikely given Trudeau’s stated preference for a competitive race.
What about the Trump factor?
Trudeau explicitly said he’s staying on as Prime Minister as his party chooses his successor in order to handle the economic threats posed by Trump. How well he will do as a lame duck prime minister remains to be seen.
The federal government will continue to coordinate with premiers and business leaders on a Team Canada approach. Vantage is ready to support businesses concerned about the tariff threat and which want to be part of these efforts.
What’s next?
In sum, no legislation or committee work will happen this winter. But regulations and other government work continue amid the political tumult.
Canada almost certainly is headed to a general election this year and, if the polls hold, Canada will have the first Conservative government in about a decade.
Team Vantage will provide the updates, insights and procedural guidance you require to navigate these shifting sands.
For more, contact us at info@mcmillanvantage.com.
