Five Things To Watch For From Canada's Liberal Minority Government

The New Democratic Party (NDP), leading in 27 electoral districts, will be key in enabling the Liberals to pass laws in the 338-seat House of Commons after Trudeau's party fell shy of the 170 seats needed for a majority.

Prime Minister Justin Trudeau's Liberal Party won its third straight Canadian federal election on Monday and its second consecutive minority government, in which the Liberals rely on another party to govern.

Here are five factors to watch for:

New Democratic Party Demands

The New Democratic Party (NDP), leading in 27 electoral districts, will be key in enabling the Liberals to pass laws in the 338-seat House of Commons after Trudeau's party fell shy of the 170 seats needed for a majority.

The left-leaning party has pushed for higher taxes on the rich, government-paid drug and dental care, raising the minimum wage and canceling student debt. The NDP is expected to demand concessions on its priority issues in exchange for support.

Without it, the Liberals could lose key parliamentary votes, triggering another election.

Pandemic Protection

Trudeau promised to require vaccinations for federal government workers, employees of federally regulated industries like airlines, and domestic travelers on planes and trains.

Canadians will expect him to enact the mandates soon, with a fourth COVID-19 pandemic wave surging in western provinces and the most populous province of Ontario. Canada has one of the world's highest vaccination rates, but it has stalled at about 68% of the population.

Action On Climate Change

Forest fires in Western Canada and a drought in crop-growing areas are focusing attention on climate change.

The Liberals have promised to cut national emissions by at least 40% from 2005 levels by 2030 and add a new requirement in 2025 for the oil and gas sector to cut emissions by an undetermined rate.

They have given little detail on how they will achieve their goals, but are expected to flesh out a strategy to back construction of massive hubs to sequester carbon.

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Managing The Economy

To tackle the pandemic, the Liberals ran up a record national debt of C$1 trillion ($785 billion) and pushed budget deficits to highs not seen since World War Two.

Their campaign promised a further C$78 billion in new spending over five years, including pledges for a national childcare program and an increase in affordable housing supply by building, preserving or repairing 1.4 million homes over the next four years.

The Liberals said they would hike the net tax rate on the most profitable banks and insurance companies.

Trudeau Exit Plan?

Trudeau called the election in hopes that Canada's successful COVID-19 vaccination plan would enable the Liberals to win a majority.

Their failure raises questions about his own future, and he may face pressure to quit, allowing a new leader to put a different face on the party before another election.

Finance Minister Chrystia Freeland and former Bank of Canada Governor Mark Carney figure in speculation as possible replacements.

CommentsEarly on Tuesday, Trudeau told supporters the results meant he has a clear mandate.