Parliament’s Return: World and House of Commons in Flux

Parliament returns with the Liberal government facing both a charged international agenda and a still fragile House of Commons. The Budget Implementation Act stalled late last year, underlining how complex the legislative math remains.  

Prime Minister Mark Carney’s Davos speech outlined a doctrine of “values-based realism” that prioritizes pragmatism and a focus on sovereignty, resilience, and middle power coalitions.  

As MPs return to the House, this emerging “Carney Doctrine” will shape not only the government’s foreign policy but also its approach to investments and security.  

1. How will the government implement the “Carney Doctrine” 

Why it matters: Prime Minister Carney’s landmark Davos speech spoke truth to power and took a not-so-veiled swipe at U.S. policy under Donald Trump.  

Canada will pursue multifaceted relations based on compartmentalisation with different countries and regime types guided by Canadian interests.  

Carney also called on other middle powers to band together and build new alliances to withstand economic coercion. 

However, this ‘Carney Doctrine’ also laid bare the ‘Carney Paradox.’ The speech at once galvanized Canadians and generated a positive response abroad, but it also incensed the Trump administration, and is likely to further complicate negotiations with the United States.  

Canada has made clear that it is not pursuing a formal free trade agreement (FTA) with China, rather it is seeking to find a new way of dealing with the economic security risks stemming from trade with China – the very same concerns the Americans have.  

Canada’s recent bilateral framework arrangement with China does not run afoul of CUSMA Article 32.10 which restricts signatories’ ability to enter a formal FTA with non-market economies.  

The details:  

• We are seeing the Prime Minister trying to thread the needle of “building strength at home” into priorities like the Major Projects initiative and other tax incentives, which seek to advance private sector investment in key sectors (energy, critical minerals, infrastructure) 
• The government has committed to doubling defence spending by 2030. The development of an Industrial Strategy largely weighted towards defence is a cornerstone of the government’s efforts to achieve this objective and build domestic capacity 
• The idea of collective resilience advanced in the Prime Minister’s speech in Davos has been front and centre as the Carney government works on new strategic partnerships with the EU, China, the UAE, Qatar, and ASEAN countries 

The bottom line: Expect the government’s spring agenda to frame “nation-building” priorities in defence, major projects, and trade diversification as tools to increase Canada’s resilience in the face of coercion from the great powers.  

Efforts to enact the tools will give us a window into what issues each party in this minority Parliament is prepared to support and how they justify their opposition to what the government will argue is essential to safeguarding Canada’s long-term prosperity and sovereignty.  

Given roughly 25% of Canada’s GDP is tied to U.S. trade, Canada can’t feasibly replace all this trade through diversification. The government must find a way to implement its agenda without blowing up relations with the U.S. This is a herculean challenge given the President’s unpredictable nature. 

2. Carney continues to navigate a minority government  

Why it matters: Even with two recent floor crossers from the Conservatives, the Liberals still are in a slim minority in Parliament.  

This affects how quickly the government can pass complex legislation like the Budget Implementation Act.  

The Prime Minister’s ability to move his key priorities and initiatives forward depends on the government’s ability to manage various real and rumored Liberal MP departures, as well as their ability to find agreement and support from opposition parties.  

The numbers:  

• The Liberals won 169 seats in the April 2025 election, leaving them three shy of a majority 
• Chrystia Freeland’s recent resignation from her Toronto-area seat has triggered the need for a by-election, adding short-term complexity for the Liberals. While it’s traditionally a safe Liberal riding, additional resignations could further test the government’s ability to stage-manage this timing 
• With Freeland’s departure, and two former-Conservative MPs crossing the floor, the Liberals are now at 170 seats—two Liberal MPs shy of majority status 

The bottom line: Navigating a minority Parliament while advancing major initiatives on defence, trade, and industrial policy will keep procedural House tactics and confidence votes front and centre.  

If the government can secure even a handful of additional votes through byelections or floor crossers, it will enable the government to advance its legislative agenda faster.  

3. Poilievre gears up for a leadership review vote 

Why it matters: Conservative Leader Pierre Poilievre faces a mandatory leadership review at the party’s late-January convention in Calgary. Even though he increased the CPC seat count and the Conservative overall vote share, the review is mandatory after losing an election.  

Pierre Poilievre is expected to win the leadership vote, but many inside and outside Conservative circles are eager to see how the party forges ahead after a challenging few months since his by-election victory.

The details:  

• While Poilievre only needs more than 50% support to stay on as leader, the political reality is that anything under 70% will be difficult for Poilievre to show legitimacy within the party, and especially the caucus
• If Poilievre secures a strong mandate, Conservatives will have more room to pivot from internal messaging to sharpening their economic and affordability message as the Liberals look to shape the upcoming session around the “Carney Doctrine” 
• Look towards the spring session of Parliament post-leadership vote for Poilievre and the Conservatives to refresh their message to Canadians 

The bottom line: Pierre Poilievre’s leadership review is less about his immediate survival than about the margin of support Poilievre receives, and how it positions him against a Liberal government that is continuing to move ahead with its agenda.  

4. NDP leadership race enters homestretch 

Why it matters: The federal NDP has been without a permanent leader since Jagmeet Singh lost his seat and stepped down after the 2025 election, leaving the party with only a small caucus and diminished formal status in the House of Commons.  

As Carney dominates the national narrative and Poilievre fights for his political future, the NDP will spend the first few weeks determining the direction of their party before their leadership results are officially announced on March 29.  

The details:  

• Coverage of the leadership race has shown two front runners, Avi Lewis and Heather McPherson, with somewhat competing visions for the party’s future 
• With so few MPs in the NDP caucus, the next leader will have to think very carefully about when to work with the minority Liberal government and when to break with it, especially on key budget and confidence votes. This also means being strategic on which issues to challenge the government and the Conservatives 

The bottom line: At a time when the Liberals are occupying more of the political centre, the NDP leadership outcome will shape how pressure is applied to the government from the left on the government’s key priorities of major projects, trade diversification, and economic reconciliation.