Post Election Take: Diversified Industries

With the 2025 Federal election now complete, and what appears to be a Liberal Minority government elected, we review several of the policy platforms and announcements that may have an impact across our diversified industries coverage. We would anticipate many of these changes take time to implement given their requirement for changes to legislation, as well as the likely first focus for the new government in managing the relationship with the United States and tariffs on Canada.

We draw our analysis from a wide range of sources including party policy papers, government press releases and scoring documents prepared by the Parliamentary Budget Office (PBO). We would also expect that the policies and priorities of other parties shape the execution of the government, noting that there are significant commonalities in the platforms, but in certain cases, require changes to legislation needing multiparty support. We see the proposed policies as constructive for our Engineering and Construction space with increased demand in coming years, neutral for aviation, rail and waste and somewhat negative for multi-family real estate. Highlights:

Infrastructure Spending Expands
The Liberal and Conservative policy platforms both talked extensively about an expansion in Defence spending to reach the 2% of GDP goal by 2030 and also of support for the construction of large infrastructure in several areas with a focus on expansion in Northern Canada. There were also details on building an east-west energy corridor and support for new LNG projects, and healthcare facilities.

Setting a Framework as Tariff Discussions Begin
The Liberal platform follows on pre-election announcements relying on the USMCA trade pact as a base and authorizing duties for non-compliant light vehicles. While there is some form of a 25%/10% tariff regime, we expect that this will be the subject of extensive negotiation separately or as part of further USMCA talks to come given the highly interconnected nature of North American supply chains. Policies to avoid compounding duties on parts are already in place and there is already some discussion about reducing duties on North American content.

Generally Neutral for Most Sectors
While there are some small targeted regulatory changes proposed, we see limited impact on sectors like aviation, rail and waste. There was no material change to their regulatory frameworks proposed, which we view as needle-moving.

Stimulating Housing Supply with Direct Investments and Tax Incentives While Restricting Demand
Both policy plans of the Liberals and Conservatives looked to stimulate housing with a variety of tax incentives and direct intervention in the housing market. While many of the policies are applicable to single-family housing, incentives for multi-family housing including the reintroduction of the Multi-Unit Residential Building (MURB) tax scheme were introduced. Begun in 1974, the MURB is estimated to have created ~195,000 units at a cost of $2.4bn in lost tax incentives, however, it had several negative impacts, which led to its end in 1982. Coupled with new restrictions on immigration levels, which are more of a return to earlier policies, we believe the policy changes may be modestly negative for existing multi-family operators, however, there are many details, and the challenges of construction to overcome.

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