What's next for Canada now that the national elections have left the Liberals in control of the country for another four years?
In many respects Canada is facing much more difficult problems than the United States.
Canada's economy is very dependent on trade with the United States but the threat of tariffs puts the country's future in doubt.
77% of Canada exports go to the United States.
Those exports represent 22% of Canada's total GDP.
In fact, more goods are exported from Canada to the United States each year than any goods that are transferred among the provinces of Canada.
It will be difficult for Canada to win any trade war with the United States considering those numbers.
Housing affordability in Canada is far worse than in the United States.
The median home price in Canada is C$896,000 ($645,000 at the current exchange rate into $USD)
In Toronto it is C$1.2 million and in Vancouver it is C$1.7 million.
The average mortgage payment as a % of income is 62%.
In the United States the median house price has just passed $400,000.
Average incomes in the United States are also about 20% higher than in Canada---$66,622 vs $54,630.
Simply stated, house prices in Canada are 60% higher even though incomes are 20% lower than in the United States.
This is a major problem for Canada especially for younger people who increasingly consider that home ownership is an impossible dream.
A major reason that housing has become so unaffordable in Canada is that immigration has been allowed to skyrocket over the last decade under the Liberal Party.
The argument was that the added population was necessary to allow Canada's economy to grow.
However, if that was the reason, it has failed miserably.
Canada has one of the worst records for economic growth in the world over the last decade.
The immigration does not appear to have helped the economy but it will undeniably change the demographics and culture of Canada for the future.
Almost 30% of the population of Canada today was born outside the country.
In Toronto, that number is 47% and in Vancouver it is 42% according to recent estimates.
By comparison, the percentage of foreign-born in the United States today is 15% which is the highest that it has ever been in the long history of the country.
As an example of how pervasive immigration has become to the fabric of Canada consider the fact that there are more Sihks in the Canadian legislature than there are in India's.
As was the case in the United States election of 2024, there was a major divide in the way urban centers voted compared to the rest of the country.
Liberal Party support was greatest in urban centers where the concentration of immigrants is also highest.
We are also seeing the same trend in Canada that we are seeing in the United States lately.
Younger voters have become more conservative and older voters more liberal.
Voters 54 years of age and younger favored the Conservative Party.
Voters 55+ were the difference in the election for the Liberals.
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The biggest challenge Canada faces is the divide between those in Western Canada (with the exception of the Vancouver area) and the population centers in the East.
This is particularly true for the provinces of Alberta and Saskatchewan..
Due to their stronger fiscal position the Western Provinces, including Alberta and Saskatchewan, do not receive any equalization payments from Ottawa. This indicates that these provinces are effectively subsidizing the Eastern Provinces.
Alberta has already begun taking steps for a referendum on separation from Canada in the wake of this week's election.
I would expect to see a referendum on this issue to pass in Alberta within the next year.
If this occurs I would not be surprised to see Saskatchewan follow suit.
At that point under the constitutional rules and statutes in place the national government of Canada is required to bargain in good faith with regards to the complaints of the provincial residents.
These provinces have plenty to complain about.
Alberta and Saskatchewan have 95% of Canada's oil and gas reserves and 75% of its farmland.
However, they are vastly underrepresented in Canada's legislature.
The Liberal Party and Carney are openly hostile to the oil and gas industry and the any pipeline construction that is necessary to further monetize Alberta's natural resources.
In fact, Carney recently stated that companies who are not committed to "Net Zero" will be punished.
I assume that includes the cattle farmers in Alberta and Saskatchewan as well as the oil and gas producers. We know the the "Net Zero" crowd also would like to eliminate meat.
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I don't expect Canada to be able to secede and become an independent country or to join the United States as the Canadian constitution requires all the other provinces to agree to separation.
The other provinces are deriving too much economic benefit from Alberta and Saskatchewan to let them separate in the near future.
However, I do foresee a period of turmoil and tumult for Canada as result of the policies that the Liberals will undoubtedly continue to pursue.
Considering the deep political and social divisions that have developed in Canada it is not far-fetched that we might see Canada implode or split apart in the longer term.
What's next for Canada makes me even more grateful to be living in the United States of American right now.