Mark Carney is Canada's new PM. What next?

Mark Carney, a relative newcomer to Canadian politics, has secured a fourth consecutive mandate for the Liberal Party, defying expectations and ushering in a new era of leadership just two months after replacing Justin Trudeau as party leader.

But despite the victory, Carney now faces the daunting task of governing with a minority in Parliament, amid rising tensions with the United States and pressing economic challenges at home.

Shortly after polls closed on Monday evening, Canadian broadcasters projected a Liberal win, with the party set to fall just three seats short of an outright majority in the House of Commons. While final results are still being tallied, Prime Minister Carney will remain in office, continuing the role he assumed following Trudeau’s departure from politics earlier this year.

A PM for unstable times

In his victory speech, Carney struck a combative tone, pledging to “stand up to the US,” which he accused of attempting to “break” Canada, a clear reference to the renewed friction with President Donald Trump’s administration over tariffs and trade rules.

The two leaders spoke in March, agreeing to begin negotiations for a new economic and security framework once the election concluded. Those talks now loom large, with Canadian exporters bracing for further disruption under Trump’s protectionist policies.

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Domestically, the Liberals are expected to act swiftly to cushion the economy—introducing legislation that includes tax relief for lower- and middle-income Canadians and a streamlined approval process for critical mining and energy infrastructure.

Carney, a former Bank of Canada and Bank of England governor, is widely seen as a technocrat who brings economic gravitas to a political environment increasingly shaped by populism and polarisation. His pledge to position Canada as a “clean and conventional energy superpower” forms part of a broader bid to reconcile environmental goals with the country’s resource-driven economy. A proposed C$5 billion trade diversification fund is also on the table, aimed at reducing Canada’s reliance on the US market.

Governing without a majority

While Carney’s Liberals won the most seats, they did not reach the 172-seat threshold required for a majority government. That means Carney will need support from other parties to pass legislation and avoid no-confidence votes. Bloc Québécois leader Yves-François Blanchet called for a temporary “truce” among parties, suggesting a period of political stability was needed as Canada embarks on delicate negotiations with Washington.

Blanchet said he envisions a “collaborative period of slightly over a year,” hinting at the possibility of issue-based support for the Liberals in Parliament. The left-leaning New Democratic Party (NDP) is also expected to play a kingmaker role in key votes.

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The Conservatives, meanwhile, are projected to return as the Official Opposition, leaving them little immediate leverage but the ability to challenge Carney’s mandate if the Liberal minority falters.

What’s next on the political calendar?

Carney may reshuffle his Cabinet in the coming days, though no formal ceremony is required unless changes are made. The immediate focus will turn to Parliament’s return, where members will be sworn in and a new Speaker elected. This will be followed by the Speech from the Throne, laying out the government’s legislative agenda.

With the G7 summit scheduled for June in Alberta, Carney will also have a global stage on which to assert his leadership vision—and perhaps define the next phase of Canada’s place in a volatile world order.

Whether the Liberals’ surprise comeback marks a lasting shift or a temporary reprieve may depend on Carney’s ability to deliver quick wins, manage economic headwinds, and keep a fragile minority government afloat.