Table of Contents Show
Most of the discussion about the federal elections happening April 28 has concerned how the winner will handle US President Donald Trump’s trade war on Canada. But there are other issues that could ripple through to key corners of the stock market.
There is little doubt that whichever party comes to power, its first order of business will be dealing with Trump and securing the best trade deal possible for the economy. Canada’s auto and resources sectors have been hit hard by Trump’s tariffs. In addition, as a major oil exporter, Canada is especially vulnerable to a broader global economic slowdown, which has been weighing on energy demand and prices.
It’s less certain what exactly either party’s victory could mean for investors in the Canadian stock market. Both the Liberal and Conservative parties have touted economic policies that prioritize Canada’s economic wellbeing. A significant portion of these proposals targets the housing and energy sectors—the two key pillars of the economy.
The Election and Energy Stocks: a Stark Divide
The two parties have the greatest divergence over the energy sector, and the election’s outcome could significantly reshape this landscape. “Most of the barriers [by the Liberal government] to natural resource development, [such as the] pipeline ban, tanker ban, caps on oil and gas production, carbon tax moved to upstream, will inhibit resource development,” argues Ian Lee, associate professor at Carleton University’s Sprott School of Business in Ottawa.
The Liberal plan focuses largely on expanding clean energy by strengthening supply chains, building new projects and grids to make clean energy accessible across Canada, and reducing reliance on the United States. Lee says that while these are “laudable initiatives,” they will have “a very small impact, as it will take years, if not decades, to develop critical minerals, and clean energy projects are a small percentage of total energy produced in Canada.”
The Liberal leader has also pledged to expand and modernize Canada’s energy infrastructure. “[Prime Minister Mark] Carney has outlined a streamlined process for energy project reviews for those that serve the national interest,” says David Doyle, head of economics at Macquarie Group. While Carney—a former Goldman Sachs banker and two-time governor of the Bank of Canada —has scrapped the controversial consumer carbon tax, Doyle points out that it is still being paid by large emitters.
Further, a Liberal mandate would “maintain the cap on greenhouse gas emissions from the oil & gas sector,” he says. That is because the Liberal energy platform retains most of the Trudeau-era policies designed to reduce the development and export of oil and LNG, even though “oil and gas are by far Canada’s largest exports.”
In contrast, the Conservative plan calls for eliminating many of these government barriers to growth in the energy sector and reducing red tape. A Conservative majority—a less likely outcome, based on most recent polls—would be more aggressive in supporting the energy sector. For a start, it plans to overturn the “No New Pipelines Law, so we can build new pipelines and LNG terminals to export our energy overseas, ending our economic dependency on the US,” says Lee.
Further, “[Conservative leader Pierre Poilievre] has pledged to repeal the entire carbon tax law and also repeal bills C-69 (environmental impact assessments) and C-48 (oil tanker moratorium),” Doyle notes, adding that he “would remove the cap on greenhouse gas emissions and aim to accelerate the approval of large resource projects.”
Lee points out that the Conservative leadership has proposed significant deregulation of the oil and gas industry to spur resource development. “Industry and business favor deregulation and less red tape and barriers to economic development. Thus, the private sector will react more positively to a Conservative government,” he says.
What This Means for Investors
The Carney-led government is expected to boost clean energy stocks like Brookfield Renewable Partners BEP.UN, Northland Power NPI, and Algonquin Power & Utilities AQN through expanded subsidies and stricter emissions policies. In contrast, Poilievre’s pro-oil platform—favoring increased production, pipeline development, and regulatory rollbacks—would likely benefit traditional energy players like TC Energy TRP, Enbridge ENB, and Suncor Energy SU.
The Housing Sector: Competing Blueprints
No matter who wins, housing development is expected to accelerate, with both candidates prioritizing a housing supply boost, whether through direct government projects or private sector incentives.
“The Liberal housing plan will create Build Canada Homes to get the federal government back into the business of home building, by acting as a developer to build affordable housing at scale, including on public lands,” says Lee. Other Liberal measures include catalyzing the industry by providing over C$25 billion in financing to innovative prefabricated home builders, and another C$10 billion in low-cost financing and capital to affordable housing developers.
“The Liberal housing plan will build on the elimination of the goods and services tax for first-time homebuyers on homes at or under C$1 million,” says Lee, noting that “this will positively affect affordability.”
A Conservative government would adopt a different approach to achieve similar results. Lee says the Poilievre administration would take on the role of the facilitator, enabler, and regulator of industry, and would “use indirect strategies to incentivize developers to build homes.”
The Conservatives plan to revive the real estate market through measures like axing the sales tax on new homes under C$1.3 million, potentially saving families up to C$65,000 on the purchase of a home and C$3,000 on yearly mortgage payments while spurring a large-scale homebuilding boom. Additionally, Poilievre promises to allow Canadians to defer capital gains tax, including on real estate assets, provided they reinvest the proceeds in Canada between July 1, 2025, and Dec. 31, 2026.
Housing Stocks and the Election
Regardless of which party forms the government, the focus will remain on boosting Canada’s housing market by stimulating construction activity, removing obstacles, and incentivizing homeownership.
Whoever is prime minister, this push is expected to drive up demand for construction materials, benefiting homebuilding-related stocks. Timber producers may be particularly well positioned to gain from increased construction activity from a national push to expand housing. Some of Canada’s leading lumber and timber product makers include West Fraser Timber Co. Ltd WFG, Canfor Corp CFP, and Interfor Corp IFP.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
