Economic turmoil and rising living costs in Canada have sparked significant political shifts, including the resignation of Prime Minister Justin Trudeau, just before President-elect Donald Trump’s official inauguration.
Challenges such as tariff disputes affecting 77% of Canadian exports have exacerbated financial concerns. According to a survey by Léger, 37% of Canadians rate their financial situation as poor, with higher dissatisfaction among those aged 18–54. Notably, 43% of employed Canadians fear job loss by 2025—a 3% increase from November's survey.
The economic outlook is grim, with 57% of Canadians believing the country is in a recession, a sentiment most prevalent among younger demographics (66% of those aged 18–34). Rising costs of living, especially in housing and food, coupled with ongoing trade tensions with the U.S., have deepened financial insecurity.
Trump has proposed a 25% tariff on Canadian goods, potentially worsening Canada’s economic situation. Inflation, while slowing to 1.9% annually in November 2024, remains a concern. Since the onset of the Russia-Ukraine war, consumer prices in Canada have risen by 11.35%.
Efforts to stabilize the economy include the Bank of Canada’s interest rate cuts, which reached 3.25% in December 2024, following peak rates of 5% in mid-2023. Despite a slight 0.3% GDP growth in October, November saw a projected 0.1% decline, and unemployment climbed to 6.8%, the highest since October 2023.
Amid these crises, Trump suggested merging the U.S. and Canada, stating this could eliminate tariffs, reduce taxes, and ensure protection against geopolitical threats. He shared on Truth Social:
"If Canada merges with the United States, there will be no tariffs, taxes will drop significantly, and they’ll be entirely safe from Russian and Chinese naval threats… Together, we’ll be a great nation!"
Trudeau announced his resignation, acknowledging challenges within his party and growing tensions with Trump. He remarked, "This country deserves a real choice in the upcoming elections. If I must fight internal battles, I am not the best option."
As Canada grapples with its economic future, Trump’s controversial proposal has stirred mixed reactions, with some Canadians open to the idea of becoming the U.S.’s 51st state, while others remain fiercely protective of national sovereignty.