Canadian Prime Minister Justin Trudeau's decision to step down after almost a decade in power comes as leaders in his government tackle housing affordability issues and executives in real estate and other industries express concern about potential U.S. tariffs.
After weeks of growing pressure and indications that his support from minority parties had disappeared, Trudeau, 53, appeared sure to be headed for defeat in Parliament. The outgoing prime minister, who first led the Liberals to a majority government in October 2015, said Parliament would be adjourned until March 24 while his party decides on a successor. No election date has been set.
"Despite best efforts to work through it, Parliament has been paralyzed for months," Trudeau said Monday during a press conference. "I intend to resign as party leader, as Prime Minister, after the party selects its next leader through a robust, nationwide competitive process. Last night, I asked the president of the Liberal Party to begin that process. This country deserves a real choice in the next election, and it has become clear to me that if I'm having to fight internal battles, I cannot be the best option in that election."
With Canada's population growth exploding by more than 1 million people per year, Trudeau's party began implementing measures to curb growth and introduced plans to limit the number of immigrants granted permanent resident status by more than 20% from 500,000 annually to 395,000 in 2025. The Liberal government was also discussing raising the tax treatment of capital gains from the sale of real estate and other investments.
While housing costs have declined, the cost crunch property professionals have blamed it on increased demand. The site Rentals.ca reported that the average asking rent for all property classes across the country dropped in November to a 15-month low of $2,139, but in November 2020, that figure was $1,712.
The last published statistics from the Canadian Real Estate Association show the average price of an existing home sold across the country was $694,411 in November 2024. When Trudeau was elected, the national average price was $454,976.
On the commercial property front, Jon Love, executive chair and founder of the KingSett Capital firm that has $18 billion in assets under management, including business real estate, said on LinkedIn that the resignation was a "little surprise" and worried about the implications for the country.
"Regrettably, no one at the helm for three months to work with the incoming Trump administration," said Love in the post.
In November, several real estate investment trust executives said they were monitoring the effect of the reduction in immigration on their rental rates and earnings.
"The recent immigration plan has weighed on sentiment lately, with projections indicating that Canada's population will experience a slight decline over the next two years before growth resumes in 2027," InterRent Real Estate Investment Trust President and CEO Brad Cutsey said on a November investors call. "Looking ahead, we may not see the significant market rent growth of recent years, but we're confident in what we have to offer."
Trudeau has looked to deal with those concerns by agreeing to a much-called-for elimination of what is known as the Goods and Service Tax on rental housing construction. Canada Mortgage and Housing Corp. has also expended the loan guarantees it provides for developers building multifamily.
Owners weigh in
United States President-elect Donald Trump has promised a 25% tariff on Canada goods and, and elected officials south of the border entered into the debate quickly on social media Monday. “The United States can no longer suffer the massive Trade Deficits and Subsidies that Canada needs to stay afloat,” Trump said in a post on his Truth Social platform. “Justin Trudeau knew this, and resigned.”
Pierre Poilievre, leader of the Conservative Party of Canada, quickly jumped on the resignation announcement and warned Canadians of being tricked into another Liberal face as leader.
The Conservative leader has been critical of possible successors to Trudeau, who are expected to include former Finance Minister Chrystia Freeland, and Mark Carney, the chair of Toronto-based Brookfield Asset Management.
Like other governments around the world, Trudeau locked down government office towers during the COVID-19 pandemic, and occupancy in most Canada cities has yet to recover to previous levels.
Federal office workers were mandated back into offices three days a week back in 2022, but many in industry have called for that to increase.
One of his government's most controversial tax measures impacting real estate was a decision in the April budget to increase the 50% capital gains inclusion rate to two-thirds.
The government set a June 24 deadline date to avoid the higher tax, causing many investors to sell, but the legislation has yet to be legally passed, and a story from the Canadian Press Monday indicated that the decision to prorogue Parliament now kills those changes.