Canada's Trudeau wins second term but loses majority

Prime Minister Justin Trudeau fell short of a majority in Canada's national elections on Monday, a far cry from the landslide win he registered four years ago. 

His performance was on song: a good economy and low unemployment, legalising cannabis, the resettlement of thousands of Syrian refugees, and free trade deals among others.

However, his image subsequently took a battering, particularly over his role in the tackling of the scandal surrounding the company SNC-Lavalin, and the surfacing of old pictures of his painted in a blackface, indicating his racist streak.

Former US president Barack Obama endorsed Trudeau, calling him an "effective leader who takes on big issues like climate change."

Trudeau's Liberal party took the most seats in Parliament, giving it the best chance to form a government. However, falling short of a majority meant the Liberals would have to rely on an opposition party to pass legislation.

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"It's not quite the same as 2015. It's not all owing to the leader," said Robert Bothwell, a professor of Canadian history and international relations at the University of Toronto. "Trudeau is prime minister because the rest of the party was able to pull itself together and prevail. While Trudeau certainly deserves credit for what has happened he's really going to have to demonstrate qualities that he hasn't yet shown."

Still, the results were a victory for Trudeau, whose clean-cut image took a hit after old photos of him in blackface and brownface surfaced last month.

"I'm surprised at how well Trudeau has done," said Nelson Wiseman, a political science professor at the University of Toronto. "I don't think anybody expected Trudeau to get a majority but they are not that far off."

Justin Trudeau and his wife Sophie Gregoire Trudeau wave in Montreal, Quebec, Canada. Reuters

With results still trickling in early Tuesday, the Liberals had 157 seats - 13 short of the 170 needed for a majority in the 338-seat House of Commons.

"Tonight Canadians rejected division and negativity. They rejected cuts and austerity. They elected a progressive agenda and strong action on climate change," Trudeau said early Tuesday.

His address to supporters came, unusually, as his Conservative rival, Andrew Scheer, had just begun speaking to his own supporters, forcing networks to tear away from Scheer's speech. But the prime minister struck a conciliatory note: "To those who did not vote for us, know that we will work every single day for you, we will govern for everyone," Trudeau said.

Canada’s Liberal Party is set to form a minority government after Monday’s federal election, the Canadian Broadcasting Corp projected. That means Prime Minister Justin Trudeau will have to rely on support from other parties to govern.

COMMENTS:

JOHN MANLEY, SENIOR BUSINESS ADVISOR AT BENNETT JONES, FORMER CANADIAN FORMER FINANCE, INDUSTRY MINISTER:

“A minority government always makes things difficult ... the government doesn’t control parliamentary committees, they have trouble keeping their agenda moving, they may have to do things or not do things that they would otherwise be inclined to do based on needing the support of another party.

Liberal Party supporters react while watching the live federal election results at the Palais des Congres in Montreal.

“I think a Liberal government supported by the (New Democratic Party) is likely going to lean farther left.

“It raises a series of issues about what are the demands that an NDP party would make. What’s the price of governing going to be? And I think businesses are going to be reluctant to make any moves until they get some satisfaction around that. I suspect most businesses would rather a small Liberal majority to a Liberal minority with the NDP supporting it.”

GREG TAYLOR, PORTFOLIO MANAGER AT PURPOSE INVESTMENTS

“Markets don’t like uncertainty so it will all depend on what coalition they can come up with and how sustainable that will become.”

Conservative leader Andrew Scheer supporters watch the election results come in at his campaign headquarters.

“The energy stocks will be the most interesting to watch tomorrow and could be lower. The other fear was higher capital gains taxes and that is too soon to tell but would be a negative across all sectors.”

“The bigger problem is it seems that Canadians have never been more divided and the next government really needs to work to correct that. Alberta is at risk of a broader separatist movement and that would be a major negative for Canada.”

“Overall this should be pretty much as expected and markets shouldn’t move too much on it.”