How the 2025 Canadian Federal Election Impacts Financial Markets and Real Estate

As Canadians navigate the aftermath of the 2025 Federal Election, financial markets and the real estate sector are adjusting to the new political landscape. While elections often bring uncertainty, they also provide clarity once results are in.

With the Liberal Party securing a minority government, investors and homebuyers are watching closely to see how policy decisions will unfold.

1. Elections Provide Stability to Financial Markets

Historically, financial markets react to elections with volatility leading up to the vote, followed by a period of stabilization once the results are clear. The 2025 Canadian Federal Election mirrors the pattern seen in the U.S. election, where markets found footing after the outcome was determined. Investors tend to favor certainty, and while a minority government introduces some unpredictability, the broad policy direction is now clearer, reducing speculation and market swings.

2. Real Estate Policy: A Continued Focus on Housing Availability

Housing affordability remains a central issue in Canada, and all major parties have pledged to address the crisis. The Liberal government’s platform includes measures to accelerate home construction, unlock federal land for development, and provide financial incentives for first-time buyers. However, with a minority government, policy implementation may face challenges, requiring negotiations with opposition parties. Despite this, the commitment to increasing housing supply suggests continued support for the real estate market.

3. Interest Rates: A Consensus for Cuts, with One Exception

As we move further into 2025, there is a growing consensus among Canada’s Big 6 chartered banks that the Bank of Canada will implement additional rate cuts at its next revision. BMO, RBC, CIBC, TD, and National Bank all anticipate downward pressure on rates, projecting that borrowing costs will continue to ease as we head into 2026.

However, Scotiabank remains an outlier, maintaining its forecast that the Bank of Canada will hold rates steady at 2.75% through 2026. This divergence reflects ongoing uncertainty in global trade and inflationary pressures, which could influence the central bank’s decision-making in the months ahead.

Final Thoughts

The 2025 Federal Election has set the stage for economic and housing policy shifts that will shape Canada’s financial landscape.

While uncertainty remains around the specifics of implementation, the commitment to housing affordability and economic stability provides a foundation for cautious optimism. However, interest rates remain a wildcard, and market participants will be watching closely to see how monetary policy evolves in response to global and domestic pressures.

Book a call with our team at Pistes Financier to discuss how we can help with your search and financing needs. ( Booking Link )