
The Big Picture: Canadian Elections and the Equity Market
Author: The editor's desk
September 20, 2021
Correlation is not causation, but there’s something about connecting the dots between political leaders and equity markets that many investors still find intriguing if not ultimately that helpful. With Canadians heading to the polls on September 20th, here are five ways to slice and dice each Prime Ministerial term since 1968 through the lens of the S&P/TSX Composite Index, the country’s primary benchmark for stocks.
Party Performance
There have been 16 federal elections since Pierre Elliott Trudeau was first elected Prime Minister more than 50 years ago. Of these, eight of the 10 terms served by Liberal PMs corresponded with positive TSX returns, while four of the six served by Conservatives* did as well.

Who Says Markets Don’t Like Minority Governments?
Minority governments have coincided with four of the five best-returning terms of any elected Prime Minister since 1968. That said, they also correspond to the two worst.

Third Time’s Not Always a Charm
There have been three Prime Ministers who have been elected at least three times since 1968, but when it comes to corresponding equity returns during this stretch of their tenure, the third term was a tough slog for two of them.

One Term? No Problem.
Joe Clark and Paul Martin are the only Prime Ministers to serve just one elected term in the past 50 years. They also happen to be the PMs with the two-best corresponding TSX returns over this same period.

Let’s Call it a Draw
It’s part of the Canadian identity to flaunt comparisons to the United States, but in this particular context, there is no reason for superiority or inferiority complexes. Indeed, for every elected Prime Ministerial term that has coincided with the TSX outperforming the S&P 500 Index, there is a term that has coincided with Canada’s main benchmark index underperforming its American counterpart.

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