What happened?

On January 6, 2025, the Governor General prorogued (suspended) the 44^th Canadian Parliament at the request of the Prime Minister. Prorogation brings the current session of Parliament to an end. Prorogation suspends Parliament but does not dissolve it. So, Members of Parliament continue to hold their seats, as do Cabinet ministers, but no parliamentary business occurs. Unenacted government bills lapse and fall away (known as draft legislation “dying on the order table”). Studies and hearings by parliamentary committees cease.

The Prime Minister also announced his intention to step down once the governing Liberal Party chooses a new leader, who would then become Prime Minister.

Parliament is set to reconvene on March 24, 2025.

Here’s what you need to know about the legal framework for government operations and decision-making in the coming weeks and months.

What are the government’s powers during prorogation?

The act of prorogation itself, and the political circumstances surrounding the Prime Minister‘s decision, do not create any formal legal or conventional change in the stature of the government’s executive governing power. By custom, a government anticipating a leadership change operates uninterrupted, but is likely to defer significant new policy decisions or radical departures from the status quo until the new party leader has taken office as prime minister and formed a cabinet.

During the period that Parliament stands prorogued, Cabinet may continue to meet; routine spending and policy decisions and appointments will proceed; and imminent and urgent matters, such as threats to public peace or acts of war, remain in the executive purview and powers of the current Prime Minister and his government.

In one policy area of acute concern — namely, government actions in response to potential American tariffs — it is presently unclear how assertively the current government will exercise its executive and regulatory powers and negotiate with the incoming Trump administration.

Will there be an election?

Ostensibly, prior to Parliament reconvening on March 24, 2025, the Liberal Party of Canada will have selected its new leader in accordance with the Liberal Party’s constitution.[1] That new leader will have formed a Cabinet, which the Governor General will have sworn in.[2] The Governor General will then open the new parliamentary session by reading the “Speech from the Throne”, prepared for her by the newly appointed government.

Following the Speech from the Throne, the government will face an immediate and automatic vote of confidence in the House of Commons.[3] If it loses that vote - if the House does not endorse the speech - then the new Prime Minister must request that the Governor General dissolve Parliament and call a general election.

This will be the first opportunity for a vote on a traditional matter of confidence — an opportunity that the leaders of the opposition parties have indicated that they intend to seize. If they maintain this position, then the new government, led by the new leader of the Liberal Party, will not be long in office; it will fall shortly after the opening of the new session of Parliament.[4]

What are the government’s powers during an election period (the caretaker convention)?

The period from the dissolution of one Parliament, through the election campaign and the election, and up until the summoning of the new Parliament, is governed by the “caretaker convention”. Under the caretaker convention, the government retains its full legal powers and prerogatives but is expected to act with restraint in exercising them.[5] The Privy Council Office of the Government of Canada issued guidelines during the last writ period, in 2021, on the caretaker convention, stipulating that, “in matters of policy, expenditure and appointments”, the government should restrict itself “to activity that is: (a) routine, or (b) non-controversial, or (c) urgent and in the public interest, or (d) reversible by a new government without undue cost or disruption, or (e) agreed upon by the Opposition (in those cases where consultation is appropriate)”.[6]

The Privy Council Office’s guidelines for the caretaker period state that a government exercising “restraint” does not mean that government is prohibited from making decisions or announcements, or otherwise taking action, during the caretaker period. However, novel policy and regulatory initiatives are not likely to be introduced until a new Parliament has been elected.[7]

After the caretaker convention comes into effect, “appointments, policy decisions, new spending or other initiatives, announcements, negotiations or consultations, non-routine contracts and grants and contributions” will largely be deferred.[8] Cabinet is unlikely to meet during the caretaker period, and new regulatory initiatives will be paused.[9]

While the caretaker convention is in effect, deputy ministers and other senior civil servants will take on a more pronounced role in the day-to-day management of ministerial portfolios, including with respect to processing of routine and non-controversial contracts and grants and contributions.[10]

What should you do?

Stakeholders seeking legislative, regulatory or policy changes will need to refocus their efforts on monitoring the ebb and flow of the Liberal Party leadership process and the lead-up to the next federal election, whenever it comes. It will be important to gauge how current and proposed initiatives fit with the policies and priorities of the various political parties that are likely to be represented in the 45th Parliament, which will be summoned after the next federal elections.

Stakeholders doing business with the Government of Canada or under federal government programs should prioritize refreshed and clear communications with government counterparts to ensure consistency of processes and should also flag potential changes and slow-downs.

Ultimately, the legal framework relies on the decisions of the government of the day either to adhere to political customs or pivot into action as it sees fit in unconventional circumstances. This uncertainty — the potential for unexpected fluctuations in situations governed by constitutional convention — is the legal reality and the political risk for the foreseeable future in Canada.

Importantly, federal lobbying and conflict of interest rules always remain in effect. Even during an election, there will be a federal government in office, and organizations and individuals should take care to ensure that they communicate and otherwise deal with public officials in accordance with all applicable laws.

McCarthy Tétrault can help. If you have questions about how the upcoming government change — or changes — will affect your business, reach out to one of the authors of this article or to your regular McCarthy Tétrault contact. Our industry-leading Public Sector team is well positioned to help you manage risk and capture opportunities amid flux and uncertainty.

 

[1] See Liberal Party of Canada, Constitution, s. M (“Leader”).

[2] There is no requirement that the Prime Minister be a sitting Member of Parliament, although constitutional convention dictates an unelected party leader should seek a parliamentary seat at the earliest opportunity.

[3] Hogg, supra, at s. 9:21.

[4] In theory, the Prime Minister can ask the Governor General to dissolve Parliament prior to March 25, 2025, and call and election even before Parliament reconvenes, negating the Throne Speech process.

[5] Hogg, supra, at s. 9:4.

[6] Privy Council Office of Canada, “Guidelines on the conduct of Ministers, Ministers of State, exempt staff and public servants during an election”.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.