Canada’s incumbent Prime Minister Justin Trudeau won a closely fought election on 21 October and will now have to form a minority government after his Liberal party secured 157 seats in the 338-seat parliament.

Trudeau is likely to rely on Jagmeet Singh’s centre-left New Democratic Party (NDP) to form a coalition government. While still able to claim victory, the 47-year-old Trudeau now has 20 fewer seats in the incoming parliament than what he had when he was first elected in 2015.

Over the last year the Canadian economy has been surging, with the Canadian dollar gaining 4% against the US dollar and inflation on course to meet the 2% target. However, the price of a coalition government will be more ambitious green policies and more spending.

With a coalition government, Trudeau will pursue a deficit-driven plan and a more ambitious plan to invest in initiatives aimed at combatting climate change.

Adam Scheer’s Conservatives appear to have won the popular vote by almost one percentage point but secured only 122 seats.