Montreal, Canada – Canada’s governing Liberal Party has chosen Mark Carney to replace outgoing Prime Minister Justin Trudeau as its leader.

The former governor of the Bank of Canada won the Liberal leadership vote on Sunday, about two months after Trudeau announced plans to resign amid pressure over an affordability crisis and threats of a trade war with the United States.

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Carney is taking the reins of the party as Canada-US tensions are soaring following President Donald Trump’s imposition of steep tariffs on Canadian goods.

Canada is also heading into a federal election that must take place by October 20 but could happen sooner.

So what happens now? Here, Al Jazeera breaks down what’s next as Carney takes over from Trudeau as party leader and is set to become Canada’s new prime minister.

Carney wins leadership

Carney overwhelmingly won a leadership race that saw him go up against former Canadian Finance Minister Chrystia Freeland, MP Karina Gould and businessman Frank Baylis.

The economist and former central banker is not a sitting member of the Canadian parliament — known as the House of Commons — and he has never held federal office before.

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Under Canada’s Westminster system of parliamentary government, a person does not need to be elected to serve as prime minister, explained Andrea Lawlor, an associate professor of political science and public policy at McMaster University in Ontario.

Instead, the prime minister must be someone who “can command the confidence of the House”, Lawlor told Al Jazeera.

In practice, this has typically meant the prime minister is the leader of the party with the most seats in Parliament or who can form a government. The Liberals currently have a minority government.

But while Sunday’s vote made Carney leader of the Liberal Party, he has not yet formally stepped into his role as prime minister.

Trudeau must formally resign

Trudeau, who has been prime minister since 2015, announced in January that he would step down as Liberal leader and prime minister after his successor was chosen.

Now that Carney has been selected as the new leader, Trudeau must formally resign.

That involves going to the governor general, the official who holds the largely symbolic role of upholding the Canadian governmental system.

“For the transition of power to take place, the prime minister must inform the governor general of their intention to resign and advise them about who they think their successor should be,” explained Daniel Beland, a professor at McGill University in Montreal.

“It’s only after the governor general accepts the resignation of the prime minister that they can appoint a successor, typically by acting upon the advice of that outgoing prime minister.”

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It is unclear exactly when Trudeau plans to go to the governor general.

Speaking to reporters on Thursday of last week, the outgoing prime minister said, “I look forward to a transition to my duly elected successor in the coming days or week.”

Carney invited to form gov’t

Once the governor general accepts Trudeau’s resignation and his recommendation, Carney will then be asked to form a government.

CBC News reported last week that preparations for the prime ministerial transition process — from Trudeau to his successor as Liberal leader — were already quietly under way.

One of the top questions will be the size and makeup of Carney’s cabinet.

Several members of Trudeau’s government, including Foreign Minister Melanie Joly and Finance Minister Dominic LeBlanc, had endorsed Carney’s bid for the Liberal leadership and are expected to be part of his future cabinet.

Whenever Carney is officially sworn in as prime minister, he would speak on behalf of the Liberal minority government.

Joining the House of Commons

After taking up the top post, Carney would then be looking to quickly get his own seat in Parliament, Lawlor said — both to boost his own political legitimacy and more easily carry out his work.

“Much of what we expect as Canadians is for our prime minister to be a legitimated member of the House through election and to face the opposition across the aisle,” she told Al Jazeera.

Carney can seek to join Parliament either through a so-called by-election — a special election to fill a single seat — or a general election.

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“I think it will depend on what’s the internal calculus to the party, to either have him run in a by-election or call a general [election],” Lawlor said. “I think a lot that would be dictated by how well he’s doing in the polls.”

The federal election must be held by October 20, but as the party in government, the Liberals can effectively call a vote at any time.

Experts say an early election call appears likely, as the party is riding a wave of increased support due to Trump’s tariffs and Trudeau’s decision to step down.

Opposition parties can also trigger an election by passing a no-confidence vote in the House of Commons. Trudeau suspended Parliament in January when he announced his resignation, and lawmakers are set to return on March 24.

Canada’s Conservative Party and the Bloc Quebecois have said they plan to try to bring down the Liberal government at the soonest opportunity, saying early elections are needed to mount a strong response to US tariffs.

Caretaker government

If an election is launched, Carney and the Liberals will effectively act as a caretaker government.

If the race begins before Carney has a chance to win a parliamentary seat, that opens up new questions and avenues for criticism.

As it stands, because Carney is unelected, he is not yet subjected to rules that govern Canadian lawmakers. That includes requirements to disclose financial holdings and potential conflicts of interest.

Opposition MPs had called on Carney to voluntarily comply with those rules, even before he formally won the leadership.

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Conservative legislator Michelle Rempel Garner also raised questions last week when it was reported that Joly, Canada’s foreign minister, had briefed Carney on US tariffs.

“I’m a sitting Parliamentarian. The Liberal government shut down Parliament, but some random nobody gets a briefing and elected MPs don’t?” Rempel Garner said in a post on X.

Lawlor also noted that Carney will “need to obtain certain security clearances in order to access information about border integrity or Canadian defence” when he becomes prime minister.

“It’s not clear what we do in these scenarios, which is why it becomes so important for a party leader to contest a seat and be a member of the House,” she said.