Carney’s First Federal Budget Passes by Narrow Margin, Averting Christmas Election

Canada avoided a year-end federal election after MPs narrowly approved Prime Minister Mark Carney’s first budget, securing a critical win for the minority Liberal government in one of the tightest confidence votes in recent years.

Canada averted a national political crisis on Monday as Prime Minister Mark Carney’s minority government managed to pass its first federal budget by a razor-thin margin, avoiding a Christmas election and extending the Liberals’ time in office during a period of economic uncertainty.

The final vote saw 170 MPs — all Liberals and Green Party Leader Elizabeth May — support the budget, while 168 MPs opposed it. The outcome was significantly influenced by four abstentions, which lowered the threshold required for passage. Those who abstained included NDP MPs Lori Idlout and Gord Johns, as well as Conservative MPs Shannon Stubbs and Matt Jeneroux.

NDP interim leader Don Davies explained that while his party could not endorse the budget, it also did not wish to thrust the country into an unnecessary election so soon after the last one. Abstaining, he said, was a way to prevent national instability while still signalling disapproval of the document.

On the Conservative side, Jeneroux, who recently announced his resignation following rumours of crossing the floor, did not vote. Stubbs was absent due to ongoing recovery from major jaw and chin surgery. Speaker Francis Scarpaleggia did not need to cast a tie-breaking vote, as the margin — though tight — was clear.

Green Party Leader Elizabeth May, who initially indicated she would vote against the budget, ultimately supported it after Carney personally reaffirmed Canada’s commitment to its Paris Agreement climate targets and environmental protections. She noted that economic pressures stemming from U.S. tariffs also influenced her decision to act “for the country and for the planet.”

The budget itself includes billions in investments for infrastructure, national defence, transportation, and energy projects, accompanied by new incentives for LNG terminals and clean-energy development. It also proposes a significant reduction in the federal public service — approximately 40,000 positions — through attrition, buyouts, and cuts.

Carney’s fiscal plan outlines reduced immigration levels, particularly among temporary residents, and signals a shift away from the emissions-cap policy put forward by the previous government. At the same time, it includes commitments to progressive programs such as permanent funding for the national school food program, continued dental care, the establishment of a Youth Climate Corps, and increased spending on affordable housing.

Conservative Leader Pierre Poilievre strongly opposed the budget, criticizing its projected $78-billion deficit and claiming it would worsen inflation and increase the cost of living. He demanded the government remove the industrial carbon tax and cut spending, conditions the Liberals refused to meet.

Internal concerns within the Conservative caucus about triggering an election — combined with absences and recent defections — may have weakened Poilievre’s hand. The Bloc Québécois ultimately voted against the budget after its demands concerning seniors and Quebec-specific issues were not met.

With the New Democrats deeply indebted and without a permanent leader, the party faced a difficult strategic choice. Their decision to partially abstain helped ensure the government’s survival while avoiding the political risks of an immediate election.

The passage of the budget marks a significant victory for Carney, who has framed the fiscal plan as a “generational investment” designed to steer Canada through escalating trade tensions with the United States and into a more resilient economic future.