Canadian Parliament narrowly passes Prime Minister Carney’s first federal budget

Canada’s parliament narrowly approved Prime Minister Mark Carney’s first federal budget, allowing his minority Liberal government to avoid a snap election.

The fiscal plan, which lifts Canada’s deficit forecast to C$78 billion ($55.3 billion; £42.47 billion), was approved by Opposition MPs, including Green Party leader Elizabeth May.

Many opposition lawmakers harshly criticized the fiscal package, the second largest in history. The plan passed with a vote of 170 in favor and 168 against.

Carney, a former central bank governor of Canada and the United Kingdom, argued the budget was a “generational investment” to help Canada strengthen its economy.

The vote is crucial for Carney’s Liberal government, which is two seats short of a majority.

This means that if all 169 Liberal MPs vote in favor, the budget will require the support of two Opposition MPs, or four Opposition MPs to abstain.

Two NDP MPs abstained, along with House Speaker Francis Scarpaleggia, who would have abstained if the votes were tied. Conservative MPs Shannon Stubbs and Matt Jeneroux, who announced their resignation earlier this month, also abstained from the vote.

The support of Green Party leader Elizabeth May has also proved crucial. May told reporters she voted in favor of Carney’s pledge to support Canada’s climate goals.

“Without what I heard from the prime minister today, I would have voted no,” she said.

Both Pierre Poliyev’s Conservatives and Quebec’s nationalist Bloc Québécois voted against the budget, accusing Carney’s government of failing to address affordability issues.

Pliyev called the budget a “credit card budget” and argued it would do little to address the cost-of-living crisis.

“The Prime Minister’s costly deficit is betting our future on the national credit card,” Pliyev told the House of Commons ahead of the vote on Monday.

Liberal MP Nathaniel Erskine-Smith, who supported the budget, also raised his own concerns, saying that while the plan provides much-needed investment, it falls short in addressing Canada’s housing crisis and hinders progress on climate action.

The budget proposes $140 billion in new spending over the next five years “to enhance Canada’s productivity, competitiveness and resilience.”

That includes funding to update ports and other trade infrastructure with the goal of doubling Canadian exports to non-U.S. markets over the next decade.

In addition, the program provides direct support to businesses harmed by U.S. tariffs on Canadian goods, measures that the Carney government expects will attract C$1 trillion in private sector investment over the next five years.

To balance the fiscal plan, Carney proposed cutting the federal workforce by 10% over the next few years, a move that drew strong criticism from public-sector employees who warned that a streamlined federal workforce would slow down government operations.

The budget was first proposed in early November and has already passed two votes.

The debate over the issue has been partly overshadowed by partisan fighting between Carney’s Liberal and Conservative opposition, with the Conservatives losing caucus to the Liberals shortly after the fiscal plan was tabled.

Nova Scotia’s Chris d’Entremont said he defected because of what he considered Conservative Leader Pierre Poliyev’s “negative” political style. He added that the Liberal budget “aligns with voters’ priorities.”

Another Conservative MP, Matt Genux of Alberta, later resigned from parliament the same week, saying he did so to spend more time with his family.

The departures raised questions about Pliyev’s leadership. On Wednesday, he told reporters he planned to remain leader.

“My plan is to continue to lead and be the only leader fighting for an affordable Canada where our hard-working people can afford homes and food,” Polijevr said.