Carney’s first budget won’t bring down the government, but the second one might

If anyone believes the Liberal government in Ottawa could fall after it releases its first budget under Prime Minister Mark Carney, they’re dreaming.

The political arithmetic, and the political will, simply aren’t there for the Liberals — who have a minority government — to lose a confidence vote on the budget, expected Nov. 4.

That’s because no one wants an election right now, especially the NDP and the Bloc Québécois. Even the Conservatives, who might claim they’re eager to bring down the government, probably don’t want one either, just seven months after the last contest in April.

The math alone makes a Liberal defeat unlikely. The party is just three seats shy of a majority, meaning it won’t take much to cobble together a few votes from the opposition benches to pass a budget.

The politics are even clearer: most opposition parties are simply not in a position to fight an election right now.

That’s especially true for the NDP, whose former leader Jagmeet Singh stepped down on election night after losing his seat and watching the party’s official party status disappear.

The NDP is holding a leadership convention in March in Winnipeg. There’s no way it wants an election before then and will do whatever is necessary to avoid one, even if it means holding its nose and voting for a Liberal budget.

The NDP may extract a few minor concessions from the Liberal government in exchange for supporting its fiscal blueprint. But it won’t need much.

They don’t need another formal confidence-and-supply agreement like the one they signed before the last election. They can do it informally, vote by vote, using their limited leverage.

That’s usually how minority governments — which typically last in the neighbourhood of 18 to 24 months — work.

Opposition parties need time to rebuild their war chests following an election. They need time to regroup, forge new political strategies and, in some cases, elect a new leader.

The Bloc Québécois will likely be playing a similar game. Party Leader Yves-François Blanchet has no incentive to trigger an election at this time. His party is strong in Quebec, but its influence depends on the careful balance that comes from minority government politics.

The Bloc can use its votes strategically to advance Quebec’s interests, without risking the uncertainty of a general election.

If the Liberal budget includes even a handful of measures that appeal to Quebec — additional provincial transfers, infrastructure funding or new cultural investments, for example — Blanchet will have the cover he needs to justify supporting the budget.

And then there’s the Conservative party.

Leader Pierre Poilievre and the Conservatives will almost certainly vote against the Liberal budget. That’s a given. But everyone knows their “no” vote will be purely symbolic. They can’t topple the government on their own.

The more interesting question isn’t whether the Liberals will survive a confidence vote — it’s what their next budget will look like, and how they’ll confront a worsening fiscal picture.

The federal deficit continues to climb. Debt levels are higher than ever. Ottawa has been borrowing heavily since the pandemic and shows little sign of tightening its belt.

Servicing that debt has become one of Ottawa’s largest annual expenses. And with interest rates remaining elevated, those costs aren’t coming down any time soon.

So far, the bond rating agencies have stayed quiet. They haven’t downgraded Canada’s credit rating, largely because the economy remains relatively strong and because, compared to other G7 nations, the federal government’s debt-to-GDP ratio still looks manageable.

But that patience has limits.

If the Carney government continues to rack up deficits without a credible plan to balance the books, that could change quickly. A credit downgrade would make it more expensive for the federal government to borrow money, which would, in turn, push the deficit even higher.

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It’s a fiscal feedback loop Ottawa can’t afford to ignore.

At some point, the Liberals will have to decide whether to keep spending their way through every political problem or finally start showing restraint. Thus far, there’s been little evidence they’re willing to do the latter.

It’s politically easier to announce new programs and sprinkle money across the country than it is to make difficult cuts or freeze spending. But the longer the government avoids the hard choices, the more painful those choices will eventually become.

So yes, the Liberals will survive the fall budget. There will be plenty of political theatre in the days leading up to it: speeches about affordability, warnings about fiscal prudence and speculation about whether the government will fall. But when the votes are counted, the outcome will be predictable.

tom.brodbeck@freepress.mb.ca

Tom Brodbeck
Columnist

Tom Brodbeck is an award-winning author and columnist with over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.

Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.