As political processes go in Ottawa, the introduction of the federal budget for the upcoming year is one of the biggest and it takes on extra importance during a minority government due to its potential to trigger an election.
Finance Minister François-Philippe Champagne is set to table the 2025-2026 budget in the House of Commons just after 4 p.m. ET on Tuesday following the close of trading on the financial markets.
The budget acts as the government’s plan for spending, financial priorities, and funding social policies and programs. Before it’s introduced, a wide range of consultations are held with MPs, ministers, government staff and various stakeholders across the country.
“There’s obviously a triage exercise required to try to narrow down the number of possible proposals and identify those which are most consistent with the government’s overall themes and agenda, and over the course of several months those measures are refined, decisions are taken on which ones to proceed with and which ones to to either reject or defer,” Brian Ernewein, a senior national tax advisor with KPMG Canada, told CityNews.
“There has to be a reckoning or an accounting of the cost of measures, or the revenues measures might produce, in the case of tax changes, tax increases, and that has to feed into the budget picture and the debt and deficit calculation.”
When the budget was introduced in April 2024, it had $535 billion ($11.5 billion of that was new spending) in expenditures and a $39-billion deficit. Fast-forward to December when an updated economic statement (projecting a $48-billion deficit) was overshadowed by the sudden resignation of former finance minister Chrystia Freeland.
Since the spring election, opposition party members have been calling for Prime Minister Mark Carney’s government to table a budget and to be more transparent about the state of the country’s finances.
Federal budget needs majority of votes in House of Commons to avoid election
Under Canada’s parliamentary system, the federal budget is deemed a matter of “confidence.” If it doesn’t receive majority support in the House of Commons in a confidence vote, the government of the day is expected to resign or make a request to the governor general to dissolve the House.
In 1979, former prime minister Joe Clark and his short-lived minority Progressive Conservative government were defeated in such a vote. Opposition parties, which combined held a majority in the House, voted in favour of an amendment saying they didn’t approve of the budget. An election followed soon after and the Liberal Party of Canada returned to power in 1980 with a majority government.
Under the current party standings, the Liberals have 169 MPs — just three shy of a majority government — and that means the Carney government needs some form of support from the opposition.
If the Conservative Party of Canada (144 MPs), the Bloc Québécois (22 MPs), the NDP (seven MPs) and Green Party of Canada leader Elizabeth May all united to oppose the budget, the government would fall.
To survive the prospect of going to an election, the Liberals need to get support from at least three opposition MPs.
If no one on the opposition wants to back the government, at least six members would need to abstain or be absent from the vote in order for the budget to pass. However, it’s harder to justify being absent from voting with the ability for MPs to vote electronically anywhere in Canada.
Speech happening Tuesday, final vote set for mid-November
The first step of the budget process involves tabling the budget. Champagne will make a speech inside the House of Commons that will likely outline broad themes and decisions contained in the document.
Current parliamentary procedures call for four days of debate after the day the budget is introduced.
The House of Commons sitting calendar means there would be debate days on Nov. 5, 6, 7 and 17 (the House is off the week of Nov. 10 due to Remembrance Day). The vote is set to happen on Nov. 17, which gives the governing Liberals some additional time to try to shore up support if needed.
Where to find more information on the 2025 Canada budget
Details won’t be available until Champagne starts speaking in the House of Commons, but CityNews will be in a budgetary lock-up throughout the day on Tuesday.
CityNews will have extended coverage on citynews.ca, CityNews 24/7 and local news radio affiliates.
With files from Xiaoli Li, Cormac MacSweeney and Glen McGregor
