Canada’s Carney faces crucial vote on budget that could trigger election

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OTTAWA (Reuters) -Canadian Prime Minister Mark Carney faces a crucial test on Monday when Parliament votes on his first budget, where a defeat could trigger a second federal election in less than a year.

Carney’s Liberals are a handful of seats short of a majority in the 343-seat House of Commons, which means they either need some opposition legislators to back the budget or abstain. The House is due to vote at 6:45 p.m. Eastern Time (2345 GMT).

On paper Carney looks to be safe given that the left-leaning New Democrats, who lost almost three quarters of their seats in the April election that brought Carney to power, last month indicated they would not bring him down. The party is short of funds and does not have a permanent leader.

The Globe and Mail newspaper on Monday cited a senior Liberal source as saying the government expected to win the vote narrowly. If it lost, Carney could either call an election or try to come to a deal with the New Democrats whereby they would keep him in power in return for increasing social spending.

Carney’s predecessor, Justin Trudeau, struck such a deal with the New Democrats that lasted two-and-a-half years.

Recent polls suggest that if an election were held now the Liberals would retain power. The official right-of-center opposition Conservative Party is dealing with internal dissent after the April election loss and leader Pierre Poilievre faces a formal review of his performance in January.

Carney’s budget, an economic blueprint for the next fiscal year, proposed doubling the fiscal deficit to counter U.S. tariffs and fund defence and housing programs. While it proposed reducing the number of federal government employees, the budget did not have as many austerity measures as some had feared. 

(Reporting by David Ljunggren, editing by Deepa Babington)