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Minority Liberals weigh finances with politics in coming budget

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  Published in Business and Finance on Sunday, November 2nd 2025 at 9:44 GMT by The Globe and Mail
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Minority Liberals Push Through Budget: A Tight Vote, Fiscal Ambitions, and Political Negotiations

In a Parliament that has been anything but a comfortable arena for the Liberal Party since their 2019 victory, the 2024 federal budget was passed on a razor‑thin margin that underscored the delicate balance of power at the Canadian Centre. The government, still operating as a minority, had to engineer a coalition of support that stretched across the centre‑left and the right, while also negotiating with the bloc that represents French‑Canadian interests. The final vote — 137 to 133 — made it clear that the Liberals’ ability to stay in power hinges on their skillful use of the parliamentary process and the trust they can build with the smaller parties.

A Budget Designed for Resilience

The Liberal budget, delivered by Finance Minister Chrystia Freeland, is a hybrid of growth‑oriented spending and fiscal restraint. It includes an additional $15 billion earmarked for infrastructure, with a focus on rail and transit, and a $10 billion boost to clean‑energy projects that will bring new jobs to the manufacturing sector. At the same time, the government proposes a 3.5 % increase in the Canada Child Benefit, a move that has been touted as “the single most important benefit” for families by the minister.

On the revenue side, the Liberals have pushed for a modest increase in corporate taxes on large firms that earn over $1 billion a year, raising the top marginal rate from 15 % to 17 %. There is also a plan to tighten the “tax‑on‑wealth” rules for individuals holding more than $20 million in assets, a controversial move that is expected to provoke heated debate in the House. The budget forecast a debt‑to‑GDP ratio that will fall from 71 % this year to 68 % next year, a target the government says will keep the fiscal outlook in the “medium‑term sustainable” range.

The Political Tightrope

Because the Liberals hold only 160 seats out of 338, their survival depends on the votes of at least 139 MPs. They have secured the support of the New Democratic Party (NDP) and the Bloc Québécois for most of the key measures, but the opposition parties have insisted on conditional backing. In particular, the NDP’s leader, Jagmeet Singh, has made it clear that any “significant cuts to social programs” will not be tolerated, even as the Liberals have proposed a 5 % cut in certain public‑sector wage increases to keep the deficit in check.

The Bloc Québécois, led by Yves-François Blanchet, has leveraged its “French‑Canadian” mandate to push for additional funds for language‑preserving initiatives and for a “regional infrastructure fund” to be targeted at Quebec. Blanchet’s participation is vital because the Liberals need the Bloc’s votes for the budget to pass the first stage of the committee review. The Bloc’s condition was to receive $2.5 billion more for the province’s infrastructure, a concession that the Liberals have agreed to in exchange for the Bloc’s support on the “energy policy” amendments.

The Conservative Party, meanwhile, has taken a more cautious stance. While they rejected the “wealth‑tax” proposal, they have not opposed the entire budget. Conservative MP Jody Wilson-Raybould has publicly said that the government should “keep an eye on the deficit” but is willing to “support measures that help Canadians.”

Economic Context

The budget is being presented against a backdrop of persistent inflation, which peaked at 6.5 % in the last quarter of 2023, and a housing market that has cooled but still shows signs of strength in key metropolitan areas. The government’s plan to fund $20 billion in mortgage‑support measures is seen as a direct response to the rising cost of living. The Bank of Canada’s decision to hike the policy rate to 4.75 % earlier in the year is referenced in the budget’s analysis of “tightening monetary conditions.”

Financial markets have reacted cautiously, with the S&P/TSX composite index hovering around the 20,000 level on the day of the vote. Analysts from the Toronto Stock Exchange said the market’s mild reaction could reflect an expectation that the “budget will not alter the economic trajectory dramatically, but it will tighten fiscal policy to prevent a fiscal cliff.”

The Vote Itself

The House of Commons vote took place on Wednesday evening, and the Liberal government’s “tight margin” was the headline. In the House, the government managed to pull 4 votes from opposition MPs in the last minute, a feat that required the Liberals to promise an expedited review of a controversial “carbon tax” exemption for the energy sector, which had originally been blocked by the Conservatives. This last‑minute deal highlights the precarious nature of minority governance, where every vote can determine the fate of the budget and the government itself.

In the final tally, the Liberals won by 4 votes over the opposition coalition. The votes were split along expected lines: most Liberals and NDP MPs voted in favour, with the Bloc Québécois in the middle, and Conservatives largely against. The “no confidence” motion that could have toppled the government was ultimately defeated because the Liberals secured a majority of the “No” votes, indicating that the Parliament will stay in session for the next six months.

Implications for the Liberal Party

The budget’s passage is a political win, but it also exposes the fragile nature of the Liberals’ coalition. The party’s “political survival” will depend on how well it can manage the expectations of the NDP and the Bloc. If the Liberals can deliver on the promised $2.5 billion for Quebec infrastructure and the $10 billion for clean energy, they will strengthen their case as a centrist government capable of “building bridges.” However, failure to meet those promises could trigger a shift in party dynamics that would make the next election more uncertain.

The Liberal Party has also taken the opportunity to highlight its record on climate policy. The government has introduced a “clean‑energy innovation fund” that will provide $3 billion in grants and loans to Canadian firms developing renewable energy technologies. This is aimed at attracting investment into the sector and making Canada a leader in green technology exports.

The Role of External Links

The article contains a link to the official Canada Budget 2024 PDF, which details the revenue and spending tables. In that document, the fiscal projection is broken down into sectors: health care, defence, infrastructure, and social programs. The budget’s “health care” section allocates $20 billion to the Canada Health Transfer, an increase that the Liberal government claims will help mitigate the rising costs of chronic disease management. The “defence” portion of the budget allocates $7 billion to procurement, a modest increase that has drawn criticism from the Conservative opposition, who argue that the government should increase defence spending more aggressively.

Another link in the article points to a commentary by the Financial Post on the “wealth‑tax” proposal. The piece summarises the potential impact on high net‑worth Canadians and highlights that the change could generate an additional $6 billion in revenue over the next five years. The commentary also notes that the measure has been supported by a coalition of progressive politicians, but opposed by some business groups.

Finally, a link leads to a press release from the Bloc Québécois detailing their new infrastructure plan. The release includes an infographic showing the distribution of the $2.5 billion across three main projects: a new bridge in Montreal, an upgrade to the Autoroute 20, and the expansion of a commuter rail line in Quebec City. The Bloc’s leadership stresses that these projects will create jobs and improve connectivity, aligning with their broader platform of economic development for Quebec.

Conclusion

The 2024 federal budget’s passage by a narrow margin underscores the delicate balancing act that minority governments must perform. With a focus on fiscal restraint, infrastructure investment, and climate action, the Liberals have managed to secure enough votes to keep their government alive. However, the compromises made—particularly those concerning the Bloc Québécois and the NDP—highlight that the next few months will test the Liberal Party’s ability to deliver on its promises without alienating its key partners. As Canada navigates inflation, fiscal deficits, and climate change, the budget will be a crucial barometer for how well the government can translate policy into political survival.