Canadian Prime Minister Mark Carney faces a critical test on Monday when Parliament votes on his first budget, with a defeat potentially triggering a second federal election in less than a year.

Carney’s Liberals are a few seats short of a majority in the 343-seat House of Commons, meaning they will need some opposition MPs to support the budget or abstain from voting. The vote is scheduled for 6:45 p.m. Eastern Time (23:45 GMT).

On paper, Carney appears safe as the left-leaning New Democrats, who lost nearly three-quarters of their seats in the April election that brought Carney to power, have indicated they will not bring him down. The party is low on funds and lacks a permanent leader.

The Globe and Mail reported on Monday that a senior Liberal source expected the government to narrowly win the vote. If it loses, Carney could either call an election or negotiate a deal with the New Democrats, whereby they would support him in exchange for increased social spending.

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

Recent polls suggest the Liberals would retain power if an election were held now. The right-of-centre Conservative Party, which lost the April election, is facing internal divisions, with leader Pierre Poilievre due for a performance review in January.

Carney’s budget, an economic plan for the coming fiscal year, proposes doubling the fiscal deficit to counter U.S. tariffs and fund defence and housing programmes. While it includes cuts to the federal workforce, the budget does not feature the level of austerity some had feared.

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