Members of Parliament are back in Ottawa this week, setting the stage for what could be one of the most intense fall sittings in years. Prime Minister Mark Carney is already bracing the country for a bigger deficit than last year, promising a budget in October that splits capital spending from operating costs and pledging to balance the latter within three years. The last fiscal update pegged the 2025-26 deficit at $42.2 billion, with Liberal campaign promises and the weight of U.S. tariffs threatening to push it closer to $60 billion.
Carney’s government will also face relentless questions about the lack of progress on a trade deal with the United States. Despite frequent calls between Carney and President Donald Trump, deadlines have come and gone without resolution, and Canada’s economy is now officially in recession according to Oxford Economics. Steel, aluminum, lumber, and auto sectors remain under pressure, and recent tensions with China have Prairie farmers and Atlantic fishers worried about their livelihoods.
Adding to the political drama, Conservative Leader Pierre Poilievre returns to the Commons after a byelection win in Alberta, ready for his first Question Period showdown with Carney. His campaign focused heavily on crime, and he plans to table legislation toughening bail conditions for repeat offenders and those accused of serious crimes. Carney’s Liberals are preparing their own bail reform bill, meaning Canadians could see two competing visions for criminal justice debated this fall.
With another minority parliament in place, every vote will count. The Liberals will need support from the Bloc Québécois, Greens, or the reduced seven-member NDP caucus to advance key bills, including their upcoming budget. Bloc Leader Yves-François Blanchet has kept the door open to cooperation but has been critical of Liberal fiscal management, leaving the government to build support bill by bill.
This session promises a volatile mix of fiscal battles, high-stakes negotiations, and heated debates, with Carney and Poilievre locked in what could become one of the defining rivalries of Canadian politics.