TD Securities strategists discuss Canadian by-elections in three federal ridings and notes that Prime Minister Carney’s Liberals are close to securing a majority in Parliament. They highlight that a slim Liberal majority is unlikely to alter the near-term fiscal outlook materially, but it would strengthen Carney’s mandate and lower the probability of a snap election in 2026.

Carney majority seen with limited fiscal impact

"PM Carney is sitting on the cusp of a majority government ahead of Monday's by-elections, which will take place in 3 federal ridings across Ontario and Quebec."

"Carney's Liberals command 171 of 343 seats in the House of Commons after recent defections from the opposition, and poll aggregators show a sizable lead for the Liberals in University—Rosedale and Scarborough Southwest which should land them a majority in Parliament."

"We do not expect a slim Liberal majority to have significant impacts on the near-term fiscal outlook; the Liberal government was able to pass its last budget without much difficulty, and majority governments don't always translate to less fiscal restraint."

"However, Carney should have a stronger mandate coming out of these by-elections which reduces the likelihood of a snap election in 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)