Prime Minister Mark Carney is preparing for his October budget while trying to avoid causing public alarm. Earlier this month, he described the upcoming budget as one of “austerity and investment.” This characterization has raised concerns, particularly in Quebec, where nearly twice as many people view austerity negatively compared to those with positive impressions. A recent poll indicated that across Canada, 23% of respondents had a positive view of austerity, while 57% were neutral or mixed, and 20% held negative views.

Carney is facing a communications challenge. He aims to inform Canadians that the budget will not be generous or family-friendly, but he wants to avoid inducing panic. On Sunday, he adjusted his messaging, stating that the deficit for October will be “substantial,” which he defined as larger than last year’s figure. The deficit for 2024/25 was previously revised upward from $39.8 billion to $46 billion.

The Prime Minister outlined several factors contributing to the anticipated deficit, including the ongoing tariff war, support for affected workers, increased defense spending, and new initiatives like the Canada Homes announcement made in Ottawa. He has also protected transfers to individuals and provinces from cuts, as well as programs such as child care, pharmacare, and dental care.

The Liberal platform had projected $35 billion in new spending for this fiscal year, with an additional $9 billion earmarked for defense. However, the forecast for $20 billion in tariff revenue may fall short due to the cancellation of retaliatory duties on U.S. imports. Other revenue sources are also expected to be lower than anticipated, partly due to a $4 billion income tax cut and the repeal of the consumer carbon tax and higher capital gains tax inclusion rate.

The C.D. Howe Institute has suggested that the deficit could be significantly higher than the projected $46 billion for 2024/25, potentially even doubling that amount. As the House of Commons reconvenes, Carney appears to be in a strong political position. Recent polling indicates that the Liberals maintain a healthy lead, with Ipsos reporting that 60% of voters approve of the government’s performance, a nine-year high. Notably, one in three Conservative voters also expressed approval.

Despite criticism from some quarters, including suggestions that Carney has abandoned progressive values, the NDP's current disarray leaves few alternatives for left-leaning voters. Carney is also polling favorably among centrist voters. A recent survey by Spark Advocacy showed an eight-point gap between the parties, but when asked whether they would prefer a Carney-led government or one led by Conservative leader Pierre Poilievre, the gap widened to 22 points in favor of Carney.

Poilievre acknowledged the shifting sentiments among his supporters in his address to the Conservative caucus on Sunday. He stated that Conservatives want the country to succeed, a departure from his previous rhetoric that suggested Canada was broken. He noted that Conservatives had supported the government’s middle-class tax cut and the One Canadian Economy Act in the spring, but emphasized the need to compare Carney’s promises with actual results. “Do the words match the deeds?” he asked.

As the fall session of Parliament began on Monday, the atmosphere in the House of Commons was notably friendly. Poilievre even thanked Carney for calling a prompt by-election in Battle River-Crowfoot, which allowed him to return to Parliament, joking, “I wonder if he might regret that decision one day.” He pressed Carney on when he plans to align his promises with tangible changes.