Prime Minister William Lyon Mackenzie King's Liberal Party was invited to form a minority government.

Governor General Baron Byng of Vimy offered the Conservatives under Meighen a chance to form government.

The previous federal election in 1921 had seen Mackenzie King's Liberals fall narrowly short of winning a parliamentary majority, with Arthur Meighen's Conservatives falling to being the third-largest party, and the new Progressive Party, which had nominated candidates for the first time that year, held the balance of power.

King was able to rule with the tacit support of the Progressives, and was not facing a statutory federal election until December 1926; however, a budget proposed in September 1925 by finance minister William Stevens Fielding was unexpectedly voted down in parliament, obligating Mackenzie King to resign as Prime Minister and recommend to the Governor General, Baron Byng of Vimy to hold a new election (theoretically King could have recommended that Byng allow either Meighen or Progressive leader Robert Forke to form a government, but the Conservatives were far short of the number of MPs required to form a stable government, and Forke had no interest in being Prime Minister).

King asked a Liberal Member of Parliament from Prince Albert, Saskatchewan, to resign so that he could run in the resulting by-election.