Canadian prime minister Mark Carney and his finance minister are hitting the road to sell the federal budget to Canadians, which was presented on Tuesday.
The massive budget focuses its spending on defense, housing and infrastructure designed to boost trade. But Carney’s minority government will need some opposition members to vote for it, or abstain, to avoid a Christmas election.
In promoting his roughly $580 billion budget Wednesday, Carney said its aim is to address the uncertainty of global trade and the effects of U.S. tariffs on the Canadian economy. Carney said the country is facing what he described as a hinge moment, when the future might hang in the balance, and Ottawa’s actions must be decisive.
“Technological change is accelerating. The world is more divided and dangerous,” he said. “And the global trading system is literally being re-wired, threatening jobs and businesses under a cloud of uncertainty.”
Carney said these profound changes demand a bold response, as his first budget as primer minister provides it.
“We presented a clear picture of what’s happening to our economy and what’s being taken from us,” Carney said. “It’s estimated that U.S. tariffs and the uncertainty that they’re creating will cost us around 1.8 percent of our GDP. That’s about $50 billion lost from our economy or the equivalent of 1,300 dollars for every Canadian.”
Carney added, in his words, while they could not control what Washington decides, Canadians can decide what happens domestically, and they could get that money back and more.
The budget is titled ‘Canada Strong’ and features several major spending priorities. Among them, $141 billion in new spending over the next five years. That includes nearly $82 billion for defense, which will bring Canada closer to NATO’s goal of 5 percent of the GDP.
There will be $51 billion for infrastructure to stimulate development. They are major projects, some of which have already been announced, such as high speed rail, new ports, carbon capture and storage. There’s a major push for a plan to buy Canadian, and more money for housing.
“The world is undergoing a series of fundamental shifts at a speed, scale and scope not seen since the fall of the Berlin Wall. We will build here at home, stronger industries, nation building infrastructures and millions of more homes for Canadians,” said finance minister François-Philippe Champagne.
To offset some of the spending, the Carney government will cut $60 billion through cuts and saving, including slashing the federal bureaucracy by nearly 40,000 jobs, mainly through buyouts and attrition.
Immigration numbers will also get cut, a 50 percent reduction of temporary residents such as students and foreign workers.
Still, that leaves a projected deficit for 2025-2026 of about $78 billion. Opposition parties say that’s too much.
“On behalf of all the Canadians who can no longer afford to eat, heat or house themselves because of Liberal inflation, we Conservatives cannot support his costly Liberal budget,” said Pierre Poilievre, the leader of the official opposition Conservatives.
The leader of the separatist Bloc Quebecois, Yves-François Blanchet, also said he could not support the budget since it failed to include any of his party’s demands for more spending on seniors and on Quebec.
And there’s not much in the budget for average Canadians. Tim Cestnick, a tax expert, says there are some measures to help but for the most part the government spending plans are more geared toward big ticket investment driving items.
“If you’re the average Canadian, and you’re looking to grab onto something in this budget and celebrate it, I think you’re going to be a little disappointed here,” Cestnick said. “It really seems to be a budget that’s more focused on trying to promote business investment and improvements in productivity in the business sector."
There will be a vote on the budget. Carney’s minority Liberals were three votes shy, but on budget day some political drama played out when a Conservative member crossed the floor to join the Liberal party. That puts Carney only two votes short.
With the Conservatives and the Bloc saying they will not support it, that leaves the six members of the New Democrats. They haven’t said whether they will back the budget.
