Canada’s Prime Minister Mark Carney has put forward his first federal budget, which lays out an ambitious plan to transform Canada’s economy and deal with the challenge of US tariffs.<\/p>\n
Billed an “investment budget” by the government, the fiscal plan increases Canada’s deficit to C$78bn ($55.3bn; \u00a342.47bn), the second largest in history. <\/p>\n
The spending is offset by plans to attract C$1tn of investment into Canada over the next five years, with the federal government arguing more restrained spending would eliminate “vital social programmes” and funding for Canada’s future. <\/p>\n
The budget does outline cuts, however, including slashing the size of the federal workforce by some 10% in the coming years. <\/p>\n
The budget was presented by Canada’s finance minister, Fran\u00e7ois-Philippe Champagne, in the House of Commons late on Tuesday afternoon. <\/p>\n
In his budget speech, Champagne warned that Canada is facing “a time of profound change” and that “bold and swift action is needed” to ensure the country prospers.<\/p>\n
Peppered throughout the budget are references to uncertainty and the need for protectionist measures as a result of US tariffs on Canada. President Donald Trump has placed a broad 35% levy on Canadian goods not covered by an existing free trade agreement, and has tariffed specific sectors like steel, aluminium and automobiles. <\/p>\n
These levies, enacted earlier this year, have already led to Canadian job losses in those sectors, and business leaders have warned of a chill on investment in Canada due to trade uncertainty. <\/p>\n
To counter this, the budget proposes spending of C$280bn over the next five years “to strengthen Canada’s productivity, competitiveness, and resilience”. <\/p>\n
These include updating ports and other trade infrastructure with the goal of doubling Canadian exports to non-US markets over the next decade, as well as direct financing to support firms impacted by tariffs.<\/p>\n
The fiscal update also outlines a plan to boost Canada’s competitiveness, with the goal of making Canada a more attractive place to do business than the US.<\/p>\n
Rebekah Young, the head of inclusion and resilience economics at Scotiabank, said the budget lays out a plan to reduce timelines and smooth regulatory hurdles with the hopes that it will boost private investment in Canada over the years.<\/p>\n
But she cautioned that parts of the budget might be a hard sell for Canadians struggling immediately with the cost of living.<\/p>\n
“They’re going to open this budget and not see any new (supports),” she said. <\/p>\n
And while the budget delivers on its promise of generational spending, Ms Young said it remains to be seen if it will be as “transformational” as Carney hopes.<\/p>\n
“We want to unlock a trillion dollars based on this investment here. A lot has to happen to get to that trillion,” she said. <\/p>\n
On defence, the budget pledges nearly C$82bn over five years\u2014the largest funding in decades\u2014putting Canada in line with its Nato commitment to spend 2% of its gross domestic product (GDP) on its military by this year.<\/p>\n
The Carney government is also betting big on AI, proposing nearly C$1bn to boost integration and use of the rapidly growing technology, including in government operations.<\/p>\n
Carney warned Canadians ahead of the budget of “sacrifices”. Among them is a reduction of the size of the federal government that would result in 40,000 job losses by 2029. International aid is also slated to be cut to pre-pandemic levels. <\/p>\n
Immigration targets have been lowered slightly over the next three years to “stabilise” new admissions to the country, including a significant cut to student visas.<\/p>\n
The budget will need to be passed by Canada’s parliament before it’s implemented. Carney’s Liberal government is three seats shy of a majority, meaning it will need the support of other parties to enact its fiscal plan. <\/p>\n
Failure to pass the budget could risk a federal election. <\/p>\n
Conservative opposition MPs have criticised the budget for increasing Canada’s deficit while doing little to address affordability for Canadians. <\/p>\n
Yves-Francois Blanchet, the leader of the separatist Bloc Qu\u00e9b\u00e9cois party, said his caucus does not see how they could support the budget. <\/p>\n
Meanwhile, members of the left-leaning New Democratic Party said they will take the time to study it, but have criticised planned public sector cuts. <\/p>\n
With the projected larger deficit, Carney’s fiscal plan maintains that Canada’s still has the lowest deficit-to-GDP ratio in the G7, behind only Japan.<\/p>\n","protected":false},"excerpt":{"rendered":"Canada’s Prime Minister Mark Carney has put forward his first federal budget, which lays out an ambitious plan…\n","protected":false},"author":2,"featured_media":244187,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-244186","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/244186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=244186"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/244186\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/244187"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=244186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=244186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=244186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}