We don’t know about you, but we could hardly sleep Monday night knowing there was a fresh budget waiting under the fiscal Christmas tree.
What happened: The Carney government unveiled its first budget yesterday, a plan that calls for $141 billion in new spending as well as $51 billion in program cuts and savings. The $78 billion deficit for the next fiscal year is lower than what some economists had projected.
- The budget includes a major tax cut for capital investments aimed at boosting productivity. The suite of tax measures would make Canada’s corporate tax rate the lowest in the G7.
- The foundation of the budget is a $51 billion infrastructure program to fast-track the construction of transit, hospitals, and ports. The plan also allocates $81.8 billion over five years for the Canadian Armed Forces.
- To help offset those costs, the government plans to slash nearly 40,000 public-sector jobs by the end of the 2028-29 fiscal year, along with billions in program spending cuts.
Why it matters: This is the financial blueprint of how the Liberal government plans to counter volatile U.S. policy, and it represents a break from the Trudeau-era emphasis on big-ticket social programs.
Yes, but: Some economists have raised doubts that the budget goes far enough to offset the effects of U.S. tariffs, while others say it misses the mark on other major economic issues, like housing.
What’s next: Carney appears to have already gotten one Conservative MP to cross the floor, but he’ll still need two more votes from opposition parties to pass the budget. If he can’t get them, Canadians could be headed back to the polls again in a matter of weeks.—LA