A protracted trade war with the United States and a weak economy forced Mark Carney to run a deficit of billions in the first federal budget.
The spending plan, titled “Canada is strong” is significant new defense spending, a reduction in the civil service and “national council investments” that will reshape the nature of the country’s economy.
“The world is undergoing a series of fundamental shifts of speed, scale, and scope not seen since the fall of the Berlin Wall,” the opening pages of the budget state. “It’s not a transition. It’s a decay – a cessation of cessation for a short period of time.”
Before revealing his economic outlook for the country, Carney reiterated the need for Canada to look for new markets as US keyings flee.
As part of the big spending plan, the Canadian government is increasing defense spending by C$84bn (US$59bn) over five years to prevent an “increasingly dangerous world”. Carney previously promised to meet NATO’s goal of spending 3.5% of gross domestic product on defense, but the spending document does little to explain what Canada’s timing is.
The Budget attracts a reduction in the Federal Workerforce in 2028-29 that will bring the Civilian to a size similar to what happened in 2021. The government’s plans are changes – to achieve the goal.
But the costs related to the capital expenditure necessary to avoid a recession are laid out in the document.
In the previous fiscal update in December, the federal shortfall was set at $42.2bn in 2025-26. But the Liberal plan will run a deficit of C$78.3BN in 2025-26. The government says it aims to reduce the federal deficit by C$56.6bn by 2029-30.
Conservative leader Pierre Poilivre quickly posted on social media that Carney had “almost double [former prime minister Justin] Trudeau’s deficit and kept liberal taxes on groceries, work, energy, and homebuilding”.
Despite criticism from opposition parties that the budget is too much to spend or not enough, a conservative lawmaker has announced that he will join the Liberal Caucus.
“Prime Minister Mark Carney offers the path with a new budget that hits the priorities that I heard in Crisucture,” said the move in Crisucture, “said the participation in Crisucture.
The floor is a key victory for Carney’s liberals, who preside over a parliamentary minority. Until Tuesday, the Party needs the support of three legislators from other parties to pass this budget and avoid an election. With D’Entremont now sitting with the liberals, that number drops to two.
Parliament is expected to debate the budget for four days, before voting on the spending plan on 17 November.