Liberals to deliver ‘big, bold’ federal budget on Tuesday as Carney looks to put his stamp on government

Finance Minister François-Philippe Champagne will present the new Liberal government’s first budget on Tuesday, packed with “generational investments” to boost growth and help the country weather the tariff-related economic storm.

While Champagne is the minister in charge of the file, Prime Minister Mark Carney, a former central banker, has a specific interest in financial matters and has personally promised to present a pro-growth budget that will usher Canada into a “new era” and “define our next century.”

“We have the resources to transform our economy from dependency to resilience,” Carney told reporters Saturday after a nine-day trip to Asia to open new markets for Canadian goods and services, now that U.S. relations are at a weak point.

Through a combination of injecting public money into certain sectors and regulatory relief on major nation-building projects, Carney said he wanted to “catalyze unprecedented investment in Canada” and build the country’s reputation as “an energy superpower” given its vast reserves of oil and natural gas and expertise in renewable energy.

Champagne said Monday that this budget will outline the Carney government’s vision for the future, suggesting it will be more significant than in previous years given the challenges Canada faces.

,This is a unique moment in the history of our country and we need to rise to this moment and we’re going to get through it together,” he told reporters after buying a new pair of shoes ahead of the budget, as is Canadian parliamentary tradition.

,This is the kind of budget you’ll remember,” he said. “Canadians have asked us to do big, bold things.”

• What questions do you have regarding the budget? send an email to ask@cbc.ca,

Whatever the ambition, introducing this document in Parliament is the first step.

The minority Liberal government has 169 seats in the House of Commons and needs at least three members of the opposition to support the budget if it is to have any chance of passage – although that number could be reduced to two if the Speaker is willing to break a tie. This equation may also change if some members abstain from voting.

Till now the government does not have the necessary support.

both traditionalists and Bloc Québécois He has made many demands which are not expected to be fulfilled in exchange for votes.

The Conservatives want a deficit of $42 billion or less – which is roughly what the previous Liberal government said it would be this year – and that’s probably a non-starter given the Liberals have already announced they’ll have in this budget. One observer has said that the deficit this fiscal year could be as high as $100 billion.

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As of June, several pre-Budget announcements have been made, including, but not limited to:

• $9 billion will be spent on defense by the end of March.
• $13 billion (initially) for the Build Canada Homes Agency.
• $2 billion for small nuclear reactors in Darlington, Ontario.
• $5 billion for a new strategic response fund.
• $3.6 billion over three years for temporary EI measures due to tariff uncertainty.
• $1.8 billion to increase federal police capacity.
• $370 million for new biofuel production incentives.
• $77 million over four years to CRA for trucking industry non-compliance.
• $660.5 million over five years for gender equality and safety (including new RCMP hires).
• $97 million over five years to create the Foreign Credential Recognition Action Fund.
• $450 million over three years for a workers’ reskilling package.

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In contrast, the Bloc wants greater government largesse for seniors, with higher pension payments and more health care spending, which is equally unlikely given this government’s commitment to tightening its belt and making what Carney has called “hard choices” and “sacrifices”.

NDP interim leader Don Davis has said his party can’t support an “austerity” budget and that party MPs will decide after seeing what’s actually included in the champagne. As CBC News previously reported, Davis also said Abstention from voting is an option,

If the government loses the budget vote, Canadians could face an election before Christmas – something Carney said he is willing to do if the opposition demands it.

“I have 100 percent confidence that this budget is the right budget for this country at this time,” he said.

More money for housing, military

A senior government official confirmed to CBC News that Tuesday’s budget is expected to include a $50 billion local infrastructure fund for items like housing and transportation. It will also set aside a budget of up to $1 billion to bring in skilled talent from abroad, including the US. The Globe and Mail first reported those details.

The budget is also expected to include more money for the military, as Canada moves forward after years of underinvestment in housing stock and the armed forces.

U.S. President Donald Trump’s protectionism has hurt some Canadian sectors more than others – steel, aluminum, autos and lumber have been hit hard by his Section 232 tariffs – and this budget will likely include some form of relief to tide them over as bilateral talks on tariff relief have stalled.

there will be some According to a senior government official who spoke to CBC News, the change to the tax structure is more “pro-competition, pro-growth and creates conditions for risk-free investment in Canada”.

Carney also said the budget will be divided differently than in previous years and that capital and operating expenditures will be reported separately.

Capital spending is what the government spends on infrastructure and other fixed assets – Ottawa says it’s anything that “contributes to public or private regional capital formation” – while operating spending is costs like public servant salaries and benefits and money for transfers to the people and provinces.

While promising to spend more on capital – Carney has said he wants to “spend less and invest more” – Champagne and Carney have both hinted at cutting bureaucracy as the Liberal government looks for 15 per cent in savings over the next three years to rein in spending after a spending spree under the Trudeau government.

is a public service grew several times faster than the overall population — which itself has been historically high — and Carney has said those days are over, and promised that the operating budget will be balanced in three years’ time.

Apart from the expected reduction in the size of the bureaucracy, the budget is expected to provide some details on the savings found as part of it. comprehensive expenditure review Which was launched by Ottawa in the summer months. One program that is being scaled back to cut costs is the previous Liberal government’s promise to plant two billion trees.

Economists differ on Canada’s finances

There is disagreement among economists on the financial condition of the country.

The interim parliamentary budget officer, Jason Jacques, has sounded the alarm about the country’s deficit and debt levels, especially after Carney said he would spend several billion dollars a year on the military – He announced over $9 billion for this fiscal year alone – and canceled some planned revenue generators like changes to the capital gains tax inclusion rate and eliminating the digital services tax.

Jacques said in September that the fiscal path is “unsustainable” and the country’s finances are “on the rocks”.

Meanwhile, one of Jacques’ predecessors, Kevin Page, has publicly disputed the interim PBO’s assessment of Canada’s fiscal health, arguing that Canada is in “very good shape” financially compared to other rich countries.

Page said, “The deficit increase is not surprising given the economy is slowing and we have NATO commitments. To me, this is sustainable.”

Kristalina Georgieva, managing director of the International Monetary Fund, said in October that although some G7 countries have “significant fiscal problems”, Canada is not one of them.

Conservative leader Pierre Poilievre said he wanted Carney to present an “affordable budget” with very little government spending.

Poilievre has long criticized Ottawa’s growing debt burden, saying it drives inflation.

With more debt comes higher debt service costs, meaning more of every dollar collected goes to paying back Canadian bondholders.

Speaking to reporters at a food bank in suburban Ottawa on Sunday, Poilievre said the government has justified large deficits in the past by saying it would boost private sector investment and that has not been met.

“Just more spending, more debt, more taxes, more inflation, more and more,” Poilievre said of Carney.