Post by : Rameen Ariff

Prime Minister Mark Carney will present his government’s inaugural federal budget on Tuesday, urging Canadians to prepare for necessary sacrifices as Ottawa works to repair an economy unsettled by U.S. tariffs and global volatility.

A former central bank governor, Carney says the fiscal plan will balance prudent spending reductions with long-term investments designed to push Canada to the front of the G7 on economic strength. Central themes include lowering dependence on U.S. markets, reshaping supply chains, and lifting productivity across sectors.

The budget will spell out Ottawa’s approach to financing a substantial increase in defence outlays intended to reach NATO’s 5% of GDP goal by 2035 — a pledge that has already drawn intense political scrutiny.

Analysts warn the deficit could climb beyond C$70 billion, compared with last year’s C$51.7 billion, as the government channels funds into infrastructure, housing, and industries disrupted by tariffs.

“We once embraced large, daring choices; it’s time to aim big again,” Carney said in a pre-budget address last month, setting the tone for a push toward economic resilience.

Finance Minister François‑Philippe Champagne underscored a “made-at-home” message on Monday during a pre-budget stop at a Quebec footwear plant that supplies the Canadian Armed Forces and RCMP.

“Our shift is from dependence to resilience, and from uncertainty toward shared prosperity,” Champagne said, highlighting support for domestic suppliers.

Despite the emphasis on growth and diversification, Carney has committed to restoring a balanced operating budget within three years. Departments were asked over the summer to identify as much as 15% in savings to reallocate resources toward priority areas.

Part of Carney’s blueprint is an ambitious aim to double non-U.S. exports within ten years, a strategy intended to shield Canada from the fallout of U.S. tariffs that have hit sectors such as autos, lumber and metals despite USMCA exemptions for some goods.

Observers note the minority Liberal government will need backing from at least one opposition party to pass the budget. The New Democratic Party, amid a leadership transition after disappointing results at the polls, is viewed as the most probable partner.

Failing to win parliamentary support could precipitate an early election, although most experts judge that outcome unlikely so soon after the spring vote.

Canada’s economy faces growing strains: joblessness is rising and the Bank of Canada forecasts modest expansion of 1.2% in 2025, 1.1% in 2026 and 1.6% in 2027. The budget is widely seen as a pivotal test of whether Carney can deliver a renewed economy without imposing undue hardship on ordinary Canadians.

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