Carney proposes 2025 federal budget despite criticism

OTTAWA. Prime Minister Mark Carney described Canada’s 2025 federal budget as “a bold response to global economic challenges,” pushing back against opposition criticism. “Now is not the time to be cautious — fortune favours the bold. We must act quickly and get big things done for Canadians,” he said at a press conference in Ottawa.

The budget outlines nearly $90 billion in new spending over five years and aims to attract up to $1 trillion in investment to offset losses from U.S. tariffs introduced by the Trump administration. It also forecasts that Canada’s economy will be 1.8% smaller by 2027 than previously expected.

Carney noted that the government is cutting annual operational spending growth from 8% to below 1%, while increasing capital investments in roads, bridges, hospitals, and public transit. A 10-year, $51-billion infrastructure fund will be established, though TD Bank reports that only about $9 billion of that is new money.

Conservative Leader Pierre Poilievre accused the Liberals of running a “record deficit” of $78.3 billion and of maintaining an industrial carbon tax that raises costs for manufacturers. The Conservatives plan to introduce a budget amendment to reduce bureaucracy and eliminate the carbon levy.

Despite the criticism, economists highlight positive measures — including accelerated capital cost deductions and expanded R&D tax credits — that could make Canada more attractive to investors.

Bank of Canada Governor Tiff Macklem said the budget “accurately identifies” Canada’s main challenges — low productivity and weak investment — adding: “What will matter most now is the quality and execution of those investments.”