POLITICS: Ottawa budget (short version)

Canada’s 2025 Federal Budget: Short Version

• The Vote Happening Today
  The House of Commons is voting on PM Mark Carney’s first budget – a confidence vote that could trigger an election if it fails
• Liberals hold 170 seats but need at least two opposition votes to survive, as they’re three seats short of a majority
• Conservatives and Bloc Québécois plan to vote against it
• NDP holds the balance of power and remains undecided
• Green Leader Elizabeth May is “open to supporting” to avoid another election but hasn’t committed.

The Big Numbers
New spending: $141.4 billion over five years

• Savings/cuts: $51.7 billion over five years
• This year’s deficit: $78 billion (dropping to $57 billion by 2029-30)
• Promise: Balance operational spending in three years (only borrowing for infrastructure, not day-to-day costs)

• Major Spending: Where the Money Goes
  Infrastructure ($115 billion over 5 years)
  Build Communities Strong Fund: $51 billion over 10 years for hospitals, universities, roads, bridges, water systems, and transit
• Major Projects Office created to fast-track energy, trade, and transportation projects
• High-speed rail, new ports, carbon capture facilities in the pipeline

• Defence ($81.8 billion over 5 years)
  Roughly $72 billion is new money
• Reach NATO’s 2% GDP target by March 31, 2026
• Reach 3.5% GDP on core defence by 2035
• “Buy Canadian” procurement plan to build domestic defence industries

• Housing ($25 billion over 5 years)
  Build Canada Homes agency: $13 billion to dramatically scale up home construction
• Focus on factory-built and affordable housing
• Eliminate GST for first-time buyers on new homes up to $1 million
• Reduced GST on homes between $1-1.5 million

• Business & Productivity ($110 billion over 5 years)
  Goal: catalyze $500 billion in private sector investment by 2030
• “Productivity super-deduction” – faster write-offs for business capital investments
• Manufacturing/processing buildings can be written off 100% in first year if acquired before 2030

• Other Key Spending
  $40 million over 2 years for Youth Climate Corps (NDP priority)
• $150 million for CBC/Radio-Canada modernization (Bloc priority)
• National School Food Program made permanent (400,000 more children fed annually)
• Filipino Community Centre in Vancouver (targets NDP Leader’s riding)
• Various local infrastructure projects in swing ridings

Major Cuts: Where They’re Saving Money
Public Service Reductions

• 40,000 positions cut over coming years (from 368,000 to 330,000 by 2028-29)
• Done through buyouts and attrition, not mass layoffs
• Government calls it “new discipline” to redirect money from operations to infrastructure

• Program Spending
  $60 billion in savings initially from Comprehensive Expenditure Review
• Modernizing government and improving efficiencies across departments

• Immigration Reductions
  Temporary residents (students, foreign workers) cut by nearly 50%
• Targets drop from 673,650 in 2025 to 385,000 in 2026 and 370,000 in 2027-28
• Economic migrants increase from 59% to 64% of total (prioritizing skilled workers)

• Tax Changes for Regular Canadians
  Middle-class tax cut included
• Pre-filled tax returns starting 2027: 1 million people initially, scaling to 5.5 million by 2029
• Easier access to federal benefits
• Canada Strong Pass renewed for upcoming holidays and summer 2026

• Energy & Environment Shift
  Oil and gas emissions cap could be scrapped if carbon markets improve, methane regulations are enhanced, and carbon capture is deployed at scale
• Major policy reversal from previous Liberal approach

What Opposition Parties Are Saying
Conservatives (voting NO):

• Call it “Carney’s costly credit card budget”
• Wanted deficit under $42 billion – didn’t get it
• Say it will drive up costs for Canadians

• Bloc Québécois (voting NO):
  Leader calls it “a red conservative budget which Mr. Stephen Harper might have signed”
• Wanted more Old Age Security and health transfers – didn’t get enough

• NDP (undecided):
  Have “serious concerns” and “questions”
• Some MPs may abstain rather than vote yes or no
• Weighing whether to force another election

• Greens (leaning YES):
  Open to supporting because “Canadians don’t want another election right away”

• Political Drama Leading to Today
  Conservative MP Chris d’Entremont crossed the floor to join the Liberals
• Conservative MP Matt Jeneroux quit Parliament entirely amid rumours he’d join government
• Budget survived two preliminary confidence votes last week
• Today is the final test

The Big Picture: What This Budget Really Means
A Major Shift in Liberal Policy:

• Focuses on corporate measures and infrastructure, not the pocketbook promises or sweeping social programs that characterized Trudeau’s Liberal government
• Betting on infrastructure and business incentives to spark private investment
• Less about helping individuals directly, more about long-term economic transformation

• The Context:
  Canada facing trade war with US after Trump imposed tariffs
• Economy slowing, unemployment rising
• Trying to pivot away from US dependence toward economic self-sufficiency

• The Gamble:
  Run bigger deficits now to invest in infrastructure and productivity
• Hope this sparks private sector growth that pays off later
• Government says measures will boost wages and create revenue for health care and lower taxes
• Critics say it ignores immediate cost-of-living concerns

• What Happens If It Fails?
  Canada forced into second federal election in seven months
• Political uncertainty during trade war and economic challenges
• Government falls, triggering campaign immediately

Bottom line: This is a high-stakes gamble that transforms Liberal economic policy from social spending to infrastructure investment, cuts 40,000 government jobs, slashes immigration, but massively boosts defence and business incentives – all while running the largest deficit in years. Whether it passes depends on whether enough opposition MPs think avoiding an election is worth supporting a budget they don’t fully believe in.