In the2025 Canadian federal election, the incumbentLiberal party, led by Prime MinisterMark Carney, won a plurality of seats but failed to win enough seats to gain a parliamentary majority, continuing their six-year tenure as a minority government and marking the third consecutive term of a Liberalminority government. Carney, described asfiscally conservative, announced an increase in defence spending, a reduction in the public service, tax cuts, among others. On September 17, Champagne confirmed November 4 as the date of the budget.[citation needed] This is the first budget to occur under the2025 United States trade war with Canada and Mexico, and the first under a new capital budgeting framework.[citation needed] Operational spending will be distinguished from capital expenditures, and the budgeting cycle will be revised with a budget tabled in autumn, and an economic statement released in the spring.[1]
Decreases the size of the civil service by about 40,000 positions, with funding previously used for the civil service to go towards "nation-building" projects. Additionally, the government aims to be more efficient by spending less.[2]
Reaching the 2% ofGDPNATO target for military spending by 2026, with an aim for 5% by 2035.[2]
Erect a trade diversification fund and "double overseas exports within a decade".[2]
Boosts funding to broadcasters, including boostingCBC/Radio-Canada funding by $150million. Funding is provided to investigate Canada's potential participation in theEurovision Song Contest.[2]
The government will eliminate taxes on under-utilized housing, luxury jets priced over $100,000 and boats priced over $250,000.[2]
The budget proposes to cut temporary immigration from 673,650 in 2025 to 385,000 in 2026. Permanent immigration will stay relatively stable at 380,000 from 2026, compared to 395,000 in 2025. The government also plans to recognize more vocational qualifications and launch a policy to attract foreign researchers to Canada. A one-year programme to accelerate pathways to permanent residency for 33,000 temporary immigrant workers will be implemented.[2]
The budget proposes to accelerate the construction of ahigh-speed rail line. The budget has $214million for critical mineral–related projects. The government also proposes to invest in new infrastructure projects including housing, roads, water services and healthcare facilities through the creation of a newBuild Communities Strong Fund (BCSF) programme which will provide $51billion in funding over ten years, with $5billion being dedicated toward health infrastructure as part of a newHealth Infrastructure Fund within the BCSF.[2]
The budget includes a tax deduction for productivity-related capital investments; including a tax break for manufacturing-related purposes such asLiquefied natural gas (LNG) equipment.[2]
The budget projects operational spending will be balanced with revenue within three years.[2]
On November 17, the budget passed, with all Liberals (except the Speaker) and May voting in favour. Conservative MPMatt Jeneroux, who announced his intention to resign as an MP following the budget's tabling, voted to abstain. 2 NDP MPs also voted to abstain and another Conservative was absent, with all other Conservatives and NDP MPs voting against the budget, along with the Bloc.[10]
Polling conducted byAbacus Data following that budget's release found that 52% of Canadians believed the budget was a step in the right direction compared to 48% who believed it was a step in the wrong direction.[11] Abacus Data and Kolosowski Strategies measured support for individual budget measures, finding majority support for "Buy Canadian" procurement, reduced temporary resident numbers, increased military spending and reductions in the civil service, while finding majority opposition to the deficit, increases to theindustrial carbon tax and elimination of the luxury tax.[12]
