On Tuesday, Canadian Prime Minister Mark Carney unveiled his first-ever federal budget, describing it as a “bold blueprint” for construction jobs for generations and for a stronger economy better insulated from President Trump’s escalating trade war with America.
However, as per a Reuters report, analysts and political observers said the budget didn’t measure up to the lofty rhetoric.
Carney, facing the limitations of a minority government, seemed to retract the expansive vision he’d suggested when he first arrived.
“This isn’t a generational budget,” said Theo Argitis, senior vice president for policy at the Business Council of Canada.
“It goes in the right direction on some fronts, but I think Carney was not as ambitious as he could have been.”
According to Argitis, the plan does not include enough measures to encourage large-scale private investment, which is essential for long-term prosperity.
“If you’re looking to transform the economy, this budget is not going to do it,” he added.
Economic challenges and political risks
Carney’s administration has a dual challenge: slow economic growth and increased tariffs imposed by US President Donald Trump.
Tariffs have hampered investment and job creation in the Canadian economy.
Carney himself enjoys comparatively limited collateral damage in terms of public opinion, despite mounting household pressures.
According to Elizabeth McCallion, an assistant professor of political science at the University of Toronto, more Canadians have met the challenge of making ends meet. They are not blaming Ottawa, but blaming Washington.
“Canadians know there are many things beyond Carney’s control,” she said. “They’re more angry at Donald Trump than they are at Carney.”
A recent Nanos Research poll released this week indicated that over half of Canadians would prefer Carney as prime minister, compared to 27% who supported Conservative leader Pierre Poilievre.
“Canadians have shown they have confidence in Carney,” he said, “but it’s now up to the House of Commons to decide whether or not he can govern.”
Carney’s minority Liberal Party does not command a majority in Parliament, and his ability to pass the budget likely rests with the small, left-of-centre New Democratic Party (NDP), which holds only seven seats.
Balancing ambition and austerity
The budget proposes spending C$280 billion (US$200 billion) on infrastructure over five years, as well as C$60 billion in cuts to government operations and the elimination of approximately 40,000 civil service jobs over three years.
It also anticipates a deficit of C$78 billion for the next fiscal year, more than double the previous year’s total, with hopes to lower it to C$57 billion by 2030.
Another major point of contention in the budget is its proposed deficit, projected at C$78 billion for the next fiscal year — more than double last year’s shortfall — according to estimates from Prime Minister Mark Carney and Finance Minister François-Philippe Champagne.
The deficit is expected to narrow to C$57 billion by 2030.
Opposition leader Pierre Poilievre had previously outlined key conditions for supporting the budget, including capping the deficit at C$42 billion.
On Tuesday, Poilievre criticised the government’s fiscal plan for maintaining what he called the Liberal Party’s taxes on groceries, work, energy and homebuilding, arguing that the measures would further burden Canadians amid high living costs.
However, in a startling event, one of his Conservative colleagues, Chris D’Entremont of Nova Scotia’s Acadie-Annapolis district, expressed his support for the Liberals, leaving Carney’s administration still short of a majority but with a symbolic advantage.
The NDP has cautiously welcomed portions of the proposal, particularly the infrastructure spending linked to union jobs, while calling the public-sector cuts “a step in the wrong direction.”
Don Davies, the party’s interim leader, said he would consult Canadians before deciding whether to support the budget.
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