Canada prepares second budget with focus on affordability, investment and sovereignty
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Prime Minister Mark Carney's upcoming budget will target affordability measures, business tax incentives, and investments in infrastructure, defence, culture and the Canada Strong Fund amid ongoing U.S. trade tensions.
Canada's government is set to unveil Prime Minister Mark Carney's second budget on Thursday, featuring new affordability measures, business tax incentives and expanded spending on infrastructure, defence and cultural institutions, a senior official said. The budget will also provide updates on private investment in the country's four largest airports, the Canada Strong Fund sovereign wealth vehicle and foreign direct investment flows.
"The budget has three pillars: investing in the people, the identity and the growth of Canada," the official, who is not authorized to speak publicly, told reporters. Finance Minister François-Philippe Champagne has already released the budget's title, "Masters of Our Destiny" (English) and "Maîtres Chez Nous" (French), a phrase linked to Quebec's Quiet Revolution and the prime minister's emphasis on sovereignty.
While the United States' trade dispute with Canada has been ongoing for 18 months, the source emphasized that the budget is not a reaction to the recent U.S. midterm elections. "Essentially the impact of the U.S.-Canada trade dispute is already kind of baked in," said Theo Argitis, senior vice-president of policy for the Business Council of Canada.
Business groups expressed optimism that the budget will address small-business concerns. Dan Kelly, president and CEO of the Canadian Federation of Independent Business, called for a reduction of the small-business corporate tax rate from nine percent to six percent and a higher income threshold for the lower rate. He also urged lower employment-insurance premiums for smaller employers and practical tax changes over symbolic measures.
The Council of Canadian Innovators advocated for a new tax credit for technology firms and a qualified small-business incentive similar to the U.S. model, as well as a revived startup visa program to attract foreign entrepreneurial talent.
The government also plans to introduce immediate and medium-term programs to help vulnerable Canadians, though details on extensions of existing measures, such as the temporary fuel excise tax elimination, were not disclosed. Sean Strickland, executive director of Canada's Building Trades Unions, highlighted the need for budget provisions that address everyday cost pressures faced by Canadians.
Cultural funding may be increased under the budget's "identity" pillar, a move that aligns with the government's broader sovereignty agenda, according to Argitis. Analysts noted that while the budget aims to pursue ambitious projects, it must balance spending with fiscal responsibility, as public-debt charges are projected to reach $83 billion by 2030-31.
Desjardins Group deputy chief economist Randall Bartlett called for greater transparency on spending, debt-to-GDP targets and housing initiatives, noting that only about 2,000 of the 19,000 affordable units pledged under Build Canada Homes are under construction.