Canada’s federal budget pours billions into sovereignty, housing and tariff relief
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Prime Minister Mark Carney’s second budget channels C$142 billion over five years into state-led spending on national sovereignty, homelessness prevention and support for industries hit by President Donald Trump’s tariffs, while preserving fiscal targets and keeping immigration caps in place.
Prime Minister Mark Carney announced a C$142 billion spending plan over five years, funded by stronger-than-expected oil revenues, that seeks to bolster Canada’s economic and cultural independence while easing cost-of-living pressures.
Carney said the budget is "the next big step in our action plan to make this country more independent, more sovereign" and emphasized measures framed around growth, people and sovereignty.
Key components include a C$11.2 billion commitment to end homelessness within ten years, funding for supportive housing, mental-health and addiction services, and an expanded grocery benefit that could provide up to C$2,570 per year for a family of four.
The budget maintains the government’s fiscal targets despite a deficit of over C$50 billion, and projects modest GDP growth that would outpace most G7 economies except the United States.
To mitigate the impact of President Donald Trump’s tariffs on Canadian steel and forestry sectors, the plan continues support for businesses seeking new export markets and lowers the marginal effective tax rate to discourage relocation to the United States. Since March 2025, nearly C$44 billion has been allocated to workers and firms affected by the tariffs.
Immigration targets remain flat, with permanent-resident admissions capped at 380,000 annually through 2028 and temporary-resident arrivals limited to 370,000, while the government rejects calls to raise these numbers.
Sovereignty-related spending includes C$2.7 billion for domestic rocket and space-technology development, C$32.2 million for a free national digital library, and C$2.3 billion over five years for a marketplace of Canadian-made drones. Additional funds support Operation Reassurance, Canada’s overseas deployment aimed at deterring Russian aggression in Eastern Europe.