Canada's federal budget earmarks billions for sovereignty, housing and tariff relief

Prime Minister Mark Carney announced a C$142 billion spending plan over five years, funded by stronger-than-expected oil revenues, that aims to strengthen Canada’s economic and cultural independence while addressing 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 highlighted measures for growth, people and sovereignty.

Key components include an 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.