What’s in Canada’s New Budget?

On November 4, Prime Minister Mark Carney’s government unveiled its first budget, sparking debate over whether it can win enough opposition support to survive a confidence vote. The Conservatives and Bloc Québécois have already said they will not support it, while the NDP remains undecided.

1. $78 Billion Deficit.
The federal deficit for 2025–26 is projected at $78.3 billion — higher than expected by the Parliamentary Budget Officer, but lower than some economists predicted, due to higher defence spending and cuts in public administration.

2. Foreign Aid Cuts.
Canada’s foreign aid will be reduced by $2.7 billion over four years. The deficit is expected to fall to $57 billion by 2030.

3. No Balanced Budget Plan.
Instead of achieving balance, the government introduces two “fiscal anchors”: keeping operating expenses within revenues and reducing the deficit-to-GDP ratio.

4. Slower Economic Growth.
GDP growth has been revised down to about 1% annually for 2025–26, due to trade tensions and low productivity.

5. Public Service Reduction.
The federal workforce will be cut by 40,000 — roughly 10% — by 2029.

6. Infrastructure and Investment.
$115 billion will fund housing, roads, water, and health projects; $19 billion goes to defence; nearly $1 billion to AI infrastructure.

7. Immigration Limits.
The number of temporary residents will be nearly halved to 385,000 by 2026. The annual permanent residency target will drop to 380,000.

8. Defence Spending.
$81.8 billion over five years will strengthen the military, support Ukraine, and enhance cybersecurity.

9. Tax and Media Changes.
Luxury taxes on yachts, planes, and vacant homes will be scrapped. CBC/Radio-Canada will receive an extra $150 million to reinforce its public service mandate.

Carney’s budget blends ambitious investments with spending restraint, making it one of the most debated financial plans in recent Canadian history.