Canada’s 2025 Budget: A Turning Point or Another Missed Opportunity?

Canada’s 2025 Budget: A Turning Point or Another Missed Opportunity? by Maj (ret’d) CORNELIU, CHISU, CD, PMSC FEC, CET, P.Eng. Former Member of Parliament Pickering-Scarborough East When Finance Minister François-Philippe Champagne rose in the House of Commons on November 4 to deliver the 2025 federal budget, the tone was unmistakably ambitious. Framed as a “budget for a generation,” the plan seeks to reposition Canada’s economy for a volatile world. With Prime Minister Mark Carney’s first budget now tabled, Ottawa clearly wants to mark a decisive break from the incremental politics of the past decade. From Maintenance to Nation-Building The headline figure—nearly $280 billion in new investments over five years—is staggering even by post-pandemic standards. Yet the government insists this is not another spending spree but a deliberate bid to modernize Canada’s productive base, expand infrastructure, and strengthen national resilience amid global upheaval. What distinguishes Budget 2025 is its structure. It introduces a capital-budgeting framework that separates day-to-day expenses from long-term investments. This seemingly technical reform signals a deeper shift: Ottawa wants Canadians to view public spending as investment in national assets—ports, clean-energy grids, research capacity, and housing—rather than mere consumption. The allocations reflect that philosophy: roughly $115 billion for infrastructure, $110 billion for productivity and innovation, $25 billion for housing, and $30 billion for defence and security. In essence, it is nation-building 2.0, reminiscent of the post-war decades when Canada built highways, railways, and pipelines. In Carney’s televised address, he called the effort “the price of staying sovereign in an uncertain world.” With supply chains fragmenting and rivalries reshaping trade, Canada must rely more on its own productive capacity—from critical minerals and clean manufacturing to digital and transport infrastructure. The Fiscal Balancing Act Ambition carries a cost. The projected deficit of $78.3 billion for 2025-26 exceeds earlier targets, prompting charges that the government has broken its fiscal promise. Still, Ottawa pairs its investment drive with two anchors: balancing day-to-day operations by 2028-29 and ensuring the deficit-to-GDP ratio declines over time The government argues that not all deficits are equal—those creating long-term assets can strengthen the balance sheet. Whether voters accept that logic will hinge on tangible results: more jobs, affordable homes, better transport, and a stronger industrial base. Importantly, the budget avoids broad tax hikes. Instead, it leans on targeted incentives: enhanced clean-tech and critical-minerals credits, immediate expensing for manufacturing facilities, and renewed support for capital investment. The message to business is competitive, not punitive. The “New Way” Ottawa Envisions Beyond the numbers, Budget 2025 seeks to redefine Canada’s economic model. After decades of dependence on U.S. demand and commodity cycles, the government outlines a path toward self-reliant growth. Major infrastructure, defence, and energy projects aim to reinforce the North American industrial base and link economic policy with national security. Housing policy also takes a new turn. After years of stalled pledges, Ottawa commits $25 billion to expand affordable supply and speed up permitting through federal-provincial-municipal partnerships. By tying transfers to measurable results, it aims to impose coordination on a system long marked by fragmentation. This “whole-of-nation” narrative—combining productivity, housing, defence, and climate—reflects Carney’s belief that fiscal policy must prepare nations for structural shocks rather than react to them. Opposition Voices and Alternative Visions A credible democracy requires credible opposition, and reactions to Budget 2025 reveal Canada’s shifting political landscape. The Conservative Party, led by Pierre Poilievre, branded the plan “a costly budget of broken promises.” Their critique focuses on the deficit, debt-servicing costs, and the absence of direct affordability relief. Conservatives warn it could rekindle inflation and do little to fix the housing crisis, calling instead for spending restraint, a smaller bureaucracy, and repeal of the carbon tax. These arguments resonate with Canadians who feel squeezed by rising costs. Yet their response remains largely reactive—emphasizing cuts and deregulation without offering a detailed growth strategy. Fiscal prudence matters, but rebuilding productivity requires more than austerity. Their criticism and essentially lack of an intelligent alternative constructive proposal demonstrate some deficiencies in their professionalism. The New Democratic Party offered a more nuanced view. Finance critic Don Davies welcomed infrastructure spending and co-operative housing—long NDP priorities—but warned that removing the Underused Housing Tax and trimming public-sector jobs could hurt fairness. The party also questioned generous incentives for foreign corporations, urging stronger domestic-content rules.mIn a minority Parliament, such conditional support could shape amendments and ensure social equity remains part of the growth agenda. The Bloc Québécois and Green Party criticized centralization and questioned environmental follow-through. While their influence is limited, their calls for transparency and accountability echo public concern about execution. Risks and Rewards Execution remains the Achilles heel. Canada’s regulatory maze and permitting delays often stall infrastructure projects for years. Without serious streamlining, many of these investments could remain PowerPoint slides long after political momentum fades. Fiscal risk looms as well. Interest payments are projected to reach $58 billion annually by 2028, more than the federal health transfer. If global rates rise or growth falters, Ottawa’s fiscal anchors could wobble. Yet the potential upside is significant. If implemented effectively, these investments could renew productivity, expand the industrial base, and strengthen Canada’s resilience. The capital-budgeting reform, if maintained, may also improve transparency—clearly distinguishing investment from consumption. A Moment of Choice Every generation faces a moment when the old economic model no longer fits new realities. Budget 2025 aims to meet that moment with an integrated, forward-looking vision. Whether it marks the start of a new Canadian era—or another cycle of lofty promises—will depend on disciplined execution and a Parliament willing to debate rather than weaponize fiscal policy. For now, the budget stands as both a gamble and a statement of intent: that Canada is ready to invest in itself again—to build rather than drift, and to chart a “new way” suited to the century ahead. Let’s see if the budget will be passed or not next week. It is a confidence vote. Its rejection would start a winter election.