Canadian Prime Minister Mark Carney has promised his first budget will be a bold blueprint for “generational investments” to strengthen the economy and withstand a trade war with the United States. But for some analysts, this is a missed opportunity.
Analysts said Carney’s budget proposal on Tuesday ultimately fell short of his ambitions, constrained in part by the reality of leading a minority government dependent on political opponents for survival.
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“This is not a generational budget,” said Theo Argitis, senior vice-president of policy at the Business Council of Canada. “It’s moving in the right direction in some ways, but I don’t think Mr. Carney was as ambitious as he thought.”
Argitis said there is not enough money to accelerate private investment on the scale needed for significant growth.
“If we’re trying to transform the economy, we can’t do it with this budget,” he said.
Low growth, US tariffs
Canada is suffering from slowing economic growth and the impact of tariffs imposed by US President Donald Trump.
Carney on Wednesday pushed back against the idea that he was being too cautious, saying the tariffs and the uncertainty they created were equivalent to about 1.8% of gross domestic product.
“This budget is a major change in the government’s approach,” he told reporters, pointing to a pledge to reduce the pace of public spending and unprecedented tax changes to boost business investment.
But while more Canadians are struggling to put food on the table, Mr. Carney isn’t necessarily the politician they’re blaming, said Elizabeth McCallion, an assistant professor of political science at the University of Toronto.
“Canadians know there are many things outside of Mr. Carney’s control,” she said. “They’re angrier at Donald Trump than they are at Carney.”
Lacking enough seats in the minority government needed to pass a budget, Carney is likely to rely on the small left-wing New Democratic Party, which has just seven members, little funding and no permanent leader.
The Carney administration will get away with simply abstaining from the budget vote expected after November 17th.
“Unless someone stumbles on this budget, this budget is not going to trigger an election. No party should want to go now, not even the Liberals. And the voters? They’re prepared to punish anyone who tries,” said Darrell Bricker, global CEO of polling firm Ipsos Public Affairs.
A Nanos Research poll this week found that nearly half of Canadians chose Mr. Carney as prime minister, compared to 27% for Pierre Poièvre, leader of the official opposition Conservative Party.
The New Democratic Party welcomed some proposed measures, such as infrastructure spending related to union jobs, but said public sector job cuts and other provisions were “a step in the wrong direction”.
Infrastructure development, spending reduction
The budget promises to spend C$280 billion ($200 billion) over five years on building new infrastructure, while cutting government spending by C$60 billion ($42.6 billion).
Another controversial issue is the proposed deficit, with Ottawa projecting a deficit of C$78 billion ($55.3 billion) for next year, or more than double last year’s deficit. By 2030, it will fall to $57 billion ($40.4 billion).
Poilievre had previously laid out several key budget demands, including keeping the budget deficit below C$42 billion ($29.8 billion).
Poièvre also criticized the budget on Tuesday, which leaves taxes on food, labor, energy and housing construction unchanged.
But one Conservative MP, Chris d’Entremont of Nova Scotia’s Acadie-Annapolis constituency, seems convinced. He announced Tuesday that he has joined Carney’s Liberal Party, but will remain in the minority in the government. Political defections are relatively rare in Canada.
Robert Asselin, a former Liberal cabinet minister who now heads the research universities organization, said Carney could have spent more to boost growth, but that would likely have resulted in a budget deficit of more than C$100 billion ($71 billion).
Drew Fagan, a visiting professor at Yale University who specializes in world affairs, said, “You can’t easily run the world’s 10th largest economy on one budget.”
