Canada economy 8 September 2025-

Liberal budget clears first confidence vote
Second budget confidence vote happening on Friday
The Liberals, Bloc Québécois and NDP voted down a Conservative sub-amendment on the budget Thursday evening that, if passed, would have forced a new election.
The Conservative sub-amendment was to a Bloc Québécois amendment that calls on the House to reject the budget. A vote on the Bloc amendment will take place on Friday.

5 November
This budget is a Trump survival plan. Here are the highlights
Prime Minister Mark Carney’s budget comes out a month after his second trip to Washington, where he and President Donald Trump spoke about trade but came to no consensus about a deal to lift punitive U.S. tariffs.
More money for defence and trade diversification, less for public servants: Here’s what stands out in Tuesday’s blueprint
(Globe & Mail) From the opening words, “The world is changing,” the Carney government’s first budget is a response to Mr. Trump’s trade war and the threat to Canada’s economy. That means ramped-up defence spending, measures to make Canadian businesses more competitive and billions in new investment around trade diversification.
This all comes at a cost in the form of a $78.3-billion deficit for this fiscal year, and Prime Minister Mark Carney faces intense pressure from investors, and the opposition Conservatives, to prove Canada has a path to fiscal stability. As such, the budget also imposes a new era of austerity on the public service and measures to slash the government’s operating costs. Here are the highlights.
… The federal public service ballooned by 40 per cent under the first nine years of the Trudeau government, far outpacing Canada’s population growth. The 2025 budget sets out a timeline to bring the population of federal workers back to what Finance Minister Francois-Philippe Champagne calls “a sustainable level.”
These aren’t exactly the DOGE-level cuts seen in the U.S. By 2028-29, the budget calls for the public service to shrink to 330,000, a decline of roughly 30,000 from where it was in 2024-25. That would bring it roughly back to where it was in 2021-22.
… In a budget that is heavy on restraint, defence spending stands out for the tens of billions earmarked to rebuild Canada’s military, a sharp reversal from past budgets.
The government plans to spend $84-billion on a cash basis over the next five years, $9-billion of which was already announced by Mr. Carney in June. Of that amount, one-quarter will go to pay raises and recruiting. … where industrial policy under the Trudeau government leaned heavily on electric vehicles and batteries, the 2025 budget puts another $6.6-billion toward the Carney government’s defence industrial strategy to bolster a sector it says employs 81,200 people. …
Andrew Coyne: That’s it?
Carney’s first budget fails to meet the moment his government hyped so much
In the words of the celebrated economist Peggy Lee: Is that all there is?
Has there been a budget that was preceded by more breathless hype than this one? It was to be a budget full of “generational investments” that would “swing for the fences” and “define our next century.” On the other hand, it would also be full of “difficult choices,” even “sacrifices,” which might or might not have added up to “austerity” depending on who was speaking.
It was going to restore order to public finances, jump-start productivity, diversify trade, and get this country building again. Above all, it was going to “meet the moment” imposed on us by Donald Trump, creating a more resilient economy that could prosper and grow even in the face of double-digit American tariffs.
There’s more good than bad in it – allowing more private investment in airports, for example, or scrapping the emissions cap (in exchange for a tightened industrial carbon-pricing regime). But to borrow a line from that noted 18th-century economist, the Reverend Martin Sherlock, too little of what is good is new, and too little of what is new is any good.
Federal budget charts difficult path out of current crisis — with small margin of error
Peter Armstrong
Whether ‘upside’ or ‘downside’ scenario plays out, plan relies on economy keeping its head above water
(CBC analysis) The 2025 federal budget plots a path for the Canadian economy to emerge from the current crisis. But it also highlights just how deep a hole the economy is in right now and how small the margin for error is as Canada navigates the perils of a trade war.
“This budget must be generational in its ambition and serve to shape our economy and our nation’s future,” said Finance Minister François-Philippe Champagne. “There is no place for withdrawal, ambiguity or even standing still; only for bold and swift action.”
The budget lays out various scenarios for economic growth over the next five years. The so-called upside scenario envisions a world in which U.S. tariffs are rolled back and global trade works its way back to normal.
Under the “downside scenario,” the Canadian economy would contract through the quarter running from April to June. Unemployment would peak around 7.4 per cent and Canadian growth would be weak for several years.
That scenario would see a further weakening of the Canadian economy — and it’s not far fetched. It is still entirely possible that next month’s GDP numbers will show Canada slipped into a recession this summer and unemployment has been rising for months.
What to Know About Canada’s New Budget
Ian Austen
The government of Prime Minister Mark Carney unveiled a program of big spending to spur Canada’s economy and reduce its dependence on the United States.
(NYT) Prime Minister Mark Carney of Canada on Tuesday unveiled a budget that would spend tens billions of dollars on major infrastructure projects to boost the sluggish economy, while also saving billions from slimming down government.
The budget is the second piece of Mr. Carney’s two-pronged response to potential economic chaos from President Trump’s trade war. Last week, he was in Asia promoting the first element, expanded trade with countries other than the United States.
The first federal budget under Mr. Carney’s leadership comes at an uncertain time for Canada’s economy, which is deeply entwined with that of the United States. Mr. Trump’s tariffs and threats have exacerbated slow growth and rising unemployment, particularly among younger Canadians. The cost of food and other essentials is climbing and, despite some easing on house prices, owning a home remains only a dream for many.
Most of the major budget items had already been outlined by Mr. Carney, an economist and the former central banker of Canada and England, and his ministers, since he assumed office in the spring. Their success will test his frequently repeated line that Canadians “can give ourselves more than any foreign government can ever take away.”
Federal budget 2025: Five biggest takeaways for Quebec
Canada’s 2025 federal budget comes at a delicate moment for the Canadian economy. But Finance Minister François-Philippe Champagne argues that now is the time to invest and build.
4 November
Nova Scotia MP Chris d’Entremont resigns from Conservative caucus to join the Liberals
Liberals are 2 seats shy of majority with floor-crossing

3 November
Can the federal budget reset Canada’s economy?
Interest rates can only do so much. So, pressure now turns to the federal budget

27 October
Canada’s exports drop as tariffs weigh heavy on economy: Statistics Canada
(Bloomberg) U.S. tariffs on key Canadian goods and weakening global demand triggered a sharp pullback in exports in the second quarter of 2025, according to new data released by Statistics Canada.
Exports dropped 7.5 per cent in Q2 after the U.S. implemented tariffs on key Canadian goods like steel, aluminum, automobiles and other goods not compliant with the Canada-United States-Mexico Agreement.
“This was the largest quarterly decline since 2009, excluding the COVID-19 pandemic period,” according to the report released Monday.
The slump extended to manufacturing, wholesaling and employment, all of which posted declines or stalled growth.

11 October
Alberta’s pipeline pursuit could erode Indigenous support for infrastructure projects, B.C. First Nations leader says
(Globe & Mail) A massive tanker ship, the Diamond Gas Crystal, departed Kitimat this week loaded with tonnes of liquefied natural gas bound for customers in Asia. It was the 16th tanker load since production began at LNG Canada in the summer.
Once Phase 1 is in full swing, the facility will be filling 170 tankers annually with a product that is classified, in the event of a marine spill, as noxious and hazardous. The ships’ route to open water winds through a series of channels for almost 300 kilometres, a rugged and remote section of the coast known for fierce winter storms.
All of this is taking place with the blessing of Coastal First Nations, who strongly oppose tankers carrying heavy oil in these waters.
While not universal, there is broad Indigenous support for LNG projects in B.C. The 297-metre-long Diamond Gas Crystal was named in honour of an Indigenous leader who helped secure LNG development in Kitimat, former Haisla chief councillor Crystal Smith.
But these multibillion-dollar investments are at risk, B.C. Premier David Eby says, if Alberta succeeds in persuading Ottawa to lift the current oil tanker ban on the North Coast.

25 September
Federal budget watchdog forecasts sharp rise in deficit to $68.5B this year
Update does not include plans for ramped-up defence spending
The parliamentary budget officer said Thursday he expects the coming fall budget will reveal a sharp increase in Ottawa’s deficit that puts the government’s previous fiscal anchors in jeopardy.
Ottawa’s fiscal watchdog Jason Jacques now projects the federal government will post an annual deficit of $68.5 billion this year, up from $51.7 billion last year.
He said in a new report that he expects the federal debt-to-GDP ratio is no longer on a declining path over the medium term — a metric that previously was a key fiscal anchor for the federal government.
The PBO’s update does not include plans to incrementally ramp up defence spending to meet the updated NATO benchmark of five per cent of GDP by 2035, nor does it factor in Ottawa’s announced plans to reduce public service spending over the next three years.

24 September
Canada’s next era of nation-building depends on AI and quantum innovation
The upcoming budget will be critical in charting this country’s course in technological growth.
By Gabriel Miller, president and CEO of Universities Canada
(Hill Times Opinion) Prime Minister Mark Carney’s decision to fast-track flagship national projects—from LNG in northern British Columbia, to nuclear power in Ontario—signals a bold push to reshape Canada’s economic backbone. But bricks and steel aren’t enough. Our prosperity now hinges on mastering the artificial intelligence and quantum revolutions already reshaping every industry, including these very projects.
This work is already underway at Canadian universities. In labs across the country, students, researchers, and professors are driving breakthroughs in secure quantum communications, advanced materials, and AI applications for health care and infrastructure. They’re building the next generation of cybersecurity researchers because today’s tools won’t stand up to AI and quantum-powered threats. These are innovations with direct relevance to Canada’s priorities: safeguarding critical systems, modernizing the grid, and improving patient care.
Trust universities to lead Canada’s next wave of innovation
The talent, infrastructure, and ideas are here. What’s needed now is federal leadership that matches the scale of our ambitions.
Universities are positioned to lead Canada’s future innovation due to their existing talent, infrastructure, and research, but they require greater federal leadership and investment to realize their full potential in developing new technologies and addressing national challenges like housing and climate change. Strong universities like the University of Toronto, the University of British Columbia, and McGill University provide a foundation for this, but sustained and ambitious governmental support is crucial for translating these ideas into societal and economic impact.

Ottawa launches AI task force, moves up deadline to deliver updated national strategy
At the ALL IN AI conference in Montreal on Wednesday, Minister of Artificial Intelligence and Digital Innovation Evan Solomon promised ‘new tools’ to help entrepreneurs scale their companies, secure investment and keep their headquarters in Canada, but did not outline any new policies or strategies to do so.
The federal government is launching a task force on artificial intelligence and will deliver an updated national strategy to support and develop the sector by the end of year.
The task force will suggest policies to improve research, talent, adoption and commercialization of AI in Canada, among other goals, Mr. Solomon said.
“They’re going to deliver bold, practical ideas that move quickly from paper to practice,” he said. The task force will report back in November, and the ideas are part of a consultation process to help inform the new AI strategy.
The government’s efforts over the past few years have helped spur AI research in Canada, but the country has lagged when it comes to commercializing the technology. The largest and most influential AI developers, such as OpenAI and Anthropic, are based in the United States, while Canadian AI talent is frequently poached by foreign companies.
… As the government also prepares to roll out a strategy for the nascent quantum computing sector in October, many experts fear the country could squander its lead, as with AI. “This is bigger than quantum. Time and again, Canada has been an early leader in developing frontier technologies, only to see others capture the value through commercialization and scale,” said Lisa Lambert, chief executive of Quantum Industry Canada, a consortium for the sector. “We cannot afford to continue repeating that pattern.”
Ms. Lambert said the quantum strategy should focus on scaling companies, building supply chains and supporting Canadian technologies in markets abroad.

21 September
Canada should be ready for ‘generational investment,’ Champagne says ahead of budget
Conservatives waiting to see full document before deciding whether to support Liberals
“This is like 1945,” Champagne said in an interview on Rosemary Barton Live that aired Sunday morning. “This is the moment where Canada needs to reinvent itself…. For me, it’s more like a down payment in the future prosperity of Canada.”
Champagne has spent the last few days laying the groundwork for what is expected to be a costly budget that he argues is necessary for Canada to steer itself away from its reliance on the United States, which still has tariffs on Canadian goods.
“We need to make generational investments in order to be less dependent, more resilient and bring prosperity across our nation,” he told host Rosemary Barton.
“People understand that a lot of the costs we have to incur is in direct relation to the changing world economic order that we’ve seen. Some of these things have not come by choice but because we needed to respond to support our workers.”

17 September
Canada’s new government to release Budget 2025 on November 4, 2025

10-14 September
Carney announces launch of new housing agency, earmarks funding for new projects
Build Canada Homes was part of Liberal promise to double housing construction
Prime Minister Mark Carney announced Sunday afternoon the launch of Build Canada Homes, the federal government’s new agency that will oversee federal housing programs.
The government is touting Build Canada Homes as a centralized agency to oversee new affordable housing programs initiated at the federal level.

Carney announces five major projects to be reviewed for fast-tracking
(Globe & Mail) Prime Minister Mark Carney announced the first projects that will be reviewed for fast-track approval under Ottawa’s Building Canada Act and said he’s working with Alberta on a carbon capture and storage project that could ultimately lead to a new oil pipeline.
The five projects being referred to the new Major Projects Office include LNG Canada Phase 2, which would expand the liquefied natural gas export facility at Kitimat, B.C. Also on the list are modular reactors at Ontario’s existing Darlington Nuclear Generating Station; an expansion by the Port of Montreal in Contrecoeur, Que.; Saskatchewan’s Foran McIlvenna Bay copper mine project; and the Red Chris Copper and Gold Mine expansion in B.C.
The five projects unveiled Thursday are already under way and Mr. Carney said their referral to the Major Projects Office is aimed at getting them across the finish line.
Carney Says Major Projects Coming to Combat Trade War ‘Crisis’
Takeaways by Bloomberg AI
Canadian Prime Minister Mark Carney will announce the first wave of major projects to be fast-tracked under a new law on Thursday.
The law aims to speed up regulatory reviews for projects deemed to be in the national interest, with the goal of permitting them within two years.
Carney’s government plans to unveil several initiatives in the coming months, including a government homebuilding agency and a new climate competitiveness strategy.

8 September
Opportunity blooms in wild rose country: Federal government plants Major Projects Office in Calgary
(Borden Ladner Gervais) In the wake of the Building Canada Act (BCA), the Prime Minister’s office has announced that it intends to launch a Major Projects Office (MPO) to facilitate the advancement of major infrastructure and energy projects that are of national interest. These projects may include, without limitation, ports, railways, energy corridors, critical mineral developments and clean energy initiatives.
The MPO will be headquartered in Calgary, Alberta, with regional offices in other major Canadian cities. The BCA and MPO come largely in response to American tariffs and represent part of Canada’s action plan to promote long-term economic prosperity and independence. Calgary, with its well-known entrepreneurial spirit and long history of resilience in face of shifting global markets, is the perfect base of operations.
The MPO’s mission is to get nation-building projects built faster. It intends to do so by: (1) streamlining and accelerating regulatory approval processes; and (2) helping structure and co-ordinate financing of these projects. In practice, this will include:
identifying projects of national interest and fast-track their development by creating a single set of approval conditions (with the goal of approving those projects in less than 2 years); and,
attracting domestic and global capital to these major projects by structuring and co-ordinating financing from the private sector, provincial and territorial partners, and government initiatives, including the Canada Infrastructure Bank, the Canada Growth Fund, and the Indigenous Loan Guarantee Program.
Dawn Farrell, Board Chair of Trans Mountain Corporation (among other things), will spearhead the initiative as Chief Executive Officer (CEO) of the MPO. Farrell, with Calgarian roots, brings more than 35 years of experience to the role. She has previously served as President and CEO of both Trans Mountain Corporation (Trans Mountain) and TransAlta Corporation (TransAlta). Her resume is robust, including overseeing Trans Mountain’s multibillion-dollar expansion project and TransAlta’s transition from coal to renewables