Looking ahead: will Budget 2025 deliver much needed certainty?

The Carney government’s first budget will be tabled next week in Parliament on November 4, 2025. Despite efforts otherwise, expectations for the budget are heightened amidst a return to a turbulent relationship with the U.S. on trade.

In many ways, Budget 2025 might be the nexus point of the ambitions of government looking for transformative change, while simultaneously addressing a difficult balance sheet and the reality of a slowing economy.

Indeed, the overarching factor shaping today’s federal political landscape is the U.S. President’s approach to trade and industrial policy. As such, all federal initiatives must be seen through the lens of Canada’s strategic response to the economic impacts of new and emerging U.S. tariffs, securing a new trade deal with the U.S., alongside its approach to expanding global trading relationships.

Part and parcel with this economic strategy is heightened emphasis by the federal government on Canada’s sovereignty and domestic capacity in strategic sectors, notably energy, manufacturing and artificial intelligence.

Sabre rattling by opposition parties in the lead up to the budget has been all too familiar after years of minority federal government. Under the headline “Canadians Can’t Afford to Eat,” Conservative Leader Pierre Poilievre is calling for a reversal of Liberal policies that he argues have caused inflationary deficit and eroded affordability. Both Bloc Quebecois Leader Yves-Francois Blanchet and NDP Interim Leader Don Davies have submitted their own budget wish lists, while Blanchet added a threatening tone "[the Liberals] know our conditions, and if they wake up a little bit late, it's once again their problem.”

In an attempt to temper opposition demands and public expectations surrounding the 2025 fall budget, Prime Minister Mark Carney delivered a rare live-streamed pre-budget address.

With the declarative statement, “Canada has what the world wants,” Carney promised a budget that “will make generational investments” in the following three areas:

• Protecting communities, borders, and our way of life;
• Building a stronger economy where everyone has a chance to get ahead; and,
• Empowering Canadians with new opportunities, better careers, and a lower cost of living.

NATIONAL’s team will be looking to the budget for clarity on the numerous substantial strategies that have been promised since the election, including some that have already been soft launched prior to the budget.

These include the following five areas.

Economic plan to counter tariff impacts

Prime Minister Mark Carney was elected to a near-majority government in this context to provide a steady hand to the turbulent state of the U.S.-Canada economic, energy and security relationship. A package of measures to help workers, sectors, and regions disproportionately impacted by U.S. tariffs were announced earlier this fall. The package is promised to include a $5 billion Strategic Response Fund, a reskilling package for up to 50,000 workers, a new Buy Canadian Policy, a $1 billion Regional Tariff Response Initiative for SMEs amongst other measures. With new developments in the auto sector, and threats of an additional 10 per cent added to the existing tariff levels, NATIONAL will be seeking clarity on further federal funding for sectors being affected by the state of U.S. trading relationship.

Artificial intelligence

Canada’s first ever Minister of Artificial Intelligence and Digital, Evan Solomon, is playing a leadership role in this new Cabinet, with Prime Minister Mark Carney emphasizing the importance of a “Canadian sovereign cloud.” Earlier this month, Minister Solomon launched a national consultation on Canada’s next AI strategy, seeking input via a task force. Whether this new strategy will benefit from new funding in Budget 2025, building on the government’s previous investment of $2 billion in Budget 2024, will be a key question on November 4.

Defence industrial strategy

Another major plank of the Prime Minister’s mandate has been his quick commitment to rapidly ramp up defence spending, meeting the 2% NATO target this fiscal year, and the new 5% target by 2035. To support, the Prime Minister launched the Defence Investment Agency with the aim of streamlining the procurement process and importantly the agency will tie procurement more strategically to domestic industrial benefits. How this funding is delivered is of cross-sectoral and jurisdictional interest.

Build Canada Homes

Another major element of Carney’s election platform was a commitment to rapidly expand Canada’s housing supply to address cost pressures and housing shortfalls. In keeping with his centralized approach in other areas, Prime Minister Carney launched the new Build Canada Homes agency on September 14, with an initial $13 billion investment to rapidly build affordable housing. NATIONAL anticipates details about this funding in Budget 2025.

Climate competitiveness strategy

Earlier this fall, the Prime Minister promised to deliver a new Climate Competitiveness Strategy in Budget 2025. While there’s been little details revealed about this forthcoming strategy, Carney has promised it will “focus on results over objectives… on investment over prohibition.” This statement hints at an openness to consider changes to Trudeau-era environmental regulations, such as the EV availability standard, greenhouse gas emissions cap for oil and gas, and the clean electricity framework. Whether further changes are made, remains to be seen.

Scope of operational cuts

Finally, in the lead up to the budget, Finance Minister François-Philippe Champagne announced a new framework, that will split spending into operational and capital investments, with cuts expected for the operational budget. NATIONAL will be assessing the budget for insight on how these operational cuts will impact program delivery, including federal social and health programs and responsibilities.

Finally, given the minority status of the Carney government, NATIONAL’s Public Affairs experts will be monitoring the confidence vote and legislative process of the budget bill for potential loss of confidence or major changes/concessions. Companies and stakeholders can count our team to navigate the fluid nature of this charged, high-stakes political environment.