Canada unveils budget to cut US reliance with C$142bn in new spending

A budget built on independence from Washington

Canada's government tabled its second budget under Mark Carney on Thursday, 5 November. The 532-page document is titled 'Masters of Our Destiny' and was presented in the House of Commons by Finance Minister François-Philippe Champagne. The budget says diversifying trade will take time because of the depth of economic ties with the United States, but that the change is under way. Most major items had been announced earlier, and details remain scant with long timelines for many of the proposed measures.

“Canadians know that we are living through extraordinary times. The rules we counted on no longer seem to hold.”

Carney described the budget as the next step in making the country more independent and sovereign. He said it focuses on growth, on people and on sovereignty.

“That's what this budget does: it's the next big step in our action plan to make this country more independent, more sovereign,”

Spending on strategic projects

The budget relies on better than expected revenue from oil prices, which BBC reports were bolstered by the Iran War, to fund C$142bn in new spending over the next five years. The deficit is above C$50bn with no path to balance, although Champagne said the operating portion of the budget will be balanced within the coming year. The budget creates the Canada Strong Fund, a sovereign fund with C$25bn meant to invest in large national projects and draw in private capital. Ottawa also plans a 'mega-deduction' tax incentive for investors and has set aside C$50bn to double electricity output. Further funds target critical minerals and the auto sector.

New spending over five years142

Electricity output doubling50

Canada Strong Fund25

Homelessness over four years11.2

Tariff relief already announced44

New spending over five years

142 C$ billions

Electricity output doubling

50 C$ billions

Canada Strong Fund

25 C$ billions

Homelessness over four years

11.2 C$ billions

Tariff relief already announced

44 C$ billions

Data from the article text

Homelessness and cost of living

The budget includes C$11.2bn over four years to combat homelessness, covering supportive housing, mental health and addictions treatment. The government also pledged to work with municipal and provincial counterparts to end homelessness within a decade. Statistics Canada reported last year that one in eight Canadian households has experienced homelessness in its lifetime. A grocery benefit will be boosted, estimated at C$2,570 for a family of four within one year. Opposition Conservatives have pressed the Liberal government on cost of living.

Trade, tariffs and the US midterms

The budget counts C$44bn in relief already committed for workers and businesses hit by US tariffs. Trade talks in Washington collapsed in August, and on Sunday, 1 November, Carney said in a social media post that after conversations with Trump, officials in both countries were moving toward restarting them. Democrats won majorities in both the House and Senate in the midterm elections on Tuesday, 3 November. Asked about the vote, Carney said the government stays focused on the same issues.

“Yes, it's important what happens in the U.S. and things will evolve. But we're focused here.”

Trade Minister Dominic LeBlanc said Ottawa had taken note of the results, while stressing that the government in Washington, not the Democratic-led Congress, handles trade negotiations. The Bank of Canada also renewed its policy framework, confirming that hitting its 2% inflation target is its most important priority.