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Canadian Prime Minister Mark Carney’s government will unveil its first national budget on Tuesday, a financial plan he says will “provide the answer” for an economy strained by US tariffs.
Carney, who previously led the central banks of both Canada and the United Kingdom before entering politics earlier this year, has portrayed himself as the right leader to guide the country through the unprecedented turbulence in relations with Washington under President Donald Trump.
US tariffs have hit Canada’s key sectors, including automotive, aluminium, and steel, driving up unemployment and placing heavy pressure on manufacturers.
His Liberal administration has framed the budget as a response to shifting geopolitical realities. While the full details remain under wraps until the finance minister’s presentation in parliament, officials have signalled significant increases in defence spending to meet NATO commitments.
The government also plans significant investments in national infrastructure, energy production, and port expansion to strengthen Canada’s economic independence. Additional funds will support the extraction and processing of critical minerals from remote regions, which Carney has described as essential to securing the country’s long-term economic sovereignty.
Finance Minister François-Philippe Champagne described the proposal as “an investment budget,” saying: “The idea is to build the Canada of tomorrow.”
Carney, who succeeded Justin Trudeau in January and secured a full term in April, has repeatedly cautioned that the trade rift with the United States “is not a passing phase.” He said the budget aims to “reduce our reliance on the United States,” though such a shift “cannot happen overnight.”
The Liberals currently fall three seats short of a parliamentary majority, meaning the government will need support or abstentions from opposition MPs to pass the budget. Its failure would automatically trigger a general election.
Conservative leader Pierre Poilievre has made his backing conditional on measures to reduce the deficit, though analysts expect the budget to include a substantial shortfall.
