CANADA STRONG BUDGET 2025
Building Canada Strong. Spending less to invest more.
The Honourable François-Philippe Champagne, November November 2025
"The world is in a 'generational shift', not a transition. Canada's response must be 'active, ambitious nation-building'. The plan is to 'spend less so we can invest more' by cutting operational spending to fund 'generational investments' in growth, housing, and defence, all while being grounded in 'fiscal responsibility'."
Fiscal Snapshot
Projected Deficit (Billions)
| Year | Deficit ($B) | % of GDP |
|---|---|---|
| 2025-26 | $78.3 | 2.5% |
| 2026-27 | $65.4 | 2.0% |
| 2027-28 | $63.5 | 1.9% |
| 2028-29 | $57.9 | 1.6% |
| 2029-30 | $56.6 | 1.5% |
Projected Federal Debt (% of GDP)
| Year | Debt-to-GDP |
|---|---|
| 2025-26 | 42.4% |
| 2026-27 | 43.1% |
| 2027-28 | 43.3% |
| 2028-29 | 43.3% |
| 2029-30 | 43.1% |
Key Fiscal Anchors
Balancing day-to-day operating spending with revenues by 2028-29.
Source: PDF Page 71Maintaining a declining deficit-to-GDP ratio.
Source: PDF Page 71
Generational Investments (5-Year Plan)
Total: $280 Billion
41%
$115B
Infrastructure
39%
$110B
Productivity & Competitiveness
11%
$30B
Defence & Security
9%
$25B
Housing
Analysis: The $60 Billion 'Comprehensive Expenditure Review'
This is the "Spend Less" part of the plan. The government is cutting existing programs to fund new priorities.
Workforce Reduction
~40,000 Positions
Estimated decline of about 40,000 positions (10%) from 2023-24 peak, facilitated by a new Early Retirement Incentive (ERI) program.
Key Program Cuts & Recalibrations
2 Billion Trees Program
Program will be wound down; uncommitted funds will be returned.
Source: PDF Page 220Net Zero Accelerator
Program will be wound down due to 'declining demand'.
Source: PDF Page 219International Development Assistance
Recalibrated to return to a 'pre-pandemic level'.
Source: PDF Page 219Medical Cannabis Benefits (VAC/RCMP)
Adjusted to align reimbursement rate 'closer to the market price'.
Source: PDF Page 219DND Fleet Divestment
Retiring selected fleets 'nearing end of service life' to save on 'costly repairs and sustainment costs'.
Source: PDF Page 220
Summary of Key Tax Measures
Middle-Class Tax Cut
Lowering the first marginal personal income tax rate from 15% to 14%.
GST Rebate for First-Time Home Buyers
Eliminating the GST on new homes up to $1 million for first-time buyers.
Personal Support Workers Tax Credit
A temporary refundable tax credit of up to $1,100 per year.
Key Initiatives by Chapter
Building a Stronger Canadian Economy
Major Projects Office
Launching the MPO as a 'single point of contact' to fast-track nation-building projects by streamlining reviews and approvals.
Productivity Super-Deduction
A new set of enhanced tax incentives to allow businesses to write off a larger share of new capital investments immediately.
SR&ED Enhancement
Increasing the annual expenditure limit for the enhanced 35% tax credit from $4.5 million to $6 million.
Sovereign AI Infrastructure
$925.6 million over five years to support a large-scale sovereign public AI infrastructure.
Build Communities Strong Fund
$51.0 billion over 10 years for a new fund to support community and regional infrastructure projects.
Analyst's Summary: What This Budget Means for You
This budget represents a major pivot. Here’s what it means in simple terms.
The Analyst's Take: The Big Gamble
This budget is a massive pivot. It's a gamble that cutting taxes and existing programs to fund a new 'Fortress Canada' industrial and military strategy will create more prosperity and security in the long run. The government is trading 'business as usual' for a state-led plan to 'rebuild, rearm, and reinvest'.
