Carney government to table budget Thursday with focus on affordability, growth

OTTAWA · Prime Minister Mark Carney's government will table its second federal budget on Thursday. Finance Minister François-Philippe Champagne said the document will outline how Canada becomes "masters of our destiny." The budget is expected to address affordability concerns and detail how individual investors could buy into the new Canada Growth Fund. It will also set immigration targets for the next two years.

Champagne made his remarks on Wednesday while visiting a shoe factory in Montreal. "You need to invest in growth, you need to invest alongside businesses. You also need to invest in sovereignty," he said. The government's economic strategy appears to be showing results, with the Bank of Canada and International Monetary Fund projecting roughly two per cent GDP growth next year. Foreign direct investment into Canada is high, and the government's new "productivity mega-deduction" aims to spur further investment.

Despite positive indicators, affordability remains the top issue for voters. Statistics Canada data shows average hourly wages rose about 2.3 per cent year-over-year as of September, falling short of the three per cent increase in consumer prices. Canadian food bank usage hit record highs this year. Pollster David Coletto said Carney's popularity persists even as people cite affordability as their main concern. "But it doesn't mean that that immunity lasts forever," Coletto said.

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The Conservatives have criticized the government's handling of rising costs. Leader Pierre Poilievre demanded further tax relief on energy products, citing price increases driven by the U.S. and the Israel-Iran war. "Save you money, that's our mission as Conservatives, and it's our demand for the budget," Poilievre told reporters. He later added, "Mark Carney is out of touch. His spending is out of control. Canadians are out of money." The Conservatives also want Ottawa to cut immigration levels further.

NDP Leader Avi Lewis proposed a wealth tax, the construction of 50 government-run grocery stores and a major investment in health care. The Liberal government points to last year's income tax cut, the removal of the consumer carbon tax and temporary gas tax relief as measures it has already taken. National average home sale prices are 22 per cent lower than their March 2022 peak, while rent has dropped about nine per cent from its May 2024 high, according to industry figures. The government's deficit could be smaller than expected due to higher oil prices. The parliamentary budget officer projects the deficit will be about $63 billion this year before rising to $70 billion next year. Carney has changed how spending is reported, splitting it into operational and capital budgets. The government is expected to outline a plan to balance the operational budget by 2027-28. Details are also expected on plans to privatize some major airport operations, with proceeds funding other projects or paying down debt.

The budget will likely provide more information on the cost of the government's defence buildup. Tens of billions of dollars have been directed to national defence over the past year and a half to meet NATO spending benchmarks. Yadude Books reported this week that business leaders called for tax reforms and faster approvals ahead of the budget. "We need to take care of Canadians, make life more affordable," Champagne said. "We've already taken a number of measures to support Canadians, but at the same time we understand we need to support them now."

With files from The Canadian Press and CBC News