Mark Carney’s First Budget: Investing More, Spending Less

Following a successful trip to Asia, Canadian Prime Minister Mark Carney is preparing to unveil his first federal budget — one experts say could become the defining political event of the year and set Canada’s economic direction for years ahead.

It is the Liberals’ first fiscal plan in almost a year and the first test of Carney’s agenda since his pre-election platform. But this budget comes amid difficult circumstances — the trade war with the United States has weakened Canada’s economy, reducing revenues while defence and infrastructure costs continue to climb.

Under a new model inspired by the U.K., the budget will be divided into operating and capital spending. Carney says the government aims to “spend less and invest more,” meaning new borrowing will focus on infrastructure, housing, and innovation rather than salaries and ongoing programs.

The deficit is projected to reach $75–90 billion, nearly double earlier expectations. Conservatives are demanding a $42-billion cap and accuse the government of “reckless spending.” Finance Minister François-Philippe Champagne, however, insists it’s time for “generational investments” to reduce Canada’s reliance on the U.S. economy.

The opposition remains undecided: Conservatives say they might back an “affordable” budget if taxes are cut, while the NDP wants measures that directly support working Canadians.

Analysts warn that if Canada’s debt grows faster than its economy, higher interest payments could crowd out social programs. Still, Carney maintains his plan will ensure sustained growth and long-term financial stability for Canada.