Finance Minister Francois-Philippe Champagne is framing the 2025 federal budget as a choice between generational
investments or scaling back supports. Champagne tabled the budget in the House of Commons this afternoon.
Members of Parliament will vote on the document later this month which will be a confidence test that determines whether the government survives.
While nobody is saying they’re eager for an election, none of the opposition parties so far has pledged their support.
Conservative Leader Pierre Poilievre has said his MPs would vote for a budget that brings down the cost of living.
New Democrat leader Don Davies says some members of his caucus may consider abstaining from the vote altogether.
INTERNATIONAL
The Carney government is putting diplomatic dollars behind its efforts to boost trade while cutting Global Affairs Canada’s budget by more than $1 billion a year.
The cuts begin with nearly a half-billion reduction in Global Affairs’ budget next year, rising to $1.1 billion annually three years from now.
The budget also slashes $2.7 billion from foreign aid, and calls for Canada to refocus its international presence when it comes to advocacy, security and development.
At the same time, the budget calls for 1.7 billion dollars in new investments to make Canada more competitive in trade, though it doesn’t say how long that funding would be offered.
The government wants to streamline its Trade Commissioner Service to have bureaucrats do more to remove long-standing trade irritants.
The budget explicitly links Canada with Asia and Europe, with not a single reference to the Trudeau government’s Africa strategy that aimed to expand trade with the booming continent
CRITICAL MINERALS
The federal government is preparing to take out equity stakes in critical mineral projects, in a bid to opening up
mining and position Canada as a major global supplier.
In the federal budget released Tuesday in Ottawa, the government outlined a plan for a $2-billion “critical minerals
sovereign fund” over five years for equity investments, loan guarantees and offtake agreements.
Ottawa is also planning on adding a dozen more critical minerals to its exploration tax credit list.
So far, many of the gems on the list applied to Canada’s EV and battery supply chain. But the addition of minerals like tin, tungsten, and chromium, have defence applications. They’re also necessary in the energy sector to build semiconductors and develop clean technology.
Last week in Toronto, Energy Minister Tim Hodgson signed Canada onto the G7’s critical minerals production alliance in a bid to push back against China’s dominance, and influence, of the global critical minerals market.
China is a major critical mineral miner and even bigger refiner, with an average market share of 70 per cent for 19-out-of-20 key minerals, according to the International Energy Agency.
For rare earth elements, China accounts for 91 per cent of global refining production.
CLIMATE
Finance Minister Francois-Philippe Champagne says the federal government is likely to scrap the emissions cap on oil
and gas production as other moves likely will make that policy unnecessary.
The government opened the door to ending the emissions cap in the federal budget today, as it also provided the first glimpse of its promised climate-competitive strategy to drive more clean growth investments in Canada.
The new plan appears to rest heavily on strengthening the industrial carbon price, including charting a pricing regime beyond 2030 and expanding carbon markets that underpin the system.
The budget says with a strengthened industrial carbon price, improved regulations to cut methane emissions and scaling up the use of carbon capture and storage systems would eliminate the need for the emissions cap.
The emissions cap has triggered major disagreements between the federal Liberals and the Alberta government, and scrapping it has been among the top demands of the opposition Conservatives.
Prime Minister Mark Carney said last spring he intended to maintain the cap, but more recently shifted his stance saying keeping it depended on what else could be done to lower emissions.
IMMIGRATION
Ottawa’s immigration levels plan for the next three years prioritizes economic immigrants for permanent residency while cutting the number of temporary immigrants through a major drop in student visas.
The new plan is contained in the federal budget documents published today, as the government continues to overhaul its immigration system, cutting back drastically on the number of temporary residents in the country.
The plan cuts international student admission targets almost in half to around 150,000 annually, starting next year.
The planned number of temporary workers is being cut to 230,000 in 2026, down from about 368,000 this year.
The government plans to admit 380,000 new permanent residents annually for the next three years, with almost two-thirds of them going to economic immigrants.
The number of permanent residency visas being issued for family reunification and humanitarian reasons is being reduced.
FOREIGN AID
The Carney government is cutting Canada’s foreign aid spending to a level it says is in line with Ottawa’s aid
spending before the COVID-19 pandemic, but without specifying this year’s amount.
Tuesday’s budget forecasts $2.7 billion in cuts over four years from programming for things like global health projects.
Ottawa is also cutting funding for the International Development Research Centre, a world-renowned aid analysis
institution, starting with a roughly seven per cent cut next fiscal year.
The budget refers to “leveraging innovative tools” in foreign aid and “focusing support for countries that need it the
most.”
Canada spent $6-billion dollars on core foreign aid in the last reported fiscal year ending in March 2024, along with $2.6 billion for international financial assistance such as loans for Ukraine.
Ottawa increased its development and humanitarian spending during the COVID-19 pandemic, in part to reboot stalled efforts to end major illnesses such as AIDS and tuberculosis.
PUBLIC SERVICE
The federal government intends to slash the public service by 10 per cent over the next three years, eliminating up to
40,000 jobs.
The cuts don’t align with the Carney government’s election promise to only cut the number of federal employees through attrition, such as voluntary departures and not replacing people who retire.
The budget tabled today aims for roughly 330,000 public sector workers by March 2029, down from a peak of nearly 368,000 workers in spring 2024.
The plan also will see a reduction of 1,000 executive positions over the next two years, from the more than 93,000
executives as of March.
Prime Minister Mark Carney had pledged in the April election campaign to what he called “capping, not cutting” the public service.
The Public Service Alliance, which is the largest union representing federal public servants, has warned about job cuts,
proposing cutting the number of executives and scaling back bonuses.
DEFENCE
The federal government has announced plans to shovel $73 billion in new money into national defence over
the next five years.
The massive defence spending plan, which is light on details, comes as Canada strives to meet aggressive new NATO
spending commitments.
Earlier this year, Prime Minister Mark Carney announced $9 billion for defence to allow Canada to reach its NATO commitment of spending the equivalent of two per cent of its GDP on defence in 2025.
Now, Canada is looking to hit the even higher goal of five per cent of GDP by 2035, which represents tens of billions in additional spending.
The department of finance says the budget sets the groundwork for eventually reaching that benchmark.
The 2025 budget also hints at what’s coming in the government’s long-promised Defence Industrial Strategy and teases that Ottawa will put up funds to conduct domestic space launches.
This report by The Canadian Press was first published Nov.4, 2025.
