Prime Minister Mark Carney has unveiled his government’s first federal budget, hoping to invest $1 trillion to build a more self-sufficient economy.
On Tuesday, Carney’s Finance Minister François-Philippe Champagne presented the budget, in a nearly 500-page document that details the country’s current economic situation and priority of investments for the next few years.
“This is a generational shift, this is not just an ordinary transition. We’re gonna build this country like never before, we’re gonna protect our sovereignty, we’re gonna empower Canadians on the shop floor, in the fields, and in their homes, so this is really a generational moment,” Champagne told reporters on Tuesday.
The new plan reflects changing global trading, after the U.S. President Donald Trump’s tariffs led to a world-spread economic shift.
According to a statement by the prime minister, the budget aims to accelerate $1 trillion in investment over the next five years in order to strengthen the country’s internal economy and communities from coast to coast, with plans for housing, infrastructure, trade, transportation, and much more.
“Canadians wanted to come together, we want to take control of our futures. That’s what this does. This gives us control of our future. We’re gonna build together. We’re gonna build Canada strong,” Carney told reporters on Tuesday.
From billions of dollars of investments across all different sectors that matter to Canadians, here are some takeaways from the new budget.
INFRASTRUCTURE INVESTMENT
A major part of Carney’s federal budget includes the new Build Communities Strong Fund. The plan involves $51 billion in investments over the next 10 years, followed by $3 billion in annual investments aimed at revitalizing infrastructure across the country. This includes improving the state of Canadian hospitals, colleges, roads, bridges, transit systems and more.
Over the next 10 years, the fund will also be used to invest $17.2 billion in provincial and territorial infrastructure, focusing mainly on housing, health care and education. From this investment, the government will be putting $5 billion during three years into its Health Infrastructure Fund, using the money to improve infrastructure in hospitals, urgent care facilities, and emergency rooms.
A $27.8-billion community stream of this fund will also be invested in local infrastructure, including roads, bridges, water systems and community centres.
HOUSING INVESTMENTS
According to the Canada Mortgage and Housing Corporation (CMHC), Canada needs to build nearly 430,000 to 480,000 units over the next 10 years in order to improve housing affordability, restoring it to 2019 levels.
In order to tackle the housing crisis, the federal government will launch a Build Canada Homes agency, focused on building affordable housing. Over the next five years, this agency will invest $13 billion to support construction, reduce red tape that slows down construction, and restore affordability.
Starting next year, the government will also raise its annual limit on Canada Mortgage Bonds (CMB) from $60 billion to $80 billion to facilitate access to mortgage funding, and help Canadians finance multi-unit housing.
The budget also aims to help Canadians buy their first homes, eliminating the Goods and Services Tax (GST) on homes up to $1 million and reducing it on homes between $1 million and $1.5 million.
In order to address challenges related to housing affecting Indigenous peoples, the government is also investing $2.8 billion in building urban, rural, and northern Indigenous housing, partnering with First Nations, Inuit, and Métis for effective completion of projects.
BOOSTING YOUTH EMPLOYMENT
As part of the government’s plan to increase life affordability, this year’s budget also includes measures to help young people pursue training and find jobs.
With resume-building events, long job fair lineups, and record applications for local jobs throughout the year, many young Canadians are currently experiencing a difficult job market across the country, with youth unemployment rate reaching 14.7 per cent in September, according to Statistics Canada.
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In order to tackle youth unemployment, the government is proposing making a series of investments to help 175,000 youth build skills and find jobs in 2026 and 2027, including:
- $594.7 million in two years to its Employment and Social Development Canada for Canada Summer Jobs to create 100,000 summer jobs next summer;
- $307.9 million in two years to provide training, mentorship and counselling to 20,000 youth facing unemployment barriers;
- $635.2 million in three years to support 55,000 work-integrated learning for post-secondary students.
REDUCED IMMIGRATION LEVELS
According to the budget, as Canada’s immigration system continues to evolve, it has become difficult to manage the arrival of newcomers without exceeding the country’s capacity to do so. With the percentage of temporary residents jumping from 3.3 per cent in 2018 to 7.5 per cent in 2024, the arrival has created pressure in Canada’s housing, healthcare and education.
In order to tackle these concerns, the budget is also proposing a 2026-2028 Immigration Levels Plan that will reduce immigration levels that will cost $168.2 million over four years. With measures including:
- Reducing the target for new temporary residents admissions from 673,650 in 2025 to 385,000 in 2026, and 370,000 in 2027 and 2028;
- Reducing permanent resident admissions from 395,000 in 2025 to 380,000 per year for three years;
- Introducing a one-time initiative to recognize Protected Persons in Canada as permanent residents over the next two years;
- Introducing a one-time initiative to transition 33,000 work-permit holders to permanent residency in 2026 and 2027.
ADOPTING AI TO BOOST PRODUCTIVITY
The government is also investing a significant amount of its budget to invest in technology that can boost productivity, including spending $7.75 billion over three years to boost day-to-day operations.
As part of this push, the government is considering investments in technology and AI to make public services more efficient, cheaper, and faster.
- Shared Services Canada, in partnership with the Department of National Defence and the Communications Security Establishment will develop an AI tool for government use, to protect sensitive data, support tech companies and boost digital security;
- The Department of Justice will use AI to take over routine work, so staff can perform more complex tasks;
- Transport Canada will use automatic processes to make work more efficient, including more self-serve online resources;
- Public Services and Procurement Canada will utilize digital technologies to manage project documents.
