Government of Canada releases federal Budget

The Federal Government has released the budget.

Currently, Canada has the lowest net debt-to-GDP ratio in the G7 at 13.3 per cent according to the IMF October 2025 Fiscal Monitor. Canada also has one of the lowest deficit-to-GDP ratios in the G7, second only to Japan. This strong fiscal position enables us to respond to global challenges.

Canada is one of only two G7 economies with an AAA credit rating, making Canada one of the best places to invest in the world.

Canada has the best deal of any U.S. trading partner, with 85 per cent of our trade tariff-free. While some sectors remain deeply impacted, overall, Canadian exporters benefit from the lowest average U.S. tariff of any country at 5.4 per cent.

Budget 2025 rests on two fiscal anchors:

• Balancing day-to-day operating spending with revenues by 2028–29, shifting spending toward investments that grow the economy, and

• Maintaining a declining deficit-to-GDP ratio to ensure disciplined fiscal management for future generations.

• In addition to the two fiscal anchors, Budget 2025 enables $1 trillion in total investments over the next five years through smarter public spending and stronger capital investment.

Budget highlights:

Over five years: about $280 billion in capital investments (on a cash basis $450 billion) to drive productivity, competitiveness and resilience.

In housing: A flagship initiative, “Build Canada Homes” with $13 billion over five years to double the pace of home construction.

For defence: $30 billion over five years for the largest defence investment in decades — including meeting NATO commitments, modernizing infrastructure, and new personnel.

On trade: A new Trade Diversification Strategy + corridors fund aimed at doubling overseas exports in a decade and unlocking ~$300 billion in new opportunities.

On productivity: A “Productivity Super-Deduction” for business investment, greater tax incentives for R&D, support for AI/clean tech.

Fiscal discipline: The government aims to balance day-to-day operating spending with revenues by 2028-29, while maintaining a declining deficit/GDP ratio.

Savings: The budget outlines $60 billion in savings over five years through expenditure review, cutting duplication, and reducing red tape.

“Buy Canadian” policy: When the government makes purchases, Canadian-made goods and suppliers will be prioritized — for example, steel, aluminum, and lumber.

Immigration & talent: A $1.7 billion International Talent Attraction strategy, and plans to bring immigration levels to “sustainable” by restoring control and clarity of the system.

Climate & clean economy: A Climate Competitiveness Strategy turning Canada’s natural and clean-energy potential into lasting growth, including clean-economy investment tax credits.