AI-Summary – News For Tomorrow
Prime Minister Mark Carney’s Liberal government is set to unveil a bold budget aimed at reforming Canada’s economy in the face of strained relations with the U.S. due to Trump’s trade policies. The budget will include increased defense spending to meet NATO targets and investments in national projects to bolster economic sovereignty. While emphasizing the need for “big, bold risks,” Carney plans to partially offset spending increases with cuts to government operating budgets. The budget, potentially around CAN$100 billion, requires opposition support to pass, as the Liberals lack a parliamentary majority. Despite softened popularity and criticism over trade deal failures, analysts predict the budget will pass following negotiations, and snap elections aren’t necessarily favorable for opposition parties.
News summary provided by Gemini AI.
Canada’s new Liberal government unveils its first budget on Tuesday, with Prime Minister Mark Carney saying “bold risks” are needed to reform an economy facing unprecedented economic threats from the United States.
US President Donald Trump’s trade policies have hit Canada hard, driving up unemployment and squeezing businesses in crucial tariff-hit sectors like autos, aluminum, and steel.
Carney, a former central banker who only entered politics in January, has warned Canadians that the Trump-era disruptions in US-Canada relations are not a passing phase.
“Our relationship with the United States will never be the same as it was,” he told students at the University of Ottawa in a pre-budget speech last month.
Carney said his government would propose a budget that addresses the stark new geopolitical realities facing Canada.
Among the headline items will be major increases in defense spending to bring Canada in line with NATO targets.
Funds will also be allocated to a series of national projects that Carney has said are key to Canada’s economic sovereignty, given the “rupture” in economic ties with the United States.
“We used to take big, bold risks in this country. It is time to swing for the fences again,” he said in the Ottawa speech.
“This is what this upcoming budget will be about: building, taking control, and winning.”
Carney and Finance Minister Francois-Philippe Champagne have flagged that spending increases will be partly offset by cuts to government operating budgets.
But those savings will not cover all the new costs.
“I wouldn’t be surprised if it were around CAN$100 billion ($71 billion),” she said.
– Confidence vote –
Carney’s April election win left his Liberals three seats short of a majority in Canada’s parliament. That means the government needs opposition support — or abstentions — to pass its budget.
Because the budget is a confidence vote, its defeat would trigger fresh elections.
“Anything is possible,” said McGill University political scientist Daniel Beland, stressing the Liberals will “try everything” they can to pass the budget.
Polling suggests Carney’s popularity has softened since the election.
