Carney’s first budget draws mixed reviews amid slow growth and US tariff pain

Canadian Prime Minister Mark Carney pitched his debut budget as a “bold blueprint for generational investments.” Analysts, however, say it looks more like a cautious compromise, shaped less by vision and more by the arithmetic of a minority government.

Canada is struggling with sluggish growth and the economic fallout from US President Donald Trump’s tariffs, which Carney estimates could shave 1.8 percent off GDP. He defended the plan as a “sea change” that reins in government spending and overhauls the tax system to spur business investment.

“This budget is a sea change in the approach for the government,” Carney told reporters. “It’s about boosting competitiveness while staying disciplined.”

The budget earmarks C$280 billion (US$200bn) over five years for infrastructure while cutting C$60 billion (US$42.6bn) in public spending. The projected deficit will hit C$78 billion (US$55.3bn) next year, double last year’s, before narrowing to C$57 billion (US$40.4bn) by 2030.

Carney’s minority Liberals will need support or abstention from the New Democratic Party (NDP) to pass the plan. The NDP has just seven seats but holds the balance of power. While the NDP praised new infrastructure spending tied to union jobs, it slammed public sector cuts as “a step in the wrong direction.”

Conservatives, meanwhile, attacked the deficit and accused Carney of failing to address “taxes on groceries, work, energy and homebuilding.” Still, one opposition MP, Chris D’Entremont, crossed the floor to join the Liberals, a rare move in Canadian politics.

Despite the criticism, Carney’s approval ratings remain strong. A Nanos poll shows nearly half of Canadians prefer him as prime minister, compared with 27 percent for Conservative leader Pierre Poilievre.