The federal budget adds $141 billion in new spending, Ottawa to reduce the size of the bureaucracy

November 4,2025

RED FM News Desk

Prime Minister Mark Carney’s first federal budget outlines a sweeping plan for infrastructure and industrial investments designed to strengthen Canada’s economy and increase national self-reliance. The “Canada Strong” budget aims to drive long-term growth through major capital investments while cutting everyday government expenses — though it projects a much larger deficit than forecast a year earlier. 

Framed as building an economy “by Canadians, for Canadians,” the budget focuses on boosting productivity, supporting key industries, and creating stability amid global uncertainty caused by U.S. trade tensions and a sluggish economy. Finance Minister François-Philippe Champagne said the plan positions Canada to capitalize on its strengths in areas like critical minerals and artificial intelligence. 

Instead of prioritizing deficit reduction, the government is opting for what it calls “generational investments” in infrastructure, housing, defence, and competitiveness. The 406-page budget commits to $280 billion in capital investments over five years, including $141 billion in new spending, partly offset by $51.2 billion in savings—a net new spend of about $89.7 billion. 

The federal deficit is expected to reach $78.3 billion in 2025–26, up from the $42.2 billion projected last year, before gradually declining to $56.6 billion by 2029–30. The plan also includes $32.5 billion in new capital spending and anticipates a $1.7 billion operating surplus by 2028–29. 

To fund savings, Ottawa plans to eliminate 28,000 public service positions, part of a broader effort to find $60 billion in cost reductions over five years. 

On defence, Canada will increase spending to 2% of GDP this year, with plans to reach 5% by 2035. 

In immigration, the government’s new “Immigration Levels Plan” will stabilize permanent resident admissions at 380,000 annually for the next three years, while reducing temporary resident entries and prioritizing more economic migrants—a shift from previous targets of 395,000 in 2025 and 365,000 in 2027. 

Champagne described the budget as an “investment budget” meant to make Canada more resilient and prosperous in the face of global economic challenges.