Federal budget aims to boost housing, transit and research amid deficit surge
Canada’s federal government is set to announce a budget today that will commit nearly $50 billion over the next decade to local infrastructure, with a strong emphasis on housing, public transit, and health projects, according to the Globe and Mail.
The sweeping package—dubbed the Build Communities Strong Fund—was confirmed by senior government officials and is set to reshape the country’s economic landscape as Ottawa seeks to counter U.S. trade turbulence and address mounting domestic pressures.
“We have the resources to transform our economy from one of reliance to resilience,” Prime Minister Mark Carney said after a recent trade mission in Asia, underscoring the government’s ambition to “catalyze unprecedented investment in Canada” and reduce dependence on the United States.
The budget’s infrastructure commitment forms the centrepiece of what Finance Minister François-Philippe Champagne called a “generational investment.”
“This is a unique moment in our nation’s history and we need to meet the moment and we’re going to meet it together,” Champagne said, referencing the government’s intent to spur growth and weather economic headwinds.
The Federation of Canadian Municipalities (FCM) previously urged Ottawa to increase infrastructure funding, warning that Canada’s housing and economic targets are at risk without it.
Ottawa’s plan to build 500,000 homes a year and boost the economy relies on strong local infrastructure, FCM said.
Deficit projections, however, have raised eyebrows on Bay Street and beyond. Economists forecast a shortfall between $70 billion and $100 billion for 2025/26, one of the largest in decades.
The government’s minority status in Parliament means the budget’s fate is far from certain, with opposition parties demanding either deeper spending cuts or more generous social programs.
The plan also earmarked up to $1 billion to attract top-tier talent and researchers from the US and elsewhere, while promising billions in new defence spending.
To offset some of the outlays, Ottawa will phase out aging military fleets and scrap the much-touted two billion trees program, redirecting funds to “more effective” climate and clean-growth initiatives.
Industry watchers are keeping a close eye on potential tax changes, with Carney promising a “highly competitive corporate tax system” to encourage investment in manufacturing, clean energy, and R&D.
The budget also pledged to streamline transit funding and boost support for the Business Development Bank, which recently increased provisions for loan losses amid ongoing US tariffs.
Unifor has pressed the federal government to deliver a robust, forward-looking industrial strategy in Budget 2025, warning that Canada’s economic foundation faces unprecedented threats from US trade aggression and global uncertainty.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
