Prime Minister Mark Carney’s first federal budget sets out an ambitious goal to mobilize one trillion dollars in total investment over the next five years, in what his government calls a plan to restore Canada’s competitiveness and lift its stagnant productivity.
Released under the title Budget 2025: Canada Strong, the document signals a shift toward a more interventionist economic policy, blending targeted public investment with private-sector incentives to drive long-term growth.
The government’s strategy arrives at a moment of mounting uncertainty. Global trade disruptions, geopolitical tensions and a decade of flat business investment have left Canada lagging behind most of its G7 peers.
Productivity has grown by an average of only 0.3 per cent annually over the past decade, weighing on wages and economic output.
“We need to build Canada strong — investing in our people, our ideas, and our industries,” Mr. Carney said during his presentation of the budget in Ottawa.
At the core of the plan is a commitment to use public funding to unlock private and institutional capital.
The government projects that roughly 280 billion dollars in federal spending and incentives will generate one trillion dollars in combined investment by 2030.
Finance Minister François-Philippe Champagne described the budget as a “pro-growth, pro-investment agenda” designed to give businesses the confidence to expand and modernize.
Among the measures outlined is a new Productivity Super-Deduction, allowing companies to immediately expense investments in manufacturing and processing equipment, clean energy technologies, and zero-emission facilities.
The change, which also applies to new buildings and research-related capital, is expected to lower the marginal effective tax rate on new investments to 13.2 per cent, which the government says would make Canada the most tax-competitive country for new business investment in the G7.
The budget also includes reforms to the long-standing Scientific Research and Experimental Development program.
Ottawa plans to increase expenditure limits, restore eligibility for capital expenses and extend the enhanced credit to public corporations in an effort to spur innovation across industries.
To accelerate large-scale projects, the government will create a Major Projects Office, serving as a single point of contact for industrial, energy and transportation initiatives.
Five projects worth more than 60 billion dollars have already been referred to the office, with another round expected soon. In total, Ottawa anticipates at least 150 billion dollars in capital investment from these efforts.
In addition, the budget launches an International Talent Attraction Strategy with a 1.7-billion-dollar allocation to recruit more than a thousand leading researchers and academic professionals.
The initiative aims to make Canada more competitive in emerging sectors by linking immigration, education and innovation policy.
Several measures are also directed at enhancing competition and consumer choice.
The government promises to open the telecommunications market further, release new wireless spectrum, and modernize the payments system through real-time infrastructure.
It also intends to limit the use of non-compete clauses in employment contracts to encourage a more dynamic labour market.
The overall plan sets aside 315 billion dollars for infrastructure, 270 billion for industrial development, 210 billion for research and development, 130 billion for housing, 95 billion in tax incentives, and 60 billion through accelerated depreciation and expensing.
Officials argue that this composition of spending will boost productivity, attract investment and eventually strengthen public finances.
Economists, however, remain cautious. While the proposed incentives may help stimulate private investment, analysts point to possible delays in project delivery and question whether Ottawa’s broader regulatory and fiscal environment can support sustained growth.
Rising borrowing costs and global instability could further complicate the outlook.
For Mr. Carney’s government, the success of Budget 2025 will depend on execution.
If private capital responds and productivity improves, the plan could mark a turning point for Canada’s economy.
If not, it risks adding to public debt without resolving the country’s long-standing growth problem.
For now, the government is betting that large-scale investment, tax relief and global talent recruitment will be enough to restore momentum in a world that is, as the Prime Minister put it, increasingly dangerous and divided.
