Prime Minister Mark Carney at the Vector Institute in Toronto on Friday. He defended the federal budget earlier that day in a sold-out speech to business leaders.Sammy Kogan/The Canadian Press
Prime Minister Mark Carney defended the federal budget on Friday in front of business leaders who feel underwhelmed by its scope, saying his government chose specific measures that are designed to boost economic growth.
Mr. Carney told a sold-out Bay Street event held by the Canadian Club Toronto that the mix of tax breaks and spending on infrastructure, defence and innovation promised in the budget are strategic choices to turn the tide on lagging investment in Canada.
He pointed to a pledge to massively increase defence spending, a suite of tax breaks on investment called the “productivity super-deduction” and the Major Projects Office launched in August to build new infrastructure. Each is a key plank in bringing about the “substantial restructuring” that Canada’s economy will need, he said.
“We’re using our fiscal space to invest, and it is big,” Mr. Carney said, repeating: “It is big.”
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At the same time, one city block away, Conservative Leader Pierre Poilievre used a campaign-style lunch speech to rip Mr. Carney’s budget for many of those same reasons.
Mr. Poilievre received three standing ovations from an Economic Club of Canada audience with promises to kick-start growth by reducing bureaucracy, including the Major Projects Office, slashing taxes and cutting deficits.
Mr. Carney, who also got a standing ovation at his event, promised the budget would be a road map to transform Canada’s economy and change its fortune for the next generation. The finished product was hailed as a step in the right direction, but left many top business leaders and economists asking if it was enough for the task at hand.
Prime Minister Mark Carney and Conservative Leader Pierre Poilievre offered pitches for the future of Canada's economy just days after the Liberals tabled the federal budget.
The Canadian Press
But Mr. Carney made the case that the tax and spending measures in the budget should make his government’s focus clear: spurring investment that will boost productivity is the top priority.
“Our risk is that this economy doesn’t grow,” he said, then corrected himself. “That was a comma. Our risk is that the economy doesn’t grow fast enough. In other words, we don’t get the productivity up.”
The government has set targets to spur $500-billion of new private-sector investment by 2030, and $1-trillion of total investment over the same span. But it is still unclear whether the budget measures will be enough to reach those lofty goals.
“We’ve had too long looking down, not taking risks. The risk is not to take risks,” Mr. Carney said. “In a situation like this you’ve got to decide where you’re going and we’ve got to put capital to work in the country.”
Mr. Carney was also asked what will set Canada’s plan apart from similar tax and spending measures the U.S. has implemented through the One Big Beautiful Bill Act in the eyes of global investors.
“We have rule of law,” the Prime Minister replied, drawing laughs and applause from his audience.
Mr. Poilievre repeated pledges from the spring election campaign to remove a ban on tankers in Northern British Columbia and repeal Bill C-69, which former Alberta premier Jason Kenney dubbed the “No More Pipelines Bill.”
Canada currently has one liquefied natural gas on the B.C. coast, and one oil export terminal. Mr. Poilievre said a Conservative government would support building up to 16 LNG facilities and additional pipelines to the West, East and North coasts, to reduce Canada’s dependency on U.S. energy exports.
“Mark Carney has been Prime Minster for seven months and we still don’t know if he supports a new oil pipeline,” Mr. Poilievre said.
Mr. Carney, responding to a question about Alberta’s pitch for a new pipeline to the West Coast, replied, “Don’t worry, we’re on it.”
“It’s going to happen. Something’s going to happen,” he said.
During an armchair talk at the Canadian Club Toronto, Prime Minister Mark Carney told the audience that a pipeline is 'going to happen.'
The Canadian Press
Mr. Poilievre also faulted Mr. Carney for failing to reach a trade deal with the United States and said with a stronger economy and greater affordability, Canada “would be able to stare down tariffs from any nation.”
Mr. Carney said talks to renegotiate the United States-Mexico-Canada Agreement will be “very important,” and that Canada has “some cards.”
As for the stalled trade negotiations with the Americans, he said: “They’re taking a pause. I’m ready.”