Finance Minister François-Philippe Champagne and Prime Minister Mark Carney before delivering the spring economic update on Tuesday in Ottawa.Justin Tang/The Canadian Press
Finance Minister François-Philippe Champagne released a spring economic statement Tuesday that accounts for more than $54-billion in new spending over six years, while still beating Ottawa’s deficit targets thanks to improved growth forecasts.
Much of that new spending includes recent multibillion-dollar announcements such as boosting the GST credit and a short-term break on gas taxes.
The major new funding announced for the first time Tuesday includes about $6-billion over five years for a package of incentives aimed at education and the skilled trades, which the government calls “Team Canada Strong.”
As Prime Minister Mark Carney’s government prioritizes major new infrastructure and energy projects, the package is aimed at ensuring Canada has the skilled labour available to take on the expected boost in construction jobs across the country.
Canadian workers and employers will also get a break on Canada Pension Plan premiums. Starting Jan. 1, 2027, the base contribution rate will drop to 9.5 per cent, from 9.9 per cent.
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The government says this will translate into annual savings of about $133 for an employee earning $70,000 a year, with equivalent savings for employers, who also pay CPP premiums. The measure is worth $3-billion a year, which is covered by the CPP’s own assets and is not a government expense.
The Liberals delivered the update on the one-year anniversary of winning a minority government, a victory that turned on Mr. Carney promising Canadians he had the best plan to keep the country’s economy on solid footing despite the geopolitical earthquakes triggered by the Trump administration.
They now have a majority after a series of floor-crossings and by-election wins, giving them more power to deliver on their agenda but also burdening them with increased expectations.
Polls suggest the Carney government is still riding high in the minds of voters, but faces demands for more action on domestic affordability issues.
This was the first spring update since the government reversed the order in which it releases its key financial reports. The government now tables its budget in the fall instead of the spring, and releases an update in the spring instead of the fall. The last budget was released in November.
The leaders of the NDP, Bloc Québécois and Green Party share their thoughts on the government's spring economic update.
The Canadian Press
The package of measures tied to the update, including preannounced initiatives from recent weeks, are worth about $40-billion over six years, and the GST credit and gas-tax breaks are aimed at addressing those consumer-focused concerns. The update also lists the various other spending announcements Ottawa has made since November, which are worth about $14-billion in total.
The skilled-trades package includes a pledge to recruit, train and hire 80,000 to 100,000 new skilled-trades workers. The measures include a “Build Canada Apprenticeship Service” that offers employers up to $10,000 in wage subsidies for the first year of hiring on apprentice workers. There will also be grants of up to $16,000 an apprentice to help offset the cost of training.
“This means real pathways into skilled trades with paid training and hands-on experience,” Mr. Champagne told the House of Commons. “It means more opportunities for employers to hire and train young workers. It means a $5,000 bonus when you complete your Red Seal certification. And most importantly, it means being part of building a stronger Canada.”
(Red Seal is a professional designation for workers in a set of specific skilled trades.)
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Mr. Champagne’s update shows an estimated deficit of $66.9-billion for the 2025-26 fiscal year, an $11.5-billion improvement over what the government had projected in the Nov. 4 budget. The deficit for the current fiscal year is now projected to be $65.3-billion, roughly unchanged from the figure in the budget. The government could have shown a smaller deficit for the current year. The update says the figure stood at $49.7-billion before adding new spending since the budget.
“Canadians expect us to be good stewards of our economy, and manage our public finances with thoughtful fiscal discipline,” Mr. Champagne told MPs.
The better fiscal picture is the result of stronger-than-expected economic growth in the second half of 2025, as well as windfall gains from the oil price surge resulting from the war in the Middle East.
Higher oil prices mean more corporate and personal income-tax revenue pouring into government coffers. The spring economic update revised the projection for income taxes up by $8.6-billion a year, on average, over the five-year horizon, compared with the fall budget, partly offset by lower goods and services tax revenue.
A lot depends on how long oil prices remain high, which will be determined primarily by U.S.-Iran peace talks.
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The group of Bay Street economists whose forecast underpins the budget projection significantly upgraded their expectation for nominal GDP growth, which does not adjust for inflation, but slightly trimmed their forecast for real GDP growth, which does adjust for inflation.
The economists also cautioned that there are downside risks to the economy, including persistent trade tensions with the United States, which are weighing heavily on business investment.
Rebekah Young, Bank of Nova Scotia’s vice-president of economic policy, said much of the fiscal improvement is due to upgraded revenue forecasts. She said the government is devoting more of those revenue gains to new spending than she had expected.
“I would have anticipated more conservatism in the fiscal developments given the uncertainties we have ahead,” she said. “But there’s a hefty spending package here.”
Conservative Leader Pierre Poilievre sharply criticized the government’s deficit spending in his response to Mr. Champagne’s speech.
“Every time they use the word invest, what they mean is to add more debt. Today we got more costs, more debt, more taxes and more on the national credit card. What we need is not a credit-card economy. We need a paycheque economy,” he said.
The big announcement heading into the update was the creation of a sovereign wealth fund, through which the federal government will invest in major projects. Mr. Carney and Mr. Champagne announced the fund on Monday.
Its initial budget of $25-billion will be funded through public debt, a detail that wasn’t publicly known until Tuesday. It is not listed as an expense that affects the deficit in the update because the government treats that amount as an asset.
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Numerous questions remain about how the fund will work in practice but the update dropped another new detail: In addition to the $25-billion, Ottawa will look for other ways to fund it, such as generating money from existing government assets, including possible privatization efforts.
The update says in another section that the government is looking at changes related to airports.
The document says Ottawa is “assessing opportunities to unlock the full value of airports in support of investments in Canada’s long-term growth, including through alternative models of ownership.”
It also says the government will bring in legislation “to ensure it can obtain the information necessary for a comprehensive evaluation of airport reforms.”
Another area of new spending announced Tuesday is support for the country’s sports system, including $755-million over five years, starting in 2026-27, and $118-million annually.
The funding includes money for Canada to host events but more is going directly to athletes and sporting organizations.
The Carney government has previously committed to speeding up how the Canadian Armed Forces buys what it needs to defend the country at home and abroad.
The update proposes a new step for that process: turning the Defence Investment Agency into a stand-alone entity and giving it a dedicated cabinet minister. The update allocates $103.8-million for this to happen.
Canadian Federation of Independent Business president Dan Kelly said the CPP premium reductions were a welcome surprise and he liked the focus on skills training.
But over all, he said, the update reinforces concern that the government’s economic agenda is more focused on major projects and large corporations.
“It feels like this is a very top-down approach and not one that stimulates entrepreneurship,” he said.