Prime Minister Mark Carney holds up a copy of the federal budget on Parliament Hill on Tuesday.Justin Tang/The Canadian Press
The buildup had sold this budget with big adjectives. Generational. Transformational. The document itself didn’t quite measure up on the same scale.
In April, when Prime Minister Mark Carney unveiled the Liberal Party election platform, he said his plan for the tough days of U.S. President Donald Trump’s trade war would amount to shock and awe. “To succeed in a crisis, you have to act with overwhelming force,” he said.
There was some fiscal force in Tuesday’s budget. But it wasn’t overwhelming.
Finance Minister François-Philippe Champagne kept using words such as “bold” but experts were as likely to remark on its caution.
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There were infrastructure funds, billions for housing, substantial defence spending and measures to develop mining in critical minerals, but not on the budget-blowing scale of bold.
There was a real shift from operational expenses to capital spending – the approach Mr. Carney has repeatedly sold as “spending less to invest more” – but in the grand scheme of big government budgets, the trims to operational spending didn’t amount to a game-changer for public finances.
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And despite all the talk about catalyzing investment – by approving major projects or building a domestic defence industry – there was no groundbreaking set of corporate tax breaks to incentivize the private sector to invest or compete with the measures in U.S. President Donald Trump’s Big Beautiful Bill.
Instead, Mr. Champagne packaged a few new corporate tax breaks with those put forward in the last days of former prime minister Justin Trudeau and labelled them a “productivity super-deduction.” It fell short of a “generational” incentive that would bring a boom of private investment.
Even the infrastructure investments were built with some nip-and-tuck: The new Build Communities Strong Fund for local infrastructure will total $51-billion over 10 years, but about half the money will come from folding in existing infrastructure funds.
When Mr. Carney’s Liberals finally translated all their big, expansive adjectives into black-and-white budget numbers, the results seemed comparatively … modest.
That’s a strange thing to say about a budget with a $78.3-billion deficit. But given all that’s happened in 2025 – the softening economy, the bailouts for tariff-hit sectors, the big commitments to ramp up military spending – it could have been much larger.
What Mr. Champagne delivered isn’t the overwhelming fiscal firepower the Liberals said would be needed to transform the economy. It is more cautious.
There was certainly a culture change from the red Liberal budgets of Mr. Trudeau, a centrist spending budget with a less progressive tone and a touch of conservatism in its politics.
There will be early-retirement packages to cut 16,000 bureaucrats, part of a plan to reduce the civil service by about 10 per cent from its 2024 peak by 2029. That’s a real cut, but not a harsh one that would require automatic No votes from the seven New Democrat MPs.
Foreign-aid budgets will be cut by $2.7-billion over four years as part of an expenditure review that is supposed to save $60-billion over five years.
And beyond the finances, there were political shifts away from Mr. Trudeau’s era.
Admissions of temporary workers and foreign students will be slashed dramatically by a Mark Carney Liberal government that now asserts it is “taking back control” of immigration.
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There was a signal that the proposed greenhouse-gas emission cap on the oil and gas sector will be cancelled if the provinces – notably Alberta – agree to a new industrial carbon levy regime.
But sea change? When Mr. Champagne talked about all the elements of crisis – the end of the old trading relationship with the United States, or the need to protect Canada’s sovereignty in a dog-eat-dog world – his big budget seemed less like generational transformation.
Take a look at its projections for defence spending: By 2030, the annual defence budget will be $14.3-billion higher than it is now. But to get to the NATO commitments Mr. Carney has already made, the government will have to increase the defence budget by another $30-billion a year by 2035. That’s a generational budget shift still to come.
There were constraints Mr. Champagne had to observe. The projected deficit is not unmanageable, but not small. Bigger operational-spending cuts would have risked parliamentary support.
It was a big budget, sure, but it left a lot of key business for transforming Canada’s economy to another day. It wasn’t quite on the scale that Mr. Carney advertised.