"A protracted trade war with the United States and a weakening domestic economy has forced Mark Carney to run a deficit tens of billions larger than initially forecast in his first-ever federal budget. The spending plan, titled Canada Strong envisions significant new defence spending, a reduction of the country's civil service and generational investments that would reshape the nature of the country's economy."
"Prior to unveiling his economic vision for the country, Carney had repeatedly stressed the need for Canada to seek out new markets as trade with the US stagnates, large corporations flee and tariffs batter key industries. As part of its massive spending plan, the Canadian government is increasing defence spending by C$8bn over five years to combat an increasingly dangerous and divided world."
"The government envision changes to retirement rules not firings to achieve that goal. But the costs associated with the capital spending needed to avoid a recession are laid out in the document. In last December's fiscal update, the federal deficit was projected to be $C42.2bn in 2025-26. But the Liberal plan will run a deficit of C$78.3bn in 2025-26. The government says it will aim to reduce the federal deficit to C$56.6bn by 2029-30."
Canada's federal budget projects much larger deficits than previously forecast, driven by a protracted trade war with the United States and a weakening domestic economy. The budget increases defence spending by C$8 billion over five years and pledges generational investments to reshape the economy. The plan envisions reducing the federal workforce by 2028-29 through changes to retirement rules rather than layoffs. Capital spending aimed at avoiding recession is detailed, raising projected deficits to C$78.3bn for 2025-26 versus a prior projection of C$42.2bn, with a target to reduce the deficit to C$56.6bn by 2029-30.
Read at www.theguardian.com
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