Dubbed a “generational investment” that will help define the next century, Prime Minister Mark Carney’s first federal Budget, tabled on November 4, includes broadly anticipated themes. The 400+ page document proposes trimming day-to-day operational government spending, increasing investments in capital projects and the military, and introducing measures to make Canadian businesses more competitive. The goals are clear: “More than 75% of our actions this year are to respond to significant global economic shifts. 42% of Budget 2025 is to strengthen Canadian sovereignty and 36% is to bring down costs for Canadians.” This is clearly a Trump survival Budget, or as the government puts it, “This is the moment to move from reliance to resilience.” Beyond its overarching themes, the Budget includes crucial projects, small and large, that are of special interest to The Pearson Centre and that have not made it into most early analyses.
The Pearson Centre recently launched our Arctic Dialogue Series, exploring the challenges and opportunities facing Canada’s Arctic region and its people today, highlighting the policies, partnerships, and investments necessary to ensure a Canadian Arctic that is strong, sustainable, and free into the future. Budget 2025 has a significant focus on the Arctic, including an Arctic Economic and Security Corridor, an Arctic Infrastructure Fund, a focus on access to health care in the Arctic and North, and a focus on the Arctic in the investments in the Canadian Armed Forces.
At a recent Pearson Centre event, Cannabis at the Crossroads, the Cannabis Council noted that it has been advocating for one national excise Stamp for legal cannabis. While the Fall Economic Statement 2024 proposed such a move, with details to follow in the next Budget, this measure seems to be missing from Budget 2025. This fragmented system adds $100 million in annual costs to an industry that is larger than Canada’s dairy industry. It is also concerning that changes were made to reimbursements for medical cannabis based on a lower market price, while not acknowledging the excise tax is being charged on an inflated market price.
Budget 2025 also proposes legislation to accelerate the development of Canada’s first high-speed railway, from Toronto to Quebec City. Reaching up to 300 km/hour, these trains would cut travel times in half, connect almost half of Canada’s population, create 51,000 jobs during construction, and generate some 25 million tonnes in emission savings. The Budget also states that Alto, the Crown corporation, would be subject to the government’s “Buy Canadian Policy.”
Budget 2025 also includes a range of key health-related proposals. It proposes $80 million in funding from 2026-2030 for Phase 2 of the Terry Fox Research Institute’s Marathon of Hope Cancer Centres Network. This investment will build on the original $150 million federal investment in 2019 to create the Marathon of Hope Cancer Centres; a unique network representing a powerful collaborative platform that aims to close the gap between research in the lab and patient care in the clinic. This investment is the kind of nation-building project that protects our sovereignty while saving lives and advancing scientific research.
An interesting addition to the Budget is a proposed legislative amendment to the Employment Insurance Act to allow parents who are receiving Employment Insurance (EI) to access up to eight additional weeks of parental benefits after a child’s death. This mirrors the intent of a Private Members Bill C-222 introduced by Hon Terry Beech, and championed by Hon Karina Gould. However, it will be interesting when the Budget Implementation Act is introduced to see how closely it mirrors C-222. Important considerations in the Private Members Bill were the fact that a parent did not have to re-apply during the grieving process, and that the benefits continued for the remainder of the parental/maternity leave.
Children and youth are the focus of several important measures, including the government’s proposal to make the National School Food Program permanent. The program helps take pressure off of families and directly supports the success of children across Canada, improving their health, education, and well-being. A youth-focused initiative is the creation of a Youth Climate Corps to provide paid skills training for young Canadians, enabling them to quickly respond to climate emergencies, support recovery, and strengthen resilience in communities across the country. Such a Corps would also help reduce youth unemployment.
The Pearson Centre has shared our concerns about the impact on women during an economic downturn, and we were heartened to see investments in the Department of Women and Gender Equality. The Gender Results Framework (GRF) aims to “advance gender equality and enables the government to focus on what drives progress toward gender equality.” In Budget 2025, the government proposes permanent funding for the Department for Women and Gender Equality which helps advance the GRF goal on Gender-Based Violence and Access to Justice. This funding will stabilize and renew work to improve women’s and girls’ economic security and leadership, strengthen federal action to address gender-based violence for Indigenous and other underserved populations, and support 2SLGBTQI+ communities).
The government is also expressing an interest in exploring Canada’s participation in the wildly popular music show, Eurovision, as part of its commitment to protect CBC/Radio-Canada. Budget 2025 proposes providing $150 million in 2025-26 for CBC/Radio-Canada to “strengthen its mandate to serve the public and to better reflect the needs of Canadians.”
It is important to note Budget 2025’s steep cuts to the International Assistance Envelope, which is the primary source of Canada’s foreign aid funding. The government describes these as “reductions in development funding to global health programming, where Canada’s contribution has grown disproportionately relative to other similar economies.” . It is concerning that Canada chooses to turn its back on people in extreme need across the world at this moment in history, as the U.S. – and the G7 – already has chosen to slash its investments in nutrition, education, and other life-saving initiatives worldwide. This change will slash $2.7 billion over the next four years from our international assistance.
Budget 2025 is ambitious, framing itself as a “generational investment” that seeks to redefine Canada’s economic and social foundations for the next century. Beyond the headline commitments, the Budget’s more targeted measures in areas like rail infrastructure, health research, gender equality, youth development, and public broadcasting, reflect an attempt to align national priorities with all areas of Canadian life. At the same time, the cuts to areas like international assistance stand as a troubling counterpoint to Canada’s long-standing global leadership on aid and development, and emphasis on “streamlining” processes without a lot of specificity about how that will be done. How these competing priorities play out will determine whether this Budget truly fulfills its promise to shape a stronger, more equitable Canada in an increasingly uncertain world.
The full Budget 2025 can be found here: Budget 2025 – Canada Strong
Pam Damoff, CEO, Pearson Centre
Sofia Robinson, Research Assistant, Pearson Centre