Briefing binder created for the Minister of Finance and National Revenue on the occasion of his appearance at the Standing Committee on Finance on February 3, 2026 on Bill C-19, An Act to amend the Income Tax Act

Economic Narrative

Key Messages

• The Canadian economy remains resilient. Despite some volatility, overall economic activity has evolved largely as expected.
• Real GDP expanded in the second half of 2025 after nearly stalling in the first half of the year, the labour market has stabilized, and business and consumer confidence have improved:
  • Total employment is up by 159,000 since January 2025, with 104,000 more full-time jobs and 155,000 more private sector jobs.
  • The unemployment rate is 6.8%, below Budget 2025 expectations, and more people are returning to the labour force.
  • Nominal average hourly wages rose by 3.4% in December, above the 2010-2019 average of 2.3%.
  • Inflation has been close to 2 per cent for two full years, supporting household purchasing power.
• The economy is still expected to remain in a soft patch in the coming months. The trade conflict has weakened demand for exports and heightened uncertainty has led some businesses to postpone expansion plans. This is hampering the economy's ability to grow.
• But strong foundations are in place for growth to pick-up.
• The IMF expects Canada to have the second-strongest economy this year among G7 countries, after the U.S.
• While U.S. tariffs remain a challenge, 85 per cent of Canada's trade with the U.S. is tariff free and Canada enjoys the lowest effective U.S. tariff rate globally at 5.4 per cent.
• Budget 2025 is making significant, strategic capital investments to raise long-term growth and build the strongest economy in the G7.

Details & Supplementary Information

• After a weak first half of 2025, economic activity resumed in the second half of the year as global conditions stabilized and domestic demand held up better than expected. While growth remains subdued, recent data suggest the slowdown has been less pronounced than anticipated at the time of Budget 2025.
• The economic backdrop has improved modestly since Budget 2025 was tabled. Job creation has totaled 159,000 since January of last year, more than 100,000 of which has been in full-time work. This has helped bring the unemployment rate down to 6.8% as of December, below the expectations of private sector economists at the time of Budget 2025.
• Business sentiment is also improving. Firms are adapting to the new trade environment and partly mitigated the impact of tariffs by diversifying export markets and building inventories. Furthermore, 85% of Canada's trade with the U.S. remains tariff-free, and the average tariff rate on Canadian goods is about 5.4%—the lowest among U.S. trading partners.
• Inflation remains well contained. Headline inflation edged up slightly late in 2025 due to temporary factors, while underlying inflation pressures continue to ease overall. This environment has supported real household purchasing power and allowed interest rates to move lower. *Redacted*.
• Looking ahead, the economy is expected to regain momentum gradually throughout 2026. *Redacted*. Risks to Canada's economic outlook remain closely tied to the duration of U.S. tariffs and the uncertainty they create for capital-intensive, globally dependent industries.
• Budget 2025 is making generational investments in housing, infrastructure, defence, productivity and competitiveness. These investments will drive productivity, boost the capacity of Canada's economy and secure a prosperous future for Canadians.

Inflation Narrative

Key Messages

• Inflation remains close to 2%. Headline inflation was 2.4% in December 2025 and has remained within the Bank of Canada's 1-3 % target range for the past 24 consecutive months.
• Inflation is expected to remain near 2%. Both the Bank of Canada and private-sector forecasters anticipate inflation staying close to target over the foreseeable future.
• Canadians remain concerned about the cost of living – including high food prices. In a market economy like ours, there will always be some prices rising faster than 2%, and some more slowly. For example, grocery prices were up 5% in December, while gasoline was down almost 14%.
• Elevated food inflation reflects the tail end of input cost pressures earlier this year, and this is not unique to Canada. Many advanced economies have experienced elevated food inflation, and Canada sat roughly mid-range among peer countries in 2025.
• Lower overall inflation has allowed the Bank of Canada to reduce interest rates, which has significantly reduced mortgage costs for Canadians.
• This government recognizes that many Canadians are feeling the pressures of everyday expenses and need relief right now. Building on past actions to provide relief, like the elimination of the consumer carbon price, the government has proposed the new Canada Groceries and Essentials Benefit.
• At the same time, the government continues to plan to create better-paying jobs, increasing productivity and building the strongest economy in the G7, which will support stronger income growth.

Details & Supplementary Information

• Inflation reached a height of 8.1% in June 2022, driven by pandemic-related disruptions, supply chain congestion, and surging commodity prices following Russia's illegal full-scale invasion of Ukraine. Since then, inflation has come down and has been close to 2% for two years.
• In December, inflation picked up to 2.4% from 2.2% in November, reflecting the base-year effects from last winter's temporary GST/HST holiday. This particularly affected services excluding shelter. For example, restaurant prices increased by 8.5% year-over-year. Excluding indirect taxes, inflation eased from 2.8% in November to 2.5% in December.
• On the flip side, higher food prices are still being boosted by earlier input cost pressures and this is mitigating the broader moderation in inflation. The year over year pace for grocery inflation picked up to 5.0%, well above its historical average of 2.0%.
  • Low crop yield, severe weather, transportation costs and other input costs have put upward pressures on food prices.
  • These cost pressures are being experienced around the world, and Canada sits mid-range among peer countries for 2025.
  • This is particularly evidenced in inflation for products that are facing supply issues such as beef, poultry, coffee, and confectionary products.
  • Growth in input costs has moved lower recently, so food price inflation should ease in the months ahead.
• There are many reasons inflation is expected to remain close to 2%:
  • Measures of core inflation continue to ease. The average of measures of core inflation eased to 2.6% in December. The three-month annualized rate dropped to below 2%, showing a significant easing in momentum and pointing to further easing in year over year measures ahead.
  • Input cost growth is easing and unit labour costs have been steady.
  • Rent CPI inflation remains high at 4.9% in December, but slowing population growth and increased construction should contribute to easing pressure. Asking rents for new leases are down $300–400 in Toronto and Vancouver over last two years

Productivity Narrative

Key Messages

• Productivity growth is the driving force behind sustained increases in living standards and economic competitiveness.
• When productivity grows, everyone benefits. The wages and incomes of hard-working Canadians rise, businesses have the conditions to grow and to create more jobs, and Canada stays competitive in global markets.
• A strong economy driven by productivity growth also provides the revenues needed to fund public services that Canadians count on.
• Canada's productivity growth lags that of other G7 economies. Over the past decade, Canada's productivity grew by only 0.3 per cent annually.
• The economic impact of this gap is significant—if Canada's productivity growth had matched the U.S. from 2017 to 2023, the median income of a family with one child would be nearly $11,000 higher.
• Perennially weak productivity growth is closely tied to longstanding weakness in business investment.
  • For decades, Canadian firms have invested less per worker than their American counterparts.
  • Across many sectors, Canada's economy has seen weak investment in machinery and equipment, research and development, and intangible assets like intellectual property, data, and software.
• The most immediate way to jumpstart productivity growth is to address structural impediments and increase investment—in machinery, equipment, innovation, and infrastructure that allow workers to build faster and at a more competitive cost.
• Budget 2025 does exactly this with significant investments in infrastructure and emerging technologies, lower taxes on new investment and research and development—including through a Productivity Super-Deduction—and regulatory reforms to cut red tape, accelerate major projects, and increase competition.

Details & Supplementary Information

• Canada's productivity growth has been persistently weak and has generally lagged most G7 peers (Chart 1).
• From 2014 to 2023, it slowed to well below its pace over the 1994–2014 period.
• This has contributed to a substantial productivity level gap between Canada and other G7 economies (Chart 2).
• The economic impact of this gap is significant—if Canada's productivity growth had matched the U.S. from 2017 to 2023, the median income of a family with one child would be nearly $11,000 higher.

• Low business investment has been an important reason for our low productivity growth. Investment intensity in machinery and equipment and intangible assets, key drivers of productivity, have been lower than in the U.S for decades. As well, this investment gap has been pervasive across sectors (Chart 3).
• Since 2015, Canada's relatively poor investment performance has worsened. Business investment in Canada has been flat over the past decade, while business investment in the U.S. has risen sharply (Chart 4).
  • Much of this gap has been driven by a retrenchment in capital spending by Canada's energy sector following the sharp decline in global oil prices in 2015, and the contrasting increase in U.S. technology investment in recent years.

• Businesses often perceive the risks and costs of investments in high-risk and innovative assets as outweighing the rewards, a mindset reinforced by structural impediments such as the regulatory environment, limited competition, and scale constraints.
• The most immediate way to jumpstart productivity growth is to address structural impediments and increase investment—in machinery, equipment, innovation, and infrastructure that allow workers to build faster and at a more competitive cost.
• With a new comprehensive industrial strategy, the Budget 2025 is investing in trade diversification, housing and infrastructure, and advanced technology that can unlock Canada's economic potential. At the same time, it is providing tax incentives for new investment by the private sector. The government is also streamlining regulations and project approval process while promoting competition in key network sectors (i.e., telecom, financial service) to remove impediments to productivity growth.

The following provides further detail about Canada's relative investment performance in productive assets.

Fiscal Narrative

Key Messages

• At this pivotal moment, Canada faces a changing global order from a position of strength. With Budget 2025, the government is making generational investments that will protect and transform our industries, strengthen our economy, and empower Canadians.
• To remain fiscally sustainable, these investments are anchored by a new approach to fiscal discipline and strategic investment. One that:
  • Balances day-to-day operating spending with revenues by 2028–29, shifting spending toward investments that grow the economy; and
  • Maintains a declining deficit-to-GDP ratio to ensure disciplined fiscal management for future generations.
• As announced in Budget 2025, the Comprehensive Expenditure Review will rein in government spending—saving $13 billion annually by 2028-29, for a total with other savings and revenues of $60 billion over five years.
• With these efforts, Budget 2025 makes the investments needed to grow our economy, while meeting both fiscal anchors, with a deficit of $78.3 billion, or 2.5 per cent of GDP in 2025-26, falling to $56.6 billion, or 1.5 per cent of GDP by 2029-30.
• Budget 2025 also projects the federal debt-to-GDP ratio to remain relatively stable across the horizon, rising from 42.4 per cent in 2025-26 to 43.1 per cent in 2029-30.
• As detailed in the latest Fiscal Monitor, the budgetary deficit for the April to November period of the 2025-26 fiscal year was $26.4 billion, compared to a deficit of $22.7 billion for the same period of 2024-25.

If pressed, contingent liability

• A contingent liability is recorded when the probability of a future payment is considered likely and the amount can be reasonably estimated.
• As of 2024-25, the total contingent liabilities recorded in the Public Accounts was $55 billion. The majority of this is associated with active alternative dispute resolution processes and pending or potential litigation.

Details & Supplementary Information

Table A1.7 outlines the summary of statement of transactions from Budget 2025.

Fiscal anchors in Budget 2025:

Balance operating spending with revenues by 2028-29, shifting the composition of spending from day-to-day operations to investments that support capital formation and productivity.

Maintain a declining deficit-to-GDP ratio, reflecting disciplined fiscal management that safeguards economic stability for future generations.

Source: Fiscal anchors, Page 59, Economic and Fiscal Overview, Budget 2025.

The following graph outlines the stock of total contingent liabilities since 2011-12.

Each year previously recognized contingent liabilities may be reduced or extinguished through payments, while new obligations or revaluations are recorded to reflect updated estimates. The resulting balance represents the stock of outstanding contingent liabilities.

Changes in provisions due to revisions in estimates or the addition of new obligations are reflected in direct program expenses in the budget and impact the budgetary balance in the year the liabilities are recorded. In recent years, this expense has averaged over $10 billion per year.

Debt Management Strategy 2026-27

Key Messages

• The 2026-27 domestic borrowing program is projected to be $589 billion, $20 billion lower than in 2025-26 ($609 billion).
  • Despite an increase of financial requirements, the year-over-year reduction of the borrowing program is due to fewer bond maturities.
  • The maturity of COVID-era 5-year bonds led to an elevated maturity profile in 2025-26.
• The Budget proposes to increase the maximum amount of borrowing under Section 4 of the Borrowing Authority Act (BAA) from $2,126 billion to $2,541 billion to ensure uninterrupted borrowing capacity to meet government's priorities over the next three fiscal years.
• Public debt charges for 2025-2026 were 1.8% of GDP, far below the long-term average of 3.2% over the past 40 years.
• Canada has the lowest net debt-to GDP ratio in the G7 (12.5% for 2025), according to the IMF.
• Canada is rated AAA by S&P, Moody's and DBRS, and AA+ by Fitch. 

Details & Supplementary Information

Q: Can you provide a breakdown of the domestic borrowing program?

Table A4.2 of Budget 2025

Q: What is the Government's average term to maturity? 

The Average Term to Maturity (ATM) of the government's market debt at the end of 2024-25 was 6.47 years. ATM is expected to be 6.80 years by the end of 2025-26 and 6.75 years by the end of 2026-27.

This is in the range of 6-7 years seen in recent years and represents a prudent balance of cost and risk. It is also within the range of Canada's peers.

Q: What is the amount of outstanding debt stock under the BAA?

Public Accounts 2025 reflect that the debt stock under the BAA was estimated at $1,787 billion at the end of March 31, 2025. The debt stock is projected to reach $1,928 billion by the end 2025-26. The maximum debt stock under the BAA includes Government of Canada market debt securities, eligible borrowings from agent Crown corporations, and Canada Mortgage Bonds (CMBs) not held by the Government of Canada. 

Q: How did you arrive at the proposed maximum BAA amounts? 

The proposed $2,541 billion includes:

1. the expected debt stock of $1,787 billion as of March 31, 2025 (per Public Accounts),
2. the government's anticipated incremental borrowing needs until March 31, 2029, of $580 billion (per Budget Annex 1 financial sources and uses)
3. the expected net increase in outstanding CMBs of $47 billion over the same period,
4. $12.5 billion of anticipated incremental borrowing by agent Crown corporations (per corporate plans) over the same period, and
5. a contingency margin, as has been the practice in the three previous maximum borrowing amounts.

Q: When will the government issue a Transition Bond? 

The government remains committed to regular green bond issuances and will explore the development of a sustainable bond framework that would allow the issuance of both green and transition bonds. 

Work is underway to develop Canada's sustainable investment guidelines (also known as a taxonomy) by the end of 2026. These guidelines will credibly identifying "green" and "transition" investments and are required to support the development of transition bonds. 

International Trade

Key Messages

• The government's primary focus is on diversifying our trade partnerships and attracting investment into Canada. Canada has what the world wants, including strong fundamentals, energy, critical minerals, sophisticated investors, and the most educated population in the world.
• Canada has secured a dozen international trade and security partnerships on four continents in six months. We are also the only G7 country with a free trade agreement with all the other G7 countries.
• The government remains prepared to engage with the U.S. to resolve outstanding tariffs, as well as on the upcoming CUSMA review.

Trade Relations with the United States

• The U.S. maintains harmful and unjustified tariffs on Canadian exports in strategic sectors – 50 per cent on steel, aluminum, and copper products, 25 per cent on autos and trucks, and 10 per cent on lumber. Tariffs also apply on upholstered furniture and kitchen cabinets (25 per cent) and buses (10 per cent). 
• The government continues to maintain tariffs on imports on $51.4 billion of annual steel, aluminum, and autos imports from the U.S. – sectors directly affected by U.S. actions – to defend our interests.
  • With respect to the Public Accounts of Canada 2025, of the $6.3 billion in total customs import duties for FY2024–25, $388 million (net amount) are attributed to the counter-tariffs on imports from the U.S.
  • This figure is relatively low since some of the countermeasures were only implemented as of March 2025, near the end of the fiscal year.
  • Budget 2025 projects net revenues from the counter-tariffs to amount to approximately $4.4 billion for the 2024-25 to 2026-27 fiscal years. 
• While we work to achieve reductions in U.S. tariffs, the government is focused on improving Canada's resilience, such as strengthening our steel sector, increasing global competitiveness, and further diversifying our trade.

Trade Relations with China

• China is the world's second-largest economy and Canada's second-biggest trading partner, with $130.9 billion in two-way trade in 2024.
• To diversify our trade partnerships and increase Canada's economic resilience, the government is focused on pursuing a pragmatic, results-driven relationship with China.
• To that end, Canada reached an agreement-in-principle to remove tariffs and to boost exports to China by 50 per cent by 2030.
• Together, these results will help unlock nearly $3 billion in export orders for Canadian workers and businesses. Both countries will also keep working to resolve remaining trade challenges in the months ahead.
• The agreement-in-principle includes commitments on electric vehicles (EVs), agriculture, seafood, and steel and aluminium:
  • For EVs, Canada committed to eliminate the 100 per cent surtax for 49,000 units. A portion of the quota volumes (reaching 50 per cent by 2030) will be reserved for imports of low-priced EVs of $35,000 or less, to ensure the availability of affordable EVs.
    • This represents less than 3 per cent of Canada's new vehicle market and restores import volumes to 2023-24 levels before the 100 per cent surtax took effect in October 2024.
• For the surtaxes on Chinese steel and aluminum, Canada committed to extend the remission, which expired at the end of 2025, for the 2026 calendar year and to add nine products to that remission, in addition to certain steel derivative goods (i.e., metal furniture).
• In return, Canada expects China to reduce the combined tariff on canola seed from 84.8 per cent to approximately 15 per cent and to suspend its anti-discrimination tariffs on canola meal of 100 per cent, and on lobster, crab and peas at 25 per cent from March 1 to December 31, 2026.

Details & Supplementary Information

Current U.S. tariffs imposed on Canadian goods

• In aggregate, the current U.S. effective tariff rate against all Canadian exports is estimated to be 5.4 per cent, with 85 per cent of Canadian exports entering the U.S. tariff-free.
• U.S. International Emergency Economic Powers Act (IEEPA) tariffs: As of August 1, 2025, U.S. tariffs of 35 per cent on all Canadian non-CUSMA originating goods, and 10 per cent on energy resources (including critical minerals) and potash imports. Currently, 97.5 per cent of Canadian exports covered by the IEEPA tariffs are CUSMA-compliant and enter the U.S. duty-free. The U.S. Supreme Court is expected to rule on the legality of these tariffs in early 2026.
• U.S. Section 232 Tariffs: The U.S. currently maintains Section 232 "national security" tariffs on $150.5 billion of Canadian exports in specific sectors. These include: steel, aluminum, copper, non-CUSMA compliant autos and trucks and CUSMA-compliant auto and truck parts, lumber and wood products (i.e., upholstered furniture, kitchen cabinets and vanities) and buses. The U.S. also maintains tariffs on certain advanced computing chips and derivatives, as well non-CUSMA compliant pharmaceutical products, but the impacts of these are more limited for Canada
• Potential future Section 232 sectoral tariffs: The Section 232 investigation on processed critical minerals and their derivative products (PCMDPs) is completed, with the President directing negotiations on a trade agreement with the threat of tariffs if negotiations to adjust the imports of PCMDPs into the U.S. are unsuccessful. Additional Section 232 investigations are ongoing for the following sectors, which could result in additional tariffs: (1) commercial aircraft and jet engines; (2) polysilicon; (3) unmanned aircraft systems; (4) wind turbines and their components; (5) robotics and industrial machinery; and (6) medical products.

Canadian counter-tariffs on the U.S. and tariff-based mitigation measures

• Canada initially imposed counter-tariffs on the U.S. affecting approximately $95 billion of annual imports from the U.S. Since September 1, 2025, the government has maintained counter-tariffs on $51.4 billion of annual steel, aluminum, and autos imports from the U.S. (sectors directly affected by U.S. actions).
• To minimize the negative effects of the counter-tariffs, the government established a remission framework to provide exceptional tariff relief on a case-by-case basis. More broadly, the government has extended temporary tariff relief (remission), until June 30, 2026, for all goods imported from the U.S. for the manufacturing of motor vehicles, aerospace goods, and their parts, as well as those that support public health, public safety, and national security. Tariff remission is also provided for goods used in manufacturing, processing, food and beverage packaging, or agricultural production to provide time for Canadian businesses to adjust their supply chains, until January 31, 2026 (for steel imports) and June 30, 2026 (for aluminum imports).
• For autos, the government provided a performance-based remission framework that allows automakers to import a certain number of U.S.-assembled, CUSMA-compliant vehicles into Canada, free of the counter-tariffs. This remission is contingent on the automakers continuing to produce vehicles in Canada and on completing planned investments. In this context, on October 23, 2025, the government reduced General Motors' annual remission quota by 24.2 per cent, and Stellantis' annual remission quota by 50 per cent, in response respectively to GM's decision to reduce their production in Oshawa and in Ingersoll facilities, and Stellantis' decision to cancel its production plans for the Brampton assembly plant. The remission framework will remain in force until April 2026. 

Revenues from U.S. counter-tariffs

• As of October 17, 2025, the government assessed more than $3.7 billion revenue, net of remissions and other relief programs, from Canada's counter-tariffs on U.S. goods, as detailed in Chart A1.1 of Budget 2025.

• For the 2024-25 to 2026-27 fiscal years, combined net revenues from the counter-tariffs are projected in Budget 2025 to amount to approximately $4.4 billion, as detailed in the table below.

CUSMA review

• The U.S. has indicated its intent to initiate the review of CUSMA in January 2026. Minister LeBlanc is expected to speak to the United States Trade Representative (USTR) in January for further clarity on process and next steps.
• The USTR reported to Congress on December 17, 2025, that it intends to raise the following issues with Canada: expanded dairy market access, reforms to online streaming and news acts affecting U.S. digital services, ending provincial boycotts of U.S. alcohol, and addressing provincial procurement and customs issues. The USTR did not foreclose the possibility of U.S. withdrawal from the agreement and/or reverting to separate agreements with Canada and Mexico.

Canada-China Trade Relations

At the invitation of President Xi Jinping, Prime Minister Mark Carney made his official visit to Beijing, China (January 14-17), where leaders secured a preliminary agreement-in-principle to address trade issues:

Revenues from China Surtax Order (2024)

• The Fall Economic Statement 2024 projected revenues from the China Surtax Order (2024) to amount to approximately $1.1 billion over six years (from 2024-25 to 2029-30). Budget 2025 projected the China Surtax Remission Order (2024) would lead to foregone revenues of $183 million over two years (from 2024-25 to 2025-26). The expected increase in foregone revenue as a result of the China outcomes will be confirmed once the remission extension is implemented by Order in Council.

Trade Measures on Steel Products

The government implemented trade measures to mitigate the acute risk of diversion arising from U.S. actions, as well as to facilitate the steel industry's long-term adjustment and to promote domestic opportunities for Canadian producers.

• Steel Tariff Rate Quotas (TRQs): Initially imposed in June 2025, this measure currently limit imports from non-CUSMA FTA and non-FTA partners to 75 per cent and 20 per cent, respectively, of 2024 import levels above which a 50 per cent surtax applies.
• Steel Goods and Aluminum Goods Surtax Order: Effective July 30, 2025, Canada imposed a 25 per cent surtax on steel goods containing steel melted and poured in China, and aluminum goods containing aluminum smelted and cast in China.
• Steel Derivative Goods Surtax Order: Effective December 26, 2025, Canada imposed a 25 per cent surtax on imports of steel derivative products from all countries.

Remission remains available for these surtax measures.

Budget 2025: Broad Key Messages

Key Messages

• Budget 2025 is our plan to respond to a pivotal moment for Canada and the world. The rules-based global order that drove Canada's prosperity for decades has been ruptured, putting Canada's prosperity at risk.
• To meet the challenges of our time and seize new opportunities, Canada must make generational investments to build strength at home—by protecting and transforming our industries, reducing reliance on other economies, and empowering Canadians.
• Through Budget 2025, the government is taking a proactive approach that drives investment and strengthens our economy while addressing key public policy priorities—improving affordability for Canadians and protecting our industries, workers, and sovereignty.
• Key elements include:
  • Improving affordability by eliminating the consumer carbon tax, introducing a middle-class tax cut, and making the National School Food Program permanent
  • Building affordable housing at scale through Build Canada Homes
  • Accelerating major projects to attract more capital
  • Increasing investment in trade-enabling and other infrastructure
  • Investing in defence industry to boost our industrial capabilities
  • A Buy Canadian policy to boost domestic production
• Budget 2025 introduces a new approach for matching responsible fiscal management with the need to drive strategic investment:
  • Balancing day-to-day operating spending with revenues by 2028–29, shifting spending toward investments that grow the economy; and,
  • Maintaining a declining deficit-to-GDP (gross domestic product) ratio.
• Budget 2025 also delivers on the Comprehensive Expenditure Review—which will rein in government spending—saving $13 billion annually by 2028-29, for a total with other savings and revenues of $60 billion over five years. 

Details & Supplementary Information

Key Facts and Figures

• Budget 2025 projects the budgetary deficit in 2025-26 to be $78.3 billion, or 2.5 per cent of GDP, falling to $56.6 billion, or 1.5 per cent of GDP by 2029-30.
• Budget 2025 also projects the federal debt-to-GDP ratio to remain relatively stable across the horizon.
• Comprehensive Expenditure Review: To remain fiscally sustainable, the shift in spending toward capital investment requires a reduction in day-to-day operating spending. Budget 2025 delivers on the Comprehensive Expenditure Review (CER), which will achieve savings of $9 billion in 2026-27, $10 billion in 2027-28, and $13 billion in 2028-29. Combined with other savings and revenues in Budget 2025, this will total $60 billion over five years, starting in 2025-26.

Summary of statement of transactions from Budget 2025:

Table A1.7 of Annex 1: Details of economic and fiscal projections, Budget 2025.

Capital Investments

The following charts illustrate the historical and projected levels of capital investment presented in Budget 2025, along with the relative shares of capital investments and operating spending as a per cent of deficit.

Budget 2025: Defence

Key Messages

• Budget 2025 announced that Canada will spend an additional $84.8 billion on defence over five years on a cash basis, starting in 2025-26. This consists of:
  • $81.8 billion over five years on a cash basis, starting in 2025-26, to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF).
  • $30.8 million over four years, starting in 2026-27, and $7.7 million ongoing to establish a new Defence Investment Agency.
  • $52.5 million over five years, starting in 2026-27, and $12.2 million ongoing to modernise and increase capacity for the Industrial Security Program to meet the needs of the new Agency and support Canada's defence industry.
  • $2.7 billion over three years on a cash basis, starting in 2026-27, to renew Operation REASSURANCE, the CAF's largest overseas mission.
  • $300.1 million over three years on a cash basis, starting in 2025-26, to support Operation AMARNA, the CAF's operation in the Middle East.

Details & Supplementary Information

Budget 2025 announced $81.8 billion over five years on a cash basis, starting in 2025-26, to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF), which includes over $9 billion in 2025-26 that was announced by the Prime Minister in June 2025. Key investments are as follows:

• $20.4 billion over five years to recruit and retain a strong fighting force, including generational pay raises for the CAF, and support for CAF health care.
• $19.0 billion over five years to repair and sustain CAF capabilities and invest in defence infrastructure, including expanding ammunition and training infrastructure.
• $10.9 billion over five years for upgrades to Department of National Defence, CAF, and Communications Security Establishment digital infrastructure, including those needed for modern warfare, such as cyber defence.
• $17.9 billion over five years to expand Canada's military capabilities, including investments in additional logistics utility, light utility, and armoured vehicles, counter-drone and long-range precision strike capabilities, and domestic ammunition production, among other investments.
• $6.6 billion over five years to strengthen Canada's defence industry through a Defence Industrial Strategy, the implementation of which will develop our defence industrial base so that more of our military capabilities are procured from Canadian supply chains.
• $6.2 billion over five years to expand Canada's defence partnerships, including expanded military assistance to Ukraine and increased military training and international policy programming.
• $805 million over five years to the Canadian Coast Guard, the Canadian Security Intelligence Service, and Public Services and Procurement Canada for complementary initiatives to support Canada's defence capabilities.

Budget 2025: Housing

Key Messages

• Through Bill C-15, Budget 2025 Implementation Act, No. 1, the Government is proposing to invest $13 billion to help double the pace of affordable homebuilding over the next decade through Build Canada Homes.
  • This includes an $11.5 billion appropriation to Build Canada Homes to support affordable housing projects across the country and catalyse the housing industry.
  • It also includes $1.515 billion to capitalize Canada Lands Company Ltd to support housing construction on its properties held by the corporation, in partnership with Build Canada Homes.
• These investments complement the government's commitment to eliminate the GST for first-time home buyers on homes up to $1 million and to reduce the GST on homes between $1 million and $1.5 million. This measure is included in Bill C-4, introduced in Spring 2025. 
• This builds on its efforts and investments in recent years to reduce local barriers to build, support more development through the tax system, significantly increase financing available to builders, and support housing-enabling infrastructure.

Budget 2025: Infrastructure

Key Messages

• Budget 2025 identified $115.2 billion over the next five years in infrastructure capital investments, including core public infrastructure (e.g., water, public transit); trade and transportation infrastructure; Indigenous community and municipal infrastructure; and other infrastructure (e.g., health, innovation).
• Key investments include:
  • Build Communities Strong Fund: $51 billion over 10 years, starting in 2026-27, and $3.0 billion ongoing per year in new and existing funding to Housing, Infrastructure and Communities Canada to support public infrastructure projects of local and regional significance.
  • Canada Infrastructure Bank (CIB): Division 4 of Part 5 of the Budget Implementation Act proposes to amend the Canada Infrastructure Bank Act, No.1 to increase the CIB's statutory envelope from $35 billion to $45 billion. Budget 2025 also announced that the CIB would be enabled to make investments in any nation-building projects referred to the Major Projects Office, to invest in artificial intelligence infrastructure, and to increase investment target for Indigenous infrastructure to at least $3 billion across its priority sectors. 
  • Trade Diversification Corridors Fund: $5 billion over seven years, starting in 2025-26, to Transport Canada to strengthen supply chains, unlock new export opportunities, and build a more resilient, diversified economy by funding trade infrastructure, including port, air, rail, and road infrastructure, that will alleviate key trade bottlenecks.
  • Arctic Infrastructure Fund: $1 billion over four years, starting in 2025-26, to Transport Canada to support transportation projects in Canada's North, including deep-water ports, sealift infrastructure, airstrips, and all-season roads, that would directly support dual-use capabilities for military and non-military purposes. 
  • First Mile and Last Mile Fund (formerly the Critical Minerals Infrastructure Fund): $371.8 million over four years, starting in 2026-27, for Natural Resources Canada to provide $1.5 billion through 2029-30 to support the development of critical minerals projects and supply chains at the upstream and midstream segments.

Details & Supplementary Information

Build Communities Strong Fund

• The Build Communities Strong Fund will include three streams:
  • a Provincial and Territorial Stream to support provincial and territorial infrastructure projects and priorities. Funding will support housing-enabling infrastructure (e.g. water/wastewater, roads), health-related infrastructure (e.g. hospitals), and infrastructure at colleges and universities. To access funds, PTs must agree to cost-match federal funding and to substantially reduce development charges and not levy other taxes that hinder the housing supply. As part of this stream, $5.0 billion over three years will be dedicated for a Health Infrastructure Fund.
  • a Direct Delivery Stream to support projects that are regionally significant, large building retrofits, climate adaptation, and community infrastructure. 
  • a Community Stream consisting of a rebranded Canada Community-Building Fund to support local infrastructure projects.
• The Build Communities Strong Fund will be funded in part by repurposing unallocated funding under the Canada Housing Infrastructure Fund. 
• Community Projects: Funding was announced for several infrastructure projects with funding to be sourced from the Direct Delivery stream of the Build Communities Strong Fund, or from other existing federal programs, where appropriate.

Canada Infrastructure Bank

• The CIB is an independent Crown corporation and makes its own investment decisions. Unlike other projects the CIB invests in, projects referred to the CIB by the Major Projects Office (MPO) will not need to fall within the CIB's priority sectors. However, the CIB will only be able to invest in projects referred by the MPO that fall within the CIB's legal mandate (i.e., projects that are revenue generating, that crowd in private capital and that are infrastructure projects in the public interest). 

Responsive Lines

If pressed on the Build Communities Strong Fund / community projects:

• More information about the Build Communities Strong Fund and the community projects will be released by the Government in due course.
• The Minister of Housing and Infrastructure is responsible for the Build Communities Strong Fund. I encourage you to engage with him to share your views on program design elements as the program is developed.

If pressed about what is included in the generational investments figure ($115 billion over five years):

• This figure is presented on an accrual basis and the total includes all federal capital investments in infrastructure, both existing and newly announced in Budget 2025 like the Trade Diversification Corridors Fund and the Build Communities Strong Fund. Capital investment is broadly defined as spending that supports capital formation.

If pressed on what portion of the generational investments in infrastructure referenced in budget ($115 billion over five years) is new spending:

• Budget 2025 announced the government's intention to invest $115 billion in infrastructure. This includes existing and new investments including the Build Communities Strong Fund, the Trade Diversification Corridors Fund, and the Arctic Infrastructure Fund.
• For the Build Communities Strong Fund, Budget 2025 provided incremental funding over the fiscal horizon of $9 billion over five years (out of a total of $20.1 billion). The incremental funding over the 10-year period is $17.4 billion (out of a total of $51 billion).
• When we add other infrastructure investments announced in Budget 2025, such as the Trade Diversification Corridors Fund ($5 billion over 7 years) and the Arctic Infrastructure Fund ($1 billion over 4 years), Budget 2025 provided $13.2 billion over five years in incremental funding for infrastructure (out of a total of $24.3 billion). In percentage terms, 54% of this funding over 5 years is incremental. Over 10 years, Budget 2025 provided $23.4 billion in incremental funding for infrastructure (out of a total of $57 billion), or 41% incremental.

If pressed on the increase of the CIB statutory envelope and the impact of the CIB on the government's fiscal position:

• Funding provided to the CIB to finance its investing activities, including the proposed increase in its statutory capital envelope, does not have a direct impact on the government's deficit, as this represents an internal cash transaction within the government. Loans and investments recorded by the CIB through its deployment of those additional funds would be captured as part of the government's total loans, investments and advances. Revenues and expenses flowing from the CIB's loans and investments, such as interest revenues or loan loss provisions, would however have a direct accrual impact on the government's deficit.

Budget 2025: Major Projects Office

Key Messages

• The Major Projects Office (MPO) will advance efforts to catalyze $500 billion in private sector investment over the next five years in Canada, paving the way for a total investment of $1 trillion.
• Launched in August 2025, the MPO seeks to accelerate the delivery of nation-building projects in Canada and act as a single window for project proponents into the federal regulatory process to simplify and accelerate project approvals.
• Projects referred to the MPO are the kinds of projects that will expand Canadian exports to new global partners, unleash Canada's considerable resource potential, and fuel economic growth.
• The MPO is leading a review of Canada's regulatory approval process to ensure all major projects receive federal legislative and regulatory decisions within two years. This will accelerate decision-making and enhance certainty for investors while maintaining responsible and sustainable development that respects the rights of Indigenous Peoples.
• Proponents of projects that are not referred to the MPO will still benefit from regulatory streamlining and financial coordination as they move through other departments more efficiently.

Details & Supplementary Information

Projects referred to the Major Projects Office represent $116 billion in capital investment

1 port project, 3 electricity projects, 5 mining projects, 2 energy projects

1. LNG Canada Phase 2 (Kitimat, BC): This project would double the facility's LNG production, making it the world's second largest LNG terminal and attracting $33 billion in private capital. It will deliver low carbon Canadian LNG to global markets and strengthen local economic growth. Budget 2025 introduced measures to improve LNG competitiveness, including longer export licences and accelerated capital cost allowances for top performing low carbon facilities.
2. Darlington New Nuclear Project (Bowmanville, ON): This project will make Canada the first G7 country to operate a grid scale small modular reactor. Its first unit will power 300,000 homes and support 200 permanent and 1,600 construction jobs. Up to $3 billion in equity from the Canada Growth Fund and the Building Ontario Fund is helping de risk construction, and Budget 2025 confirmed a 15% Clean Electricity Investment Tax Credit for eligible nuclear equipment.
3. Contrecœur Terminal Container Project (Contrecœur, QC): This expansion will increase the Port of Montreal's container capacity by 60%, strengthening supply chains and creating thousands of jobs. Work is advancing under a Memorandum of Understanding between the Major Projects office, the Canada Infrastructure Bank, and the Port Authority, and preparatory construction began in October 2025 following federal permitting.
4. McIlvenna Bay Foran Copper Mine (East Central SK): This project will supply low emission copper and zinc for clean energy and advanced manufacturing while creating hundreds of jobs. Budget 2025 expanded eligibility for the Clean Technology Manufacturing Investment Tax Credit to include polymetallic mining equipment.
5. Red Chris Mine Expansion (Northwestern BC): This expansion will extend the mine's life by more than a decade, increase Canada's copper output by over 15%, and support 1,500 operational and 1,800 construction jobs. Budget 2025 confirmed expanded tax credit eligibility for polymetallic mining.
6. North Coast Transmission Line (Northwestern BC): This three-phase project will twin major transmission lines from Prince George to Terrace and north to Bob Quinn, bolstering telecommunications and electricity access for remote communities and major industrial projects. It is now linked to the Yukon–BC Grid Connect initiative to extend clean power benefits further north.
7. Ksi Lisims LNG (Pearse Island, Nisg̱a'a Territory, BC): This floating LNG facility will be one of the world's lowest emission LNG operations, attracting nearly $30 billion in investment and creating thousands of skilled careers. The project received coordinated federal and provincial environmental assessment approvals in September 2025.
8. Canada Nickel's Crawford Project (Timmins, ON): This project will produce high quality, low carbon nickel for batteries and green steel, drawing $5 billion in investment and creating thousands of jobs.
9. Nouveau Monde Graphite – Matawinie Mine (Saint Michel des Saints, QC): This project will support QC's battery hub through an integrated graphite mine and materials plant, creating more than 1,000 jobs and attracting $1.8 billion in investment.
10. Northcliff Resources' Sisson Mine (Sisson Brook, NB): This project would restore Canada's tungsten production—critical for defence and advanced manufacturing—and produce molybdenum for high strength steel and superalloys. It would reestablish Canada as a secure supplier of tungsten.
11. Iqaluit Nukkiksautiit Hydro Project (Iqaluit, Nunavut): This 15–30 MW Inuit owned hydro project will replace Iqaluit's reliance on 15 million litres of imported diesel each year, eliminating 130,000 tonnes of emissions and delivering affordable, reliable, emissions free power.

Transformative strategies under development by the MPO

1. Alto High-Speed Rail: Canada's first high-speed railway, spanning approximately 1,000 km from Toronto to Québec City and reaching speeds of up to 300 km/hour to cut travel times in half and connect close to half of Canada's population.
2. Port of Churchill Plus: This project will upgrade the Port of Churchill and expand trade corridors with an all-weather road, an upgraded rail line, a new energy corridor, and marine ice-breaking capacity.
3. Critical Minerals Strategy: A priority for the Major Projects Office will be to get more critical minerals projects to final investment decisions, with a focus on sustainability and regulatory certainty.
4. Atlantic Energy: A project that would leverage over 60 GWs of wind power potential in NS, and more across Atlantic Canada, connecting that renewable, emissions-free energy to Eastern and Atlantic Canada to meet rapidly growing demand.
5. Pathways Plus: An Alberta-based carbon capture, utilization, and storage project with additional energy infrastructure that would support a strong conventional energy sector while driving down emissions and emissions intensity from the oil sands. Pathways creates the prospect of facilitating low-carbon oil exports from the Alberta oil sands to a variety of potential markets.
6. The Northwest Critical Conservation Corridor (Northwest BC and the Yukon): Canada's northwestern coast is home to the Golden Triangle - one of the world's richest reserves of the minerals and metals that are essential for the energy transition as well as defence supply chains for Canada and our allies.
7. Arctic Economic and Security Corridor: The Arctic and Security Corridor is a strategic lifeline. Designed as dual-use infrastructure, it supports both Canada's defence and economic goals. From fortified ports and all-season roads to runways and communications systems, it is built to serve military operations and commercial development alike.

Affordability Measures Overview

• This fall, the government launched Build Canada Homes, a new federal agency that will build affordable housing at scale with an initial investment of $13 billion over five years. The government is also eliminating the GST for first-time home buyers on new homes up to $1 million and reducing it on new homes between $1 million and $1.5 million.
• In May 2025, the government announced a middle-class tax cut that would lower the first marginal personal income tax rate by one per cent, from 15% to 14%, effective July 1, 2025. Nearly 22 million Canadians would see tax savings of up to $420 per person in 2026.
• The government committed to starting automatic federal benefits for the 2026 tax year that will reach up to 5.5 million low-income Canadians by the 2028 tax year. This will help eligible individuals receive the government benefits they qualify for such as the GST/HST credit and the Canada Child Benefit.
• The government cancelled the consumer carbon price, bringing down gasoline prices by approximately 18 cents per liter in most provinces and territories, effective April 1, 2025.
• The government will make the National School Food Program permanent—beyond the initial investment of $1 billion over five years. It aims to provide meals for 400,000 more kids every year, beyond those served by existing school food programs.
• The government is making groceries and other essentials more affordable through the new Canada Groceries and Essentials Benefit, which will provide a family of four up to $1,890 this year, and about $1,400 a year for the next four years. We are also taking steps to tackle food insecurity, support producers, and strengthen supply chains.
• The government remains focused on empowering Canadians—by lowering costs, expanding opportunity, and protecting the vital social programs Canadians rely on, including child care and dental care.

Details & Supplementary Information

Launching Build Canada Homes

The government launched Build Canada Homes (BCH) in the fall—a new federal agency that will build affordable housing at scale. It is mandated with building and financing more affordable homes and catalyzing a new housing industry. The government also announced the agency's first four investments and initiatives. This includes protecting existing affordable housing by launching the $1.5 billion Canada Rental Protection Fund under Build Canada Homes. Additionally, BCH will provide $1 billion to build transitional and supportive housing for people who are homeless or at risk of homelessness.

First-Time Home Buyers' GST Rebate

Bill C-4, the Making Life More Affordable for Canadians Act, which was tabled in Spring 2025 and is currently before Parliament, would eliminate the GST for first-time home buyers on new homes at or under $1 million and reduce the GST for first-time home buyers on new homes between $1 million and $1.5 million by introducing a new First-Time Home Buyers' GST Rebate. As a result of this rebate, first-time home buyers will be able to save up to $50,000 on a new home. This measure is expected to deliver $3.9 billion in tax savings to Canadians over five years, starting in 2025-26.

Middle-class Tax Cut

In May 2025, the government announced it would lower the first marginal personal income tax rate from 15 per cent to 14 per cent. The rate reduction, which is currently before Parliament as part of Bill C-4, applies to the first $58,523 of an individual's taxable income. Nearly 22 million Canadians will benefit from tax relief of up to $420 per person, saving two-income families up to $840 this year.

The majority of tax relief will go to Canadians with incomes in the two lowest tax brackets. Nearly 45 per cent of the tax relief will go to Canadians with income below $58,523 (the first tax bracket) and 40 per cent to Canadians with income approximately between $58,523 and $117,045 (the second tax bracket).

Automatic Federal Benefits

To help lower-income individuals receive the benefits to which they are entitled, the government committed to implementing Automatic Federal Benefits for the 2026 tax year, which will reach up to 5.5 million low-income Canadians by the 2028 tax year. Budget 2025 also proposed:

• To amend the Income Tax Act to allow the CRA to file a tax return on behalf of certain eligible individuals with lower incomes in simple tax situations who do not owe tax and do not file themselves.
• To provide $71 million over five years, starting in 2025-26, with $10.4 million in remaining amortisation and $8.3 million ongoing, to the CRA to implement these new services.

Consumer Fuel Charge

On March 14, 2025, the government announced that it will cease the application of the federal fuel charge, effective April 1, 2025. It also removed the requirement for provinces and territories to maintain a consumer-facing carbon price. These actions have reduced gasoline prices at the pump in most provinces and territories by up to 18 ¢/L compared to 2024–25 levels, thereby contributing to lower headline inflation. 

The government is winding down mechanisms used to return direct fuel charge proceeds to Canadians, small and medium-sized businesses, farmers, and Indigenous governments. Eliminating the fuel charge, which is currently before Parliament as part of Bill C-4, will give Canadian consumers and businesses certainty that the consumer carbon price is being permanently removed from legislation.

National School Food Program

Originally announced on April 1, 2024 with an investment of $1 billion over five years, the program aimed at providing meals to 400,000 more kids every year, beyond those served by existing school food programs. In Budget 2025, the program received permanent funding of $216.6 million per year, starting in 2029-30.

Bill C-15 (Budget Implementation Act, 2025) enacts the National School Food Program Act, which sets out the Government of Canada's vision for the National School Food Program and commits to maintaining long-term funding to provinces, territories, and Indigenous peoples for the ongoing implementation and maintenance of the Program.

As of March 2025, all 13 provinces and territories have signed agreements with the federal government to flow funding under the program until March 2027. The rollout of the program's distinctions-based funding for First Nations on reserve as well as Inuit, Métis, and Modern Treaty and Self-Government agreement holders remains ongoing.

Canada Groceries and Essentials Benefit

The Canada Groceries and Essentials Benefit would build on the existing Goods and Services Tax (GST) Credit and provide $11.7 billion in additional support over six years to over 12 million individuals and families, by:

1. providing a one-time top-up payment to be paid as early as possible this spring and no later than June 2026 (based on January 2026 eligibility)—equal to a 50% increase in the annual 2025-26 value of the GST Credit. This would deliver $3.1 billion in immediate assistance to individuals and families who currently get the GST Credit.
2. increasing the value of the Canada Groceries and Essentials Benefit by 25% for five years starting in July 2026. This increase would deliver $8.6 billion in additional support over the 2026-27 to 2030-31 period, including to 500,000 new individuals and families.

These changes are subject to Royal Assent of enabling legislation.

Recipients would not need to apply for the additional payments, but should file their 2024 tax return if they have not done so already to be able to receive the top-up, and must file their 2025 tax return to receive the increased Canada Groceries and Essentials Benefit payments as of July 2026.

Tackle food insecurity, support producers, and strengthen supply chains

To help keep food affordable for Canadians and strengthen the resilience of Canada's food supply chain, the government has announced targeted measures to support businesses, producers, and local organisations, including:

• The government is setting aside $500 million from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians at the checkout line.
• For the same purpose, the government will create a $150 million Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.
• To lower the cost of food production, the government is introducing immediate expensing for greenhouse buildings. This allows producers to fully write off greenhouses acquired on or after November 4, 2025, and that become available for use before 2030. This measure supports increased domestic supply and investment in food production over the medium-term.
• To ease immediate pressures with food banks, the government is providing $20 million to the Local Food Infrastructure Fund. This supports food banks and other national, regional, and local organisations to deliver more nutritious food to families in need.
• To tackle the root causes of food insecurity, the government is developing a National Food Security Strategy – one that strengthens domestic food production and improves access to affordable, nutritious food. This strategy will also include measures to implement unit price labelling and support the work of the Competition Bureau in monitoring and enforcing competition in the market, including food supply chains.

Canadian Dental Care Plan

The Canadian Dental Care Plan is available to uninsured Canadians with a family income of less than $90,000, with no co-pays for families under $70,000. The program first launched in 2023, starting with seniors. Program eligibility gradually expanded to individuals with a valid Disability Tax Credit, children under the age of 18, and then individuals between the ages of 18 to 64. As of May 2025, all eligible uninsured Canadians of all ages can apply.

Canada-wide child care system

As part of Budget 2021 the government committed to build a Canada-wide Early Learning and Child Care system with PTs. Key targets that PTs have committed to through bilateral agreements under the Canada-wide system include:

• Reduce fees for regulated child care by 50% by December 2022 (completed);
• Reduce fees for regulated child care to an average of $10-a-day by March 2026; and
• Build 250,000 new regulated child care spaces by March 2026.

The majority of PTs have signed extension agreements for 2026-27 to 2030-31, which provide them with a 3 per cent funding top-up to sustain their systems without any additional targets. Alberta, Saskatchewan and Ontario have not yet signed extension agreements. As of March 31, 2026, the government will have provided over $35 billion for ELCC, including for Indigenous ELCC, and committed to ongoing funding of $9.2 billion annually.

Section 1: Economic Context and Affordability

Section 2: Grocery Prices

Section 3: Housing, rent and other important prices

Appendix: Additional Wage Charts

Grocery Affordability and Food Inflation

Key Messages

• Grocery affordability is top of mind for Canadians and also for the Government. All families in Canada deserve access to affordable, safe, nutritious and high-quality food.
• Recently, food price increases have been mainly limited to specific products such as beef, coffee, cocoa, and lettuce. These are largely due to global supply factors. However, grocery prices are running ahead of CPI by approximately 2.5 per cent since February 2025.
• On January 26, the government announced new measures to make groceries and other essentials more affordable:
  • A Canada Groceries and Essentials Benefit – formerly the Goods and Services Tax (GST) Credit – that will increase by 25% for five years beginning in July 2026, and a one-time payment, equivalent to a 50% increase this year.
  • $500 million set aside from the Strategic Response Fund to help businesses address the costs of supply chain disruptions.
  • $150 million Food Security Fund under the existing Regional Tariff Response Initiative.
  • Immediate expensing for greenhouse buildings.
  • $20 million for food banks through the Local Food Infrastructure Fund.
  • Developing a National Food Security Strategy which will include measures to implement unit price labelling and support the work of the Competition Bureau.
• Existing measures to tackle these rising food prices include:
  • Over $130 million in funding for the Local Food Infrastructure Fund and food banks;
  • $14.9 million to support food security in the North through the regional development agencies;
  • Over $1.5 billion in funding for Nutrition North Canada; and
  • $1 billion investment into the National School Food Program, which we have made permanent with ongoing funding of $216.6 million per year starting in 2029-30.

Details & Supplementary Information

Grocery price inflation, at 4.7 per cent year-on-year in November 2025, has been running ahead of both headline CPI and its pre-pandemic pace (both 2.2 per cent) by 2.5 per cent since February 2025.

PM News Release (Jan 26): "To bring down your costs, Canada's new government is:

1. Putting more money back in Canadians' pockets
   • The government is introducing the new Canada Groceries and Essentials Benefit – formerly the Goods and Services Tax (GST) Credit. We are increasing its amount by 25% for five years beginning in July 2026.
   • In addition to that, we are providing a one-time payment, equivalent to a 50% increase this year.
   • Combined, this means that a family of four will receive up to $1,890 this year, and about $1,400 a year for the next four years; and a single person will receive up to $950 this year, and about $700 a year for the next four years.
   • The new Canada Groceries and Essentials Benefit will provide additional, significant support for more than 12 million Canadians.
2. Tackling food insecurity, supporting producers, and strengthening supply chains
   • The government is setting aside $500 million from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians at the checkout line.
   • For the same purpose, the government will create a $150 million Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.
   • To lower the cost of food production, we are introducing immediate expensing for greenhouse buildings. This allows producers to fully write off greenhouses acquired on or after November 4, 2025, and that become available for use before 2030. This measure supports increased domestic supply and investment in food production over the medium-term.
   • To ease immediate pressures with food banks, the government is providing $20 million to the Local Food Infrastructure Fund. This supports food banks and other national, regional, and local organizations to deliver more nutritious food to families in need.
   • To tackle the root causes of food insecurity, we are developing a National Food Security Strategy – one that strengthens domestic food production and improves access to affordable, nutritious food.
   • This strategy will also include measures to implement unit price labelling and support the work of the Competition Bureau in monitoring and enforcing competition in the market, including food supply chains."

Housing Affordability (and Immigration)

Key Messages 

• The Government has committed to making homes more affordable for Canadians. In Spring 2025, the government tabled legislation to eliminate the GST for first-time home buyers on homes up to $1 million and to reduce the GST on homes between $1 million and $1.5 million.
• The Government has committed doubling the pace of residential construction over the next decade. This commitment is supported by an initial $13 billion investment in Build Canada Homes to catalyze the housing industry. 
• This builds on efforts and investments made in recent years, including to reduce local barriers to build, support more development through the tax system such as the removal of GST on purpose-built rental housing, significantly increasing financing available to builders, and supporting housing-enabling infrastructure.
• In parallel, the Government has taken steps to align permanent and temporary immigration more closely with housing capacity and to remove federal barriers to trade and labour mobility.
• The 2026-2028 Immigration Levels Plan maintains permanent resident arrivals at less than one per cent of the population beyond 2027 and reduces the total number of temporary residents to less than five per cent of Canada's population by the end of 2027.

Details & Supplementary Information

• Budget 2025 included significant commitments related to housing affordability, such as: 
  • Launching Build Canada Homes: As announced on September 14, 2025. The 2025 Budget Implementation Act would establish a statutory appropriation of up to $11.5 billion to defray costs related to Build Canada Homes and a statutory appropriation of up to $1.515 billion to capitalize Canada Lands Company Ltd. The Government also proposes to introduce legislation establishing the final organizational form of Build Canada Homes.
  • Building More Multi-Unit Homes: Budget 2025 announced that the government will increase the Canada Mortgage Bond (CMB) annual issuance limit from $60 billion to $80 billion, starting in 2026 to unlock incremental funding for mortgage providers to support thousands of new multi-unit housing units per year.
  • Eliminating the Goods and Services Tax (GST) for First-Time Home Buyers: Bill C-4, the Making Life More Affordable for Canadians Act, which was tabled in Spring 2025, would eliminate the GST for first-time home buyers on new homes at or under $1 million and reduce the GST for first-time home buyers on new homes between $1 million and $1.5 million. 
  • Improving Foreign Credential Recognition: As announced on October 27, 2025, Budget 2025 proposed to provide $97 million over five years, starting in 2026-27, to Employment and Social Development Canada to establish the Foreign Credential Recognition Action Fund to work with the provinces and territories to improve the fairness, transparency, timeliness, and consistency of foreign credential recognition, with a focus on health and construction sectors. This funding will be sourced from existing departmental resources.
  • Expanding the Union Training and Innovation Program: Budget 2025 proposed to provide $75 million over three years, starting in 2026-27, to Employment and Social Development Canada to expand the Union Training and Innovation Program, which supports union-based apprenticeship training in the Red Seals trades.
• In addition, Budget 2025 announced that the 2026-2028 Immigration Levels Plan stabilises permanent resident admission targets at 380,000 per year for three years, while setting a target for new temporary resident arrivals at 385,000 in 2026 and 370,000 in 2027 and 2028. The fiscal cost is $168.2 million over four years, starting in 2026-27, and $35.7 million ongoing.

The Free Trade and Labour Mobility in Canada Act received Royal Assent on June 26, 2025, demonstrating the government's continued commitment to remove federal barriers for trade and labour mobility, including those which are important to the homebuilding sector.

• Specifically, federal standards for licenses and certifications for workers are now considered met when authorized provincially/territorially and goods and services that meet provincial/territorial requirements are also recognized federally. Many provinces have entered into related bilateral agreements.

Committee Member Biographies
Standing Committee on Finance (FINA)

About the Committee

The mandate of the Standing Committee on Finance, as established under Standing Order 108 of the Standing Orders of the House of Commons, is to examine and enquire into all matters referred to it by the House and to send for persons, papers, and records, as it operates in accordance with its mandate.

Standing committees are empowered to study and report on all matters relating to the mandate, management and operation of the department or departments of government that are assigned to them from time to time by the House. For the Standing Committee on Finance, these include the Department of Finance and the Canada Revenue Agency.

The committee also has the responsibility to consider budgetary policy, as outlined in Standing Order 83.1, including studies on proposals for the government's budgetary policy and the budget itself. The committee normally undertakes its pre-budget consultations during the first sitting week of September and presents its report by the third last sitting day in December, as outlined in Standing Order 28(2).

In each parliamentary session, the committee's work may include:

• pre-budget consultations;
• briefing sessions by departmental officials on federal programs;
• examination of planned expenditures of the Department of Finance and the Canada Revenue Agency;
• a review of Order in Council appointments;
• a review of Monetary Policy Reports of the Governor of the Bank of Canada;
• a review of the Minister of Finance's economic and fiscal updates;
• consideration of proposed legislation;
• special studies on topics within the committee's mandate; and
• consideration of reports of subcommittees.

Conservative Party

Sandra Cobena
Conservative, Newmarket—Aurora (Ontario)

Biography

Sandra Cobena was first elected as the Member of Parliament for Newmarket—Aurora in 2025.

Before entering politics, Ms. Cobena worked as a senior manager at TD Bank. Her professional background includes advising Ontario-based companies on a wide range of financial strategies related to mergers, acquisitions, growth, and restructuring.

Ms. Cobena immigrated to Canada from Ecuador as a teenager. She holds a master's degree in management from the London School of Economics and a combined honours degree in global commerce and finance from Western University.

Overview of Issues Raised

In committee, Ms. Cobena's questions have focused on the government's overall management of the economy. She has expressed concern about the government's fiscal anchors, deficit levels, and debt management. Moreover, she regularly speaks to cost-of-living concerns of Canadians.  In the House, Ms. Cobena has spoken about affordability concerns, economic growth, and support for law enforcement to ensure community safety.

Jasraj Singh Hallan, Vice-Chair
Conservative, Calgary East (Alberta)
Opposition Critic for Finance

Biography

Jasraj Singh Hallan has been the Member of Parliament for Calgary East since 2019. He is the Opposition Critic for Finance—continuing this role from the 44th Parliament.

Before his role as finance critic, he served as Opposition Critic for Immigration, Refugees and Citizenship from 2021 to 2022. In that role, Mr. Hallan's parliamentary activities largely focused on issues related to Canada's immigration system, application backlogs and processing time, and temporary foreign workers.

Mr. Hallan was raised in northeast Calgary, where he earned an accounting diploma from the Southern Alberta Institute of Technology. He has a certified Master Builder designation and ran a homebuilding business in Calgary.

Overview of Issues Raised

Mr. Hallan's questions have focused on the government's management of the economy and its impact on living standards (i.e., affordability and GDP per capita), productivity levels, and job creation. Last session, he initiated a study in committee on the impact of inflation and interest rates on mortgages.

Mr. Hallan has also expressed interest in Canada's energy and natural resources sectors, namely oil and gas. He has questioned government regulation of the sector and the impact of phasing out fossil fuels on the economy and workers. In line with his party's position, Mr. Hallan has advocated for repealing the Impact Assessment Act and Canadian Energy Regulator Act, and Oil Tanker Moratorium Act.

Private Members' Bills and Motions

In the 43rd Parliament, Mr. Hallan introduced Bill C-304, An Act to amend the Criminal Code (grooming), which dropped from the Order Paper with the 2021 election. The bill aimed to make grooming an aggravating factor when a court imposes a sentence for certain sexual offences. It would also consider grooming as a practice where the offender has communications or conducts relations with victims with the intention of leading them to participate in the offence.

Pat Kelly
Conservative, Calgary Crowfoot (Alberta)

Biography

Pat Kelly has been the Member of Parliament for Calgary Crowfoot since 2015. He is the Associate Opposition Critic for Prairie Economic Development and Economic Advisor to the Conservative Leader.

Prior to his election, Mr. Kelly worked as a mortgage broker and co-owned a brokerage. He served as President of the Alberta Mortgage Brokers' Association and sat on the Real Estate Council of Alberta, a provincial regulatory body. He also taught pre-licensing education at Mount Royal University.

Mr. Kelly graduated from the University of Calgary with a bachelor's degree in political science.

Overview of Issues Raised

In the House, Mr. Kelly has spoken about Canada's economic position, regulatory barriers to natural resources development, and affordable housing for the Canadian military. In line with his party's position, he opposes additional government spending and regulatory barriers to natural resources projects. He has advocated for repealing the Impact Assessment Act and Canadian Energy Regulator Act, and Oil Tanker Moratorium Act.

Private Members' Bills and Motions

In the 44th Parliament, Mr. Kelly introduced Bill C-266, An Act to amend the Excise Act and the Excise Act, 2001 (adjusted duties - beer, malt liquor, spirits and wine), which was dropped from the Order Paper with the 2025 election. The bill aimed to repeal or amend sections that provide for annual adjustments to the duties imposed on beer, malt liquor, spirits and wine.

Éric Lefebvre
Conservative, Richmond—Arthabaska (Quebec)

Biography

Éric Lefebvre was first elected as the Member of Parliament for Richmond—Arthabaska in 2025. Mr. Lefebvre is the Associate Opposition Critic for Finance.

Mr. Lefebvre was previously a member of the National Assembly of Quebec representing the electoral district of Arthabaska from 2016 to 2025. He was a member of the Coalition avenir Québec (CAQ) until he sat as an independent in 2024. From 2018 to 2024, he was Chief Government Whip.

From 2001 to 2008, Mr. Lefebvre was a city councillor in Victoriaville, Quebec. He left the position to run in the 2008 federal election. During this time, he worked as a senior assistant to former Conservative minister Denis Lebel.

He holds a bachelor's degree in physical education from the Université du Québec à Trois-Rivières.

Overview of Issues Raised

In committee, Mr. Lefebvre has raised questions on the government's overall management of the economy. He has questioned the government's transparency over its fiscal anchors and debt management. He has spoken to supporting seniors' cost-of-living and financial security, highlighting increased fraud committed against seniors. In the House, Mr. Lefebvre has sought information on Canada's fiscal position and deficit projections.

Bloc Québécois

Jean-Denis Garon, Vice-Chair
Bloc Québécois, Mirabel (Quebec)

Biography

Jean-Denis Garon has been the Member of Parliament for Mirabel since 2021. He is the Bloc Québécois Critic for Finance, National Revenue, and Aeronautics.

In Parliament, Mr. Garon previously served as Vice-Chair of the Standing Committee on Industry and Technology (INDU) and Standing Joint Committee for the Scrutiny of Regulations. He also served as the Bloc Critic for Industry and Entrepreneurship.

Before entering politics, Mr. Garon was an economics professor at Université du Québec à Montréal's (UQAM) School of Management, teaching at the undergraduate, master's and doctoral levels. Moreover, he was an economic columnist and commentator for the Journal de Montréal, TVA, QUB radio, CKOI among other media. He also served as Vice-President of Knowledge Transfer at CIRANO (Centre interuniversitaire de recherche en analyse des organisations)—a Quebec-based research centre.

Mr. Garon holds a PhD in economics from Queens University, and bachelor's and master's degrees in economics from UQAM.

Overview of Issues Raised

In the House, Mr. Garon has spoken on a range of issues, including tax fraud, privacy and data protection, support for small businesses, and climate change mitigation. He has expressed concern about the impact of open banking on credit unions and provincially regulated financial institutions, arguing that participation should be optional for them. According to his website, his priorities include increasing the Canada Health Transfer, automatic enrolment for the Guaranteed Income Supplement, creating a tax credit for working seniors, ending fossil fuel subsidies, and developing a national aerospace strategy. In line with his party's stance, he advocates for Quebec's interests and increased autonomy over its own affairs.

Private Members' Bills and Motions

During the 44th Parliament, Mr. Garon introduced Bill C-290, An Act to amend the Public Servants Disclosure Protection Act and to make a consequential amendment to the Conflict of Interest Act, which dropped from the Order Paper with the 2025 election. The bill aimed to expand the application of the Act to additional categories of public servants and extend the period for filing a reprisal complaint.

Liberal Party

Peter Fragiskatos
Liberal, London Centre (Ontario)

Biography

Peter Fragiskatos has been the Member of Parliament for London Centre since 2015. He currently serves as the Parliamentary Secretary to the Minister of Immigration, Refugees and Citizenship.

In Parliament, Mr. Fragiskatos previously served as the Parliamentary Secretary to the Minister of Housing, Infrastructure and Communities, as the Parliamentary Secretary to the Minister of National Revenue, and as a Member of National Security and Intelligence Committee of Parliamentarians.

Prior to entering federal politics, Mr. Fragiskatos was an academic at Western University and a media commentator. His works have been published by major Canadian and international news organizations, including Maclean's, The Globe and Mail, Toronto Star, BBC News, and CNN.

In his riding, he has served on the boards of Anago (Non) Residential Resources Inc. and the Heritage London Foundation. He also ran a youth mentorship program and has worked with several local not-for-profit groups such as the London Food Bank, the London Cross-Cultural Learner Centre and Literacy London, a charity dedicated to helping adults improve their reading and writing skills.

Mr. Fragiskatos holds a political science degree from Western University, a master's degree in international relations from Queen's University, and a PhD in international relations from Cambridge University

Overview of Issues Raised

In his role as Parliamentary Secretary to the Minister of Immigration, Refugees and Citizenship, Mr. Fragiskatos's interventions have largely focused on Canada's immigration system. He has linked immigration policy as fundamental to economic policy and economic growth. In addition, he has expressed interest in health and social assistance measures including the National School Food Program.

Hon. Karina Gould, Chair
Liberal, Burlington (Ontario)

Biography

Karina Gould has been the Member of Parliament for Burlington since 2015.

In Parliament, she has held several roles including Leader of the Government in the House, as well as the Minister of Families, Children and Social Development, Minister of International Development, and Minister of Democratic Institutions.

Before entering politics, Ms. Gould worked as a trade and investment specialized for the Mexican Trade Commission in Toronto, a consultant for the Migration and Development Program at the Organization of American States in Washington, D.C. She also spent a year volunteering at an orphanage in Mexico.

In addition, she has volunteered in her community for several organizations including the Iroquoia Bruce Trail Club, the Burlington chapter of the Canadian Federation of University Women, the Mississauga Furniture Bank, Halton Women's Place, among others.

Ms. Gould attended McGill University and University of Oxford.

Overview of Issues Raised

As chair, Ms. Gould's role is focused on maintaining order and outlining procedures. She typically would not intervene to express her views on a given matter or ask questions to witnesses.

Carlos Leitão
Liberal, Marc-Aurèle-Fortin (Quebec)

Biography

Carlos Leitão was first elected as the Member of Parliament for Marc-Aurèle-Fortin in 2025.

Mr. Leitão was previously a member of the National Assembly of Quebec representing the electoral district of Robert-Baldwin from 2014 to 2022. He was a member of the Quebec Liberal Party and served as Quebec's Minister of Finance from 2014 to 2018.

Mr. Leitão worked in the financial sector for over 30 years. He held different roles at the Royal Bank of Canada before becoming Chief Economist of Laurentian Bank Securities in 2003.

Mr. Leitão immigrated with his family to Canada from Portugal in 1975. He holds a bachelor's degree in economics from McGill University.

Overview of Issues Raised

In committee, Mr. Leitão's questions typically focus on the context surrounding government actions, particularly Canada's trade relationship with the U.S. In the House, Mr. Leitão has spoken about the need for trade diversification and business supports due to U.S. tariffs.

Kent MacDonald
Liberal, Cardigan (Prince Edward Island)

Biography

Kent MacDonald was first elected as the Member of Parliament for Cardigan in 2025.

Before entering politics, Mr. MacDonald operated Pondsedge Farms, his family's dairy and beef operation. He is a past director, vice-chair and chair of Dairy Farmers of PEI., as well as director and vice-chair of the PEI Federation of Agriculture. 

Overview of Issues Raised

In committee, Mr. MacDonald's questions typically focus on the impact of government actions on Atlantic Canadians. He has expressed interest in measures that support small agricultural producers and businesses. In the press, he has expressed support for removing interprovincial trade barriers, increasing defence spending, and defending supply management. He also expressed interest in the condition of local wharves following damage from Hurricane Fiona.

Jake Sawatzky
Liberal, New Westminster—Burnaby—Maillardville (British Columbia)

Biography

Jake Sawatzky was first elected as the Member of Parliament for New Westminster—Burnaby—Maillardville in 2025.

Mr. Sawatzky received a bachelor's degree in neuroscience from the University of British Columbia (UBC) in 2024. During his time at UBC, he was a member of Beta Theta Pi fraternity and served as co-president of their annual hockey event, Drop the Puck for Mental Health, to raise funds for the Canadian Mental Health Association.

Overview of Issues Raised

In committee, Mr. Sawatzky's questions typically focus on the impact of government actions on young Canadians. He has also expressed support for measures that support low-income Canadians and those living with disabilities. In the press, Mr. Sawatzky has spoken about mental health and addiction, affordable housing, and public safety.