Prime Minister Mark Carney has unveiled a plan to mobilize $1 trillion in total public and private spending over the next five years, according to a statement released Friday.
Critics argue the "investments" will drive Canada further into economic decline and inflation — Carney says otherwise.
The strategy aims to reverse a decade of stagnant business investment, created by former prime minister Justin Trudeau, sluggish productivity growth of just 0.3% annually, and disruptions from a fracturing global trading system that have hampered wages and job creation.
"This budget is about building Canada strong: investing in our people, our ideas, and our industries," Carney declared. "We will enable $1 trillion in total investments in five years – to give ourselves more than any country could ever take away."
The government's $280 billion in direct capital spending and incentives is projected to leverage over $1 trillion overall, spanning $315 billion in infrastructure, $270 billion in industrial development, $210 billion in research and development, $130 billion in housing, and more.
Key measures include a "Productivity Super-Deduction" slashing the marginal effective tax rate to 13.2% – the lowest in the G7 – through immediate expensing for manufacturing, clean energy, and innovation assets.
Other highlights: Enhanced Scientific Research and Experimental Development (SR&ED) tax credits with higher thresholds; a new Major Projects Office fast-tracking $150+ billion in energy and trade initiatives; a $1.7 billion talent strategy to attract 1,000 top researchers; and pro-competition reforms in telecom, banking, and labor to lower consumer costs.
Finance Minister François-Philippe Champagne hailed it as a "drastically different economic strategy" focused on high-return investments in workers and businesses.
On inflation risks: With global uncertainty mounting, the plan's heavy reliance on tax incentives and private-sector leverage – rather than direct deficit spending – is designed to boost supply-side capacity and productivity, potentially offsetting demand pressures.