Federal Budget 2025: Key Highlights and Figures from the “Canada Strong” Document
- Small Town Productions
- 11 hours ago
- 4 min read
The Government of Canada released its 2025 federal budget yesterday (November 4, 2025) under the title Budget 2025 – Canada Strong.
The 493-page document outlines the government’s fiscal framework and policy priorities under three headings: Build, Protect, and Empower.
Fiscal Framework
The budget describes a fiscal strategy to “spend less to invest more,” separating daily operating costs from long-term capital spending.Two main goals are identified: balancing regular operating spending with revenues by 2028-29 and maintaining a declining deficit-to-GDP ratio.
The document projects a budgetary deficit of 78 billion dollars in 2025-26, narrowing to 57 billion dollars by 2029-30.As a share of the economy, the deficit-to-GDP ratio is forecast to fall from 2.3 percent in 2025-26 to 1.4 percent by 2029-30.
A Comprehensive Expenditure Review is expected to generate 60 billion dollars in savings over five years through program restructuring and slower administrative growth.
Program-spending growth, which averaged about 8 percent annually over the past decade, is projected to decline to below 1 percent through 2029.
The budget lists Canada’s net debt-to-GDP ratio at 13.3 percent, identifying it as the lowest among G7 countries.According to figures cited in the publication from the International Monetary Fund Fiscal Monitor (October 2025), the comparative net debt-to-GDP ratios are:
Japan: 130.1 percent
Italy: 126.9 percent
France: 108.2 percent
United States: 99.6 percent
United Kingdom: 94.6 percent
Germany: 48.7 percent
Canada: 13.3 percent
The document also notes that Canada and Germany are the only G7 countries holding AAA credit ratings.
Source: Budget 2025 – Canada Strong, Department of Finance Canada, pages 71 – 72 (IMF Fiscal Monitor October 2025 data as cited within).
Economic Context
The budget attributes current economic pressures to slower global growth and higher trade barriers.It reports that average U.S. tariffs have risen to 17 percent, contributing to declines in Canadian exports of steel, aluminum, autos, and agricultural goods.
The national unemployment rate is listed as 7.1 percent (as of September 2025), and real GDP growth is projected at about 1 percent per year for 2025 and 2026.
Investment Priorities
The document outlines 280 billion dollars in capital investments over five years, or roughly 450 billion on a cash basis.Planned allocations include:
Infrastructure: 115 billion
Productivity and Competitiveness: 110 billion
Defence and Security: 30 billion
Housing: 25 billion
These amounts are presented as projections within the government’s publication.
Housing and Affordability
A new federal agency, Build Canada Homes, is introduced to coordinate public and private housing investment.The goal is to increase national homebuilding from about 280,000 units per year to between 430,000 and 480,000 within a decade.
The budget also proposes removing the Goods and Services Tax (GST) for first-time home buyers on properties valued under one million dollars.
Other affordability measures listed in the document include:
A middle-class income-tax reduction
Cancellation of the consumer carbon price
Permanent funding for the National School Food Program
An automatic benefits system for low-income individuals beginning in the 2028 tax year
No third-party evaluation of these programs is included in the document.
Defence and Security
The budget states that Canada will meet NATO’s 2 percent defence-spending target in 2025 and plans to move toward a 5 percent Defence Investment Pledge by 2035.
It describes the creation of a Defence Investment Agency, modernization of Canadian Armed Forces equipment, and increased pay for service members.
Other measures include hiring 1 000 RCMP officers and 1 000 Canada Border Services Agency officers, and forming a Financial Crimes Agency to investigate money-laundering and complex fraud.
Innovation and Productivity
The budget introduces a Productivity Super Deduction to accelerate business-investment write-offs and expands research-and-development tax incentives.
It also allocates funding for artificial-intelligence and technology projects.These measures are described as encouraging private capital and supporting productivity growth, though no independent verification is provided.
Public-Service Modernization
A new Office of Digital Transformation is outlined to coordinate technology adoption within federal operations.The budget links this initiative to efficiency and cost savings but does not provide specific implementation timelines or evaluation criteria.
What Are Your Thoughts?
The 2025 budget lays out the federal government’s planned spending, savings, and economic priorities for the years ahead. Do you believe these measures address the right areas of need? How do you feel about Canada’s fiscal approach compared to other G7 countries?
Share your thoughts and join the conversation below.
To keep updated with our latest news articles by having them sent straight to your email please visit www.smalltownproductions.org/signup or check out our other articles at www.smalltownproductions.org/news
Link for Donations
We’re proudly independent, with no corporate or political ties, just a commitment to truthful, fact-based reporting. Your support not only helps us stay free from outside influence but also allows us to give back to the communities we serve through meaningful coverage, outreach, and support where it matters most. If you value honest local journalism, please consider donating through the link below. Anything helps us keep you informed and make a real difference.
Comments