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The Guardian - AU
The Guardian - AU
World
Leyland Cecco in Toronto

Canada budget adds tens of billions to deficit as Carney spends to dampen Trump tariffs effect

Prime minister Mark Carney holds up copies of the 2025 Canada budget before the tabling of the federal budget on Parliament Hill in Ottawa.
The prime minister, Mark Carney, holds up copies of the 2025 Canada budget on Parliament Hill in Ottawa. Photograph: Canadian Press/Shutterstock

A protracted trade war with the United States and a weakening domestic economy has forced Mark Carney to run a deficit tens of billions larger than initially forecast in his first-ever federal budget.

The spending plan, titled “Canada Strong” envisions significant new defence spending, a reduction of the country’s civil service and “generational investments” that would reshape the nature of the country’s economy.

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