Prime Minister Mark Carney’s Liberal administration unveiled its inaugural budget on Tuesday, heralding “a fresh era of leadership and a new economic basis.” The 406-page report outlines extensive proposed reductions and investments aimed at fostering growth and productivity in the face of trade uncertainties and an economic slowdown.

Key points from the Liberals’ 2025 budget include:

**Financial Overview**: The budget forecasts a deficit of $78 billion for 2025-26, anticipated to decrease to $65 billion in the upcoming fiscal year and gradually decline to $57 billion by 2029-30. Operational spending is set to be balanced within three years, although this year’s deficit surpasses previous estimates.

**Government Restructuring and Spending Reduction**: Emphasizing a comprehensive review of expenditures, Ottawa aims to curtail day-to-day federal government operational expenses. The plan anticipates saving $13 billion annually by 2028-29, totaling $60 billion over five years through various savings and revenue streams. As part of this restructuring, approximately 40,000 positions in the public service will be phased out by 2028-29.

**Boosting Growth and Competitiveness**: To address economic sluggishness, the government is committed to “supercharging growth” and enhancing Canada’s investment environment to outshine the U.S. A “productivity super-deduction” tax provision is introduced to expedite write-offs for capital investments, alongside new incentives for manufacturing and LNG-related infrastructure.

**Infrastructure Development**: With a focus on expedited project execution, the budget allocates $214 million over five years to advance critical mineral projects and accelerate the Toronto-Quebec City high-speed railway construction. Additionally, $51 billion over a decade is earmarked for local infrastructure projects, aiming to stimulate job creation.

**Immigration Reforms**: The budget proposes a significant reduction in temporary resident admission targets to ease pressure on housing and healthcare systems. Plans include transitioning up to 33,000 work permit holders to permanent residency and initiatives to attract international talent.

**Defence Spending Increase**: A substantial hike in defence spending is outlined, with $81.8 billion allocated over five years. Funds will be directed towards recruitment, retention, and capability enhancement within the Canadian Armed Forces, emphasizing modernizing digital infrastructure for cyber defense purposes.

**Environmental Policies**: The budget hints at potential changes to oil and gas emission regulations, suggesting alternative strategies such as carbon markets and carbon capture technologies to potentially eliminate the need for emission caps.

**CBC/Radio-Canada Funding**: A $150 million infusion into CBC/Radio-Canada aims to bolster public service offerings, with a focus on modernizing the broadcaster’s mandate for enhanced independence. Collaboration with CBC/Radio-Canada for potential Eurovision Song Contest participation is also teased.

**Tax Reforms**: The budget eliminates high-end taxes on vacant housing ownership, luxury aircraft, and boats to simplify the tax system and reduce compliance burdens for taxpayers and administrative costs for the government.