Front Burner - Carney’s budget: generational or generic?

Episode Date: November 5, 2025

Prime Minister Mark Carney and the Liberal government have unveiled a budget that calls for $141-billion of new spending in the next five years to prop up an economy grappling with major economic disruptions. It also proposes $51.2-billion in cuts and savings, including the slashing of tens of thousands of public service jobs.From billions of investment in infrastructure and defence, to new details about the government’s climate and immigration targets, we’ll break it all down with Aaron Wherry and David Coletto.Aaron is a senior writer with CBC’s parliamentary bureau, and David is the CEO and founder of Abacus Data.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Donate at lovescarbro.cairbo. This is a CBC podcast. To weather the storm of uncertainty, we will not lower ourselves, Mr. Speaker. Quite the opposite. We will raise them to catch the winds of economic change. Hey, everybody. It's Jamie, and I'm here with my...

colleague Aaron Wary, who has been in lockup all day looking at Mark Carney's first and very much anticipated budget. Hi, Aaron. Welcome out of lockup. Thank you for being here. Hey, Jamie, it's good to be free. I am also here with David Coletto, head of avocous data, who's going to help us unpack all of this as well. David, good evening to you. Good to see you all and I was not locked up. So I felt free all day. Me neither. It was, it was good. Sorry, Aaron. Okay. Okay. There's a lot to go here, not the least of which is a conservative MP who has resigned from caucus and cross the floor to the liberals. So let's get straight into the Convo. I know that you two really want to talk about capital investments, but I actually just want to take a minute here

and talk about what really jumped out to me, which is what seemed like a commitment from this government to help Canada join Eurovision. And David, is this a naked attempt to get public opinion on side here. Well, look, I think it's at least a naked attempt to get us talking about something, and you just proved its effectiveness. There's one thing that Canadians might remember from this budget is bad. Let's not talk about $78 billion deficit. Let's talk about Eurovision. I know. I just... Sometimes a political strategy that works. I did it. They were like, hey, look over here, and I looked, I guess. Is the lesson here. Aaron. I know that you are a guy who loves nuance and complexity.

So let me give you this completely reductive question. Right off the top, if you could write a headline for this budget, what would it be? I mean, I guess I'll go with the headline that I put on the piece I just wrote, which I think is, are Canadians going to get behind Mark Carney's generational budget? There's a lot in this budget, and I don't know that it's going to please everyone. And I think it's also sort of the first time we've really seen Mark Carney have to make a bunch of choices and decisions and lay down what his agenda is. And I'm interested to see how Canadians respond to it. Well, let's go through some of what was in the budget.

Do you want to start with the deficit number and work backwards from there? Sure. Okay, $78 billion for the 25, 26 fiscal year. we were prime for this. It is what we were expecting. Some people anticipated it might have been closer to 100 billion. That is a very large number, 78 billion. Do you want to put a little more context around that? Yeah. So look, it's bigger than the federal government projected last December when, as you may remember, Christopher-Freeland presented or sort of presented the fall economic statement, resigned, I guess, on the way to doing so. it's bigger than the deficit that the Carney Liberals projected in the spring when they laid out their election platform. You know, it sort of comes down to how you look at it, I guess, in a way, because as you say, there was a lot of projections that said, oh, you know, this deficit

could be 90 billion. It could be 100 billion. So I confess when I came in, went into the lockup and saw it was, it was 78. Oh, well, that's not that much. So, you know, it's sort of a bit of expectation management. It's big and it's, you know, going to be the focus of conservative attacks, but it's maybe not quite as big as some people thought it was maybe going to be. And I'll just stick with you for a little bit longer and then we'll circle back with David just because you were in the lockup. Like, just give me some of the highlights here. When we talk about how the deficit is being used, what are the biggest line items? What is the government spending the most money on?

Yeah, so the single biggest line item is about $57 billion to, I think, it's, re-arm, reinvest in the Canadian Armed Forces. So this is the big defense spending push that, you know, we were told was coming, that lots of people said we needed to do. Now you're sort of seeing what it looks like in hard numbers. The second biggest, you know, single line item is actually the middle class income tax cut that they implemented in June. It's about $27 billion. Then there's a bunch of, you know, kind of the bigger pieces of this, you know, broader Kearney agenda that's around building and getting infrastructure and housing built. You know, there's $20 billion for investments in infrastructure. There is $12 billion for, you know, protecting and sort of reorienting strategic sectors like agriculture and the auto sector.

And then there's $7 billion for Build Canada Homes, which is the agency that's going to be focused on, expanding the supply of affordable housing. So there's lots in this budget, actually. There's a ton of stuff that people are going to be going over for days and probably weeks. But those are sort of the biggest items that kind of go into how you get to a $78 billion deficit. I think they're saying all in it's $141 billion in new spending over the next five years. And that will be partially offset by $51.2 billion in cuts. Eventually the deficit is supposed to come down, right? 57 billion in 2930. When it comes to cuts, what is being cut? Yeah, it's a big cut. It's an interesting budget in the sense that, you know, Mark Carney is going to, on the one hand, have to defend

a bigger deficit. And on the other hand, he's going to be, I think, fighting a lot of battles on what's getting cut. And it's unclear to a certain extent what those specific cuts are going to be. There are a few kind of headline items that they throw out. It was reported going of the budget. The, you know, Justin Trudeau's $2 billion tree program is being abandoned. But a lot of the cuts are, you know, at the department level and there's sort of cast in these kind of euphemistic phrases, you know, modernizing government operations, streamlining program delivery and recalibrating government programs. I think it's possible that some of the cuts in there will be relatively easy, but I think a lot of them, you know,

know, when someone finds out they're not getting their funding or the program that they had signed up for suddenly disappears, you're going to hear about that. And I think that's going to lead to, you know, the government having to defend a lot of choices here. Yeah. And just to be clear, you know, certainly there's no indication right now that some of these big social programs that people do really like will be cut dental care, pharma care, $10 day child care. the Canada child benefit, that kind of stuff? Yeah, the government was very specific about kind of drawing a fence around those big programs, around transfers to individuals, around transfers to provinces. And so it's really out of departmental budgets for like, you know, grants and contributions and things like that that I think everyone is looking at. Okay.

And lots of jobs on the table, 40,000 public service jobs, right? 10% of the... Yes. The idea I think is that it still is. is going to be largely based on sort of attrition and retirements. But it is going to be a fairly significant drop. I think they said about 10% drop in the size of the Federal Public Service. I want to dig into a couple of more things here.

We got more details on Cardi's climate. competitiveness plan, and it looks like the oil and gas emissions cap will be scrapped. It certainly is being set up to be scrapped. And just, Aaron, tell me a little bit more about what's going on here. Yeah, I think this isn't entirely unexpected. You know, people could kind of see the writing on the wall for the emissions cap, the oil and gas emissions cap. There is a bit of a wrinkle here in that, you know, they're definitely dangling the possibility that they're willing to get rid of it. But it's contingent on the provinces and territories agreeing to, you know, both strengthen the industrial carbon price and sort of commit to it long term, you know, looking out to 2050 and, you know, getting

to net zero by 2050. So it's sort of a bargain I think they're making with the provinces and perhaps particularly with Alberta Premier Daniel Smith, which is, you know, look, we'll get rid of the cap. But, you know, we need a strong industrial carbon price that, you you know, their argument is if we have a strong industrial carbon price in place, that will kind of ultimately do what a cap would have done anyway. David, how do you think something like this might land? This is not new. If you care deeply about the environment or climate change, I think the Carney government from pretty much day one is a signal that it is going to pull back the

ambition of the Trudeau government. And this budget moves it there. I think from a public opinion perspective, you know, climate change just continues to drop in terms of a salient issue relative to others. So only about 11% in our last survey put climate change in the environment in their top three issues. It's pretty close to the lowest that's been in a number of years, in large part because people are now worried about their job and housing and healthcare remain top concern. So I don't suspect from a broad perspective that Carney government's going to expect much public pushback to this, but to Aaron's point earlier about specific civic stakeholders who might look at this budget and say, like, you know, where's, where's the Mark Carney we

saw in that book you wrote a few years ago? Yeah. Values. I think that that's a little bit of the risk. Karnie has also been talking about bringing immigration under control and the new immigration plan cuts the annual target for temporary residents almost in half to 43 percent. Permanent residents come down a little bit, but not, none of time. What do you think, David, that this government is hoping to achieve with this reduction? Well, I think it's a, they're entirely responding to public opinion on this. Again, well, climate has fallen as the top issue. The immigration has risen.

And I think you've seen over the last two years, almost a realignment in Canadian politics on immigration, where the liberals have moved to a more restrictive kind of position, starting with Trudeau and now continuing with Carney and the conservatives have kind of went even further. And I think this is, you know, in light of that, could be argued as a more moderate version of what maybe the conservatives would do who would, you know, just weeks ago, Polly have announced he would scrap the temporary foreign worker program entirely.

Under this proposal, existing permits would be wound down until the program is entirely eliminated. Canadian jobs will go to Canadian workers first. It's time that Mr. Carney... So I think this is, again, an attempt to say we're listening, we're responding, we're trying to get the system to be in a place that people feel like is in control and still catching up on things like housing, healthcare, and other kinds of services that Canadians say right now, high levels of immigration or the last number of years has really created some scarcity

around. Erin, the other one that I wanted to dig into a little bit was the productivity super deduction, which was kind of like a headline in there, I guess. or it's a bunch of provisions designed to try to make this country a more business-friendly environment, is how I read it. But I was in lockup. You were, so can you tell me a little bit more about what was announced around this and what the hope for these kind of moves is?

Yeah, I think there's a, so there's a mix of things. Some of it is pre-existing measures that the true government was going to implement, and then some is new. And it is, it really is focused at this question of business investment, corporate investment, and trying to solve that issue, which is longstanding and, you know, is now being exacerbated by the tariffs and trade issues with the United States. And so I think it, you know, it's trying to address, I guess, a few problems at the same time. And it fits within sort of the larger, you know, agenda, which is, you know, capital investment, building the Canadian economy up, you know, trying to stimulate economic growth and investment. And that being sort of the primary focus of this government. Lots of write-off opportunities for sure, capital investment write-offs.

This ascent isn't for everyone. You need grit to climb this high this often. You've got to be an underdog that always overdelivers. You've got to be 6,500 hospital staff, 1,000 doctors, all doing so much with so little. You've got to be Scarborough. Defined by our uphill battle and always striving towards. new heights. And you can help us keep climbing.

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From manufacturing to contractors, liability to commercial fleet. We have the trusted expertise in solutions you and your customers deserve. Contact your dedicated underwriter today for simple to complex and everything in between. Intact Insurance. Let's zoom out now. I feel like we've hit a lot of the big highlights, but I know that going into this budget, there was a hope, among many, that it would help to answer some of the questions that people have been asking vis-a-vis, what is this government's plan?

You know, what is it exactly that they're trying to execute here? And what questions were answered for you today that we haven't yet discussed? Aaron, do you want to go first? I mean, I think it's broadly a statement of where, you know, this government, priorities and principles are, you know, not to harp on the cuts, but I really do think the details of that are going to matter a lot. And I think it still sort of leaves some questions about like what more, you know, needs to be done going forward in terms of, you know, just sort of meeting this moment.

You know, they use the word generational all over this budget and it was all over the prepared text of the finance minister's speech. And we must use this fiscal power to make generational investment because we, believe in Canada. I think that's an interesting rallying cry. I think it speaks to the moment. I think it tries to explain a lot of what they're doing. But I think, you know, I think ultimately, you know, one budget isn't going to respond to the kind of change we've seen in the world over the last 12 months. And so I'm interested to see where the debate goes now in terms of what more they

need to do and perhaps, you know, do they need to make slightly different decisions in some areas? Do you think that this budget comes close to the definition of a generational budget? Or would you put it closer to a generic one? You know, I was just looking at Andrew Coins column in the Globe and Mail and the headline was basically like, this is it? That's all you've got? I just Like, how are you thinking about that? Yeah, I think it's interesting because because they had used these big words like transformation. I think there was an expectation that, you know, we were all going to go into the lockup today and they were going to show us a budget. We were all going to be like blown

away by the stuff they were doing. And I don't. So, you know, it doesn't quite live up to like, oh, wow, I can't believe what I just read. But, you know, it does start to move some big pieces around. And it does start to make some big, uh, investments in things. And, you know, it does run a higher deficit and project higher deficits for the next, you know, higher than previously projected deficits over the next few years. You know, the thing about calling it generational is like, you kind of have to wait a generation to know whether it had that big of an impact. I think it's hard to judge it in this very moment, how big the impact of this is going to be. David, do you want to add anything there or? I mean, I think, I think what I also hear in this budget, and in some of the commentary, I think, is around execution. And so there is a piece of me that wonders of this government is skeptical of its ability to actually implement what we would feel is a generational transformational budget, right? So in many ways, I think if you compare this budget to what the last three or four Trudeau budgets

have been, it is, in a sense, generational in that it is, it is tilting the government's focus away from fairness and equity and using government operational funding to level the playing field, to one that is very much driven to wealth creation, prosperity, you know, resilience, defense spending and the like. And so, you know, I think maybe this is as transformational as they can be without, again, promising more than they can deliver, right? I wonder if they are being, you know, purposely muted in the ambition, in part because they're not convinced that they can do it all, all that they need to do in a short period of time. And so we'll see. But that's one way to read this. Think about it. Like, the federal government is a massive

organization that they are trying to shift its orientation away from filling in gaps to creating, you know, new, basically building up instead of filling in holes. Just to jump in, like, I think David put his finger on a really good, an important issue there, which is that the previous government, the Trudeau government, you know, the knock on it was they were all announcement and no follow through. And I think the Carney government is advertising itself as we are the government that follows through on stuff. We're going to get stuff done fast. We're going to get stuff, you know, built, you know, speeds, you know, unimaginable,

all those things that Mark Carney has said, you know, whatever dollar figure you want to put on. I think that's sort of the stuff that's really going to matter now is, are people going to see tangible signs of things being built and done more than what's the size of the deficit? David, I know you're going to do a bunch of polling in the coming days. When you see this budget, what are you kind of most excited to ask people about? Yeah, maybe it's more nerdy. But I like to know one thing, what do people, if anything, remember about the next few days? because it's not just today, it will be, you know, tomorrow and the rest of the week as this filters out. So, you know, those most interested will pay attention today. And then it's going to kind of

spill over. Similarly, it's like the dinner table test. Like, what are people only talking about Eurovision or are they talking about the deficit? Is this transformational? Is this, you know, big spending? So, you know, I remember the 2021 budget, the government was very good at making it about child care. Like when you ask Canadians, what is that budget about? Child care was what people repeated. And so this is a really complex budget. There's a ton of stuff in it. So I'm not sure what people are left with. But I think one of the things I'm watching for is we've seen in our research and we've talked about it, you know, in the lead up to the election and then on election night, the divide in the country between, you know, those who kind of have something versus those who

have nothing to lose. And I think this is a budget that speaks to a part of the country that has something to lose and wants protection. And I think there's going to be a subset of the country. Many of those listening right now, Jamie, who are wondering, like, this seems like it's going to take forever. And I need help today. And so it meets maybe the moment in terms of the urgency of reorienting Canada's economy to the new world order, but maybe not the urgency that people are feeling in their day-to-day lives with both their immediate job prospects, paying the rent, paying for food, and all the other things that they tell us in our surveys are still top of mind.

I do want to get the reactions from the opposition parties here, but. Oh, my God, we have got to talk about the former conservative MP, Chris Dantrema, announced that he was no longer with the conservative caucus, and he's crossed the floor to the liberals, which is really stunning. So, you know, he'll have to go back to the supporters in his writing that dug deep into their own pockets to support his campaign and explain why he took their precious time and resources and then turned their back on them just a few months later. Might it be that he doesn't think your party's solutions are the correct ones now? You know, he ran on them in the platform. He saw our platform. Aaron, do you know any more about what happened here? Are there more that might be coming?

Yeah, I think that's sort of the million dollar question at the moment. I mean, so what we know really is the statements that are come out, which is that he, you know, went to the conservative leader and said he wanted to leave the caucus and was going to go sit as a liberal. There was a report in Politico actually just about a half hour before the budget was presented that said he was considering it.

And I would dare say that once you are publicly considering crossing the floor, you're kind of obligated to do it. And so I think, you know, there have been, this city, this town has been wild with rumors of potential floor crossings for the past week or so.

and then it seemed to have died down and now it's actually happened. So there's some, you know, very simple House of Commons math. The Liberals are three were three seats short of a majority in the House of Commons. They're now two seats short. And so the question becomes, you know, okay, is this the first? Are we going to start seeing more of these and can the liberals kind of get over that majority threshold? And then, you know, the other question is for Pierre Polyev about his leadership and about whether there is, you know, some degree of unhappiness about where he's taking the party.

Yeah. Oh, it's going to be really interesting the next couple of days. In terms of where the parties are right now, jump in, correct me, if I heard any of this wrong. But here's what I heard today, Elizabeth May. No way she is supporting this budget as is. There's no way that we can, as Greens, vote yes on this budget. But I want to emphasize there are several days in which this budget can be negotiated. and amended before it goes to a vote. And that's something that doesn't get discussed much. I am surprised that Mr. Carney has not reached out

or that more of his ministers haven't reached out to say, what would it take to get... I imagine it's largely because of the oil and gas emissions caps. The block, they're meeting tonight, but they don't see how they can support it. I hardly see how, after having met with our caucus tonight, we could vote in favor of this budget. Because the liberals didn't meet enough of their demands,

the conservatives also seem like they're giving a hard no. A conservative leader, Pierre Paulyev posted Mark Hardy and the liberals call this progress. We call it what it is, decline. And on behalf of all the Canadians who can no longer afford to eat, heat, or house themselves because of liberal inflation, we conservatives cannot support this costly liberal.

budget. And the NDP says they're going to read it and take a look. And as we talked about on Monday with Rosie, it's really unclear what the NDP might do here and whether or not they'll even vote as a block. I can tell you that New Democrats are going to take the time to study this budget. We're going to consult with stakeholders. We're going to talk to Canadians, particularly working Canadians, and review this budget to see if this budget passes our lens of whether it works for working Canadians. Do you think that's a pretty fair read on that situation, Aaron? Yeah, I think that's where we're at.

You know, the conservatives had already sort of staked out their position, actually, you know, kind of connected to the point. David was making a moment ago about, you know, young people and saying, this is a budget that wasn't going to do enough for young people and was going to ask them to make sacrifices. I think it was always a very big long shot that they were going to support this budget. I think it really does come down to those MDPMPs and whether maybe some of them vote for it, maybe some of them vote against, maybe some of them abstain, you know, with this

floor crossing, the math at least got just a slightly bit easier for the liberals. And they have until what to figure this out and to vote on this budget? There has to be four days of debate on the budget policy of the government. And then there would be a vote, but the MPs are actually off next week for Remembrance Day. So you're looking at probably November 17th, November 18th for sort of the exciting vote, whether or not the House would approve the government's budgetary policy. Okay. Guys, this is great. It's always good to have you. Thank you. Thank you. Exchange. All right. That is all for Budget Day. Thanks, everybody. We'll talk to you tomorrow.