Front Burner - Mark Carney’s high-stakes first budget

Episode Date: November 3, 2025

On Tuesday, Canada’s Minister of Finance will announce his much anticipated budget.It’s Mark Carney’s first as Prime Minister, and comes at a time of instability and uncertainty for the country. Trade negotiations with the U.S. are on hiatus, and the pressure’s on to spark economic growth while trimming spending and making life more affordable for Canadians.Carney’s minority government also needs support from other parties for the budget to pass. And if it doesn’t, we could be looking at another election.Our guest is Rosemary Barton, CBC’s chief political correspondent.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

It's sneaky, underhanded. They don't want us to talk about it. But in Canada, beer tax increases are automatic. They go up automatically, yes. Even though at 46%, Canada already imposes the highest beer taxes of any country in the G7. Don't they realize automatic is not democratic? To help stop it, go to hereforbear.ca. And ask yourself, why does the best beer nation have the worst beer taxation?

This is a CBC podcast. Hey, everybody. It's Jamie. I am here with my colleague, Rosie Barton, CBC's chief political correspondent. Hey, Rosie. Hey, Jamie. It's great to have you. As we all continue to be heartbroken about that game seven loss. Oh.

I'm not sure I'm ready to talk about it, but big week over here on the politics front. The much-anticipated budget comes down on Tuesday. Both Prime Minister Kearney and his finance minister, Francois Filippe Champagne, have called this a generational one, where we're expecting a big deficit and deep cuts. It comes at a time of great instability. Trade negotiations with the U.S. are on hiatus right now. There's a lot of pressure to grow the economy while cutting spending and to make life more affordable for Canadians.

On top of all of this, Kearney's minority government also needs support from other parties for the budget to pass. And if it doesn't, we could be looking at another election. All right. Let's get into it. We are going to do a full episode on the budget on Tuesday, a night with Aaron Wary and David Coletto. So please do you listen for that on Wednesday. but I do want to set the stage today. And so, Rosie, earlier this month, Carney gave this big speech to prepare Canadians for this budget.

At the core of our strategy will be to catalyze unprecedented investments in Canada over the next five years. That's what's going to come above and beyond these projects. He hit, in my estimation, many of the same notes that we've heard since the election and during the election, a need for non-American allies and markets, self-reliance, spending that stays in Canada. As for specific promises of what the budget would contain, there weren't a ton. Has this budget taken more shape since that kind of prime time address? Hard to say. And let me start by saying, I'm happy to distract you from your Blue Jays Depression

with some good old politics. And setting the stage for, yeah, what is a, you know, not a world series thing, but it is a determinant moment for Mark Carney and the government. What's interesting about this government so far is that they haven't leaked very much from this budget. Typically, governments do do that, but we do have a couple of things that I think I can point to that have either been announced or to keep an eye on. First of all, the other thing about this budget is it's not just going to be about money. It's also going to include a new immigration plan. It's going to include a climate competitiveness strategy.

Our strategy will recognize that in today's global economy, we have to be. to build sustainably. It's not just a moral duty. It's also an economic imperative. It is a moral duty, but it's an economic imperative. And obviously those have economic impacts, but it's kind of unusual that they would be inside a budget. There are a few bits and pieces that the government has announced in the past couple of weeks. Personal support workers tax credit is one, a foreign credential recognition fund. They made the National Food Program, a permanent thing. They renewed the Canada's strong pass for the holidays, that kind of stuff. But no big, big ticket measure that you would point to to say, ah, now I understand what this budget

is going to be about. The Prime Minister did talk about sacrifices. We won't transform our economy easily or in a few months. It will take some sacrifices and it will take some time. Our government will work relentlessly to cut waste and drive efficiencies. And when we have to make difficult choices, we will be thoughtful, we'll be transparent, and will be fair. Do we have any sense of what that means? I don't think we have a clear sense, but I can speculate a little bit. You know, he said that word and he said it to a group of university students, which the conservatives has seized on. But instead of saying, given that things are so bad, we liberals are going to reverse course, on all of the policies of inflation,

of blocking home building, of standing in the way of resource projects. Instead of that, he asked young people to make more sacrifices. This was the sacrifice speech to Canadian youth. I don't think he was speaking, though, just to young people. I think he was speaking to Canadians. One of the things that he hinted at

was not that specific services would get cut, though I think we should expect that, but also potentially that services might get frozen or not further expanded. Pharmacare would be one that I would watch for on Tuesday. But he also talked about time, right? And the fact that the kinds of changes he's trying to put in place are not going to happen overnight. I think that also kind of speaks to sacrifices and how long people will have to wait to see an improvement in their personal situation and in the economy writ large. But there will be cuts. Like it won't just be attrition and it won't just be

job cuts. There are some things that are going to fall by the wayside necessarily because they are not going to be a priority of the government. And those things, well, we don't know them yet, will impact some Canadians. And that's the other piece that we'll have to watch for. And also jobs, right, in the public service. I know that the public service is bracing for lots of spending cuts here. And just like what is the vibe in Ottawa ahead of this? Yeah. I mean, we're looking at, I think it's 7.5% in the first year and then another in the second. So that is getting rid of a fair number of jobs. But, you know, the prime minister makes the point that the size of government has also ballooned over the previous 10 years under Justin Trudeau.

So you could argue that the government got too big anyway and that this is a necessary adjustment to what is needed. The other thing, and I know you've talked about this too, that they're looking for are ways for AI. to help deliver some services to Canadians. So there may be some redundancies there. There is nervousness for sure because Ottawa has the largest number of those public sector jobs and they are well-paid jobs. You know, when you talk to the NDP, that's one of the issues that they are most concerned about that at a time right now, cutting jobs doesn't make a lot of sense. But that is definitely going to happen. So the budget, for sure, we're going to see cuts, but also spending, right?

Military spending, for example, measures to support industries, hit hard by tariffs. And as soon as the budget comes out, I imagine everyone's going to be looking at that deficit number, right? And just to help set the stage for everyone here, what do you think would be helpful for people to know before they see that number? I mean, I think it's important to remember a few things. that a deficit is not the only measure of how an economy is faring, right? Debt to GDP ratio is another important one because it shows how big the economy is expanding, how quickly it's expanding compared to its population. And that also is important.

And if this government in particular thinks that it is necessary to spend public money in order to spur investment and to really address what I think everyone can agree is a crisis moment in the country's history or a hinge moment, as the prime minister calls it, perhaps that money does need to be spent. Conservatives don't think so, but certainly that seems to be what this government believes will help in this moment. So we're talking big numbers, right? We're talking 70 to 100 billion dollars of deficit spending. Those are the kinds of numbers that you see during a pandemic, during a recession, when you actually need to support Canadians and the economy. So what the government will have to try and explain is why it's spending at that level

and that rate at a time when there is no recession. You know, growth is meager, but it's happening. There is certainly no global pandemic. So what is it that the government thinks it will get out of that kind of spending? Because the conservatives would say, well, why are you not trying to attract money from the private sector instead of using taxpayers' dollars to do this? And one of the other things that will be different about this budget is the way it looks, right? There's one part of the budget that will be operational. And that part, the prime minister seems to say, will be not as problematic. It's the other side of the ledger, the capital expenditure part of the budget where you're going to see those big numbers that they are going to have to justify as being needed because of this moment that we are in. Caused by Donald Trump, certainly, but also now really impacting the entire world. It's sneaky, underhanded. They don't want us to talk about it. But in Canada, beer tax increases are automatic. They go up automatically. Yes.

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So just a reminder, budgets are confidence votes, which means that if they get voted down, the government can fall, triggering an election. And we are in a minority parliament situation. The liberals have 169 seats. They need three more seats to pass it. About a week after Kearney's speech, the Liberal House leader said, we don't have the votes. The opposition parties will have to determine whether the differences between us are sufficiently large to cause us. the Canadians to go to the polls. What did you make of the House Theater saying we don't have the vote?

How do you read that? Well, at this stage, you can ask any party, and they don't know where the votes are and where they're coming from. I think it is always interesting when the government says that, though. A government in a minority position, its job, if it wants to survive, is to seek the support. It's not just to, you know, show up and cross your fingers that it's going to suddenly arrive. So I saw that as fair amount of posturing from the, liberal house leader, and frankly, maybe some fearmongering tactics to try and see how far he could

push the opposition parties into thinking that this could really happen and sort of just freak them out, frankly. I'm not sure if that's worked, but I think that was the intent. It is also, you know, the opposition party's decision, though, as well. They have all the conservatives and the Black Quebequa in particular put very specific demands on the table from the government with almost no response, frankly. So if they feel like because they didn't get anything met there, then they also get to make a decision about an election. What parties like to do in minority governments, though, is play the blame game so that nobody

is held responsible if something happens, if we end up in an election. It's clear that the member opposite is driving for a Christmas election, and I really hope that's not true because Canadians are counting on us to pass this budget to make the school food program permanent. They want their budget passed. They have to make it an affordable budget so that there's affordable food and affordable quality of life

for the Canadian people. It's my experience that whoever caused the election is usually a two-day story and then people move on because that's not going to be the issue, right? Canadians will ask themselves why they're relitigating something

that hasn't changed substantially over six or seven months. Yes. I feel like right now I want to talk to you about what certain parties might want here, whether they might want an election. But I do feel pretty confident saying that voters probably don't want to. No one I know.

No one I know. Yeah. I have literally talked to no voter that wants to go to the polls again. But let's do the block first. Have they gotten anything or are there signals that the liberals are going to do anything to kind of appease this list of demands that they made, which was quite long. Yeah. Yeah.

Yeah, I think there were 18 in advance total, but there were six that they were very committed to, including increasing old age security, making sure that health transfers are increased to provinces and a few others. They will face Canadians and Quebecers with an unbelievable deficit, which looks like madness. I do not. I cannot see how we accord support a budget, which is first based on some taxes, reductions, electoral gifts. and some fantasies in many regards. I don't think that they're going to get those things. They say that they are not that costly and the government could do them. But at the same time, those are not the things

that the government was elected on. So that would also sort of create some complications. They are also very specifically things that would, of course, benefit Quebec. And yes, there might be benefits writ large, but they are specific Quebec asks. There has not been, a lot of back and forth there. And you might remember that the block leader after the election

said he was willing to give the government sort of a year of free space to do what they needed to do given the moment we're in. But because of the lack of consultation and talks, he decided in September he was walking away from that position. So I don't think that the block is the place where this is going to happen. There was one measure that the government announced last week to shut down tax evasion with trucking companies, which is something that was important to the block. They did say that they were going to do that. But that's, frankly, I don't think going to be enough. They will look at the budget, they say, and they will make a decision. That caucus will vote altogether, and they say that there will not be a choice to abstain. That's

not how the block is going to roll on this one. The idea that he's stepping away from that, his earlier comments about giving the liberals some room here, because they haven't been like working with him or working with them. Are there any other reasons why they might pull a 180 here that would have to do with like what's happening provincially in Quebec? For sure. You know, they are very cognizant of the fact that there is a Quebec provincial election that should happen in October 2026. And there is also the reality that the CAQ or the CAQ, the current government is not faring well. And the Patsy Kepiqua has had a bit of a resurgence in Quebec. It is not always preferred in Quebec to have a Parti-Chebecois government and an extremely

strong bloc Quebecois, because then you've got sort of two places where you're having the same battle, if you were. But more importantly, the Parti-Chibeco will start a conversation around a referendum again. Each year, we send to Ottawa $82 billion of our money, but what do we get in return? Hardly any significant direct services for our people. On top of that, Ottawa oversteps in our areas of jurisdiction and imposes an immigration policy that far exceeds our capacity to integrate newcomers in terms of housing, the French language,

and delivering quality services to everyone. What if I told you we could keep these $82 billion here in Quebec? And that makes things very complicated for the bloc to try to elicit anything from a federal government. So I. Francois Blasier is very aware of all those different bits of time.

timing. So, you know, does that mean he wants an election? No, but does it mean that he has to make sure there isn't one next fall? I think that's fair to say, yes. Let's do the NDP now. I know that they have said that they will not vote for an austerity budget. Kearney's kind of backed off that framing of the of the budget, though he did say it out loud. a while ago, so it's out there, but they also have no leader, right? And their party is in Chambles after getting wiped out in the last election. Is there a world in which they are thinking of the possibility that an election might better their current circumstances? Maybe they regain official party status if they can add a few seats. Like, is it possible that they

abstain or don't vote for this? Yeah, I mean, listen, there's seven MPs. They would need five more to get official party status. It is not a caucus, even though it's so small, that is incredibly united, incredibly on the same page with everything that it's doing, which maybe is sort of normal as the party looks to redefine itself and reshape itself. So yeah, there are people in that caucus and outside the caucus, NDP supporters who believe that, you know, an election wouldn't be the worst thing. They'd keep most of their seats and maybe they'd find a way to add them on. But the reality is, is that they probably don't want an election. with an interim leader. They are in the midst of a leadership race. And as always, the NDP

has some serious financial challenges. So it wouldn't be setting them up for any sort of great success. I think based on the conversations that I've had and talking to Don Davies, the interim leader, abstaining is very possible. The liberals seem to be blaming the opposition if there's an election. And frankly, I would turn that around and say any election that's coming, which I agree Canadians don't really want or need at this point is entirely up to Mr. Carney because he holds the pen. He draft the budget and they have not invited other parties in to really craft the budget in a way that I think they should have in a minority situation. So they run the risk of not earning our support. And listen, that's not a lot of people that don't have to abstain. It's

just a couple. And I think that there's a way to explain that to voters for the NDP that is perhaps much easier than for the block or obviously the conservatives. You know, if we're going to look to the NDP as a possible place for where the liberals would find their votes, certainly I think it's fair to say that the conservatives are the least likely place where they would find those votes. And I know that you talk to conservative leader Pierre Pahliav about this. And what did he have to say about it? Yeah, I mean, I would say they're the least likely. First, let's just talk about the asks for the conservatives. They would like the deficit to stay at $42 billion or below. It's not going to do that. And that would

necessitate cuts on a scale unlike anything Canadians have seen since the mid-90s. He also wants the government, for instance, to get rid of the industrial carbon tax. I came with some very collaborative ideas. And I asked, why isn't the government at least considering them? I've said, let's bring down the cost of food by getting rid of the industrial carbon tax on farmers and the people who feed us. Let's get rid of the food. That is not something the government is going to do either, though they probably will alter things like the hard caps on emissions. So just given those two examples, I don't see how the conservative leader and his caucus could turn around and vote for this budget. But in a political

way as well, it doesn't make a lot of sense, right? If you line yourself up as the prime minister in waiting, all you've done is criticize everything that Carney's done for weeks and weeks and weeks. It would be very strange for the conservatives to support this budget, particularly because the leader himself is facing a leadership review in January. And he needs to show that he has the courage and the strength to still take on the liberal leader in case there is an election anytime after that review too. Do you think he actually does want an election right now? Because when it comes to leaders, Pahliav is still less popular than Carney,

even though polling shows that the two parties are kind of tied right now, right? And he's also just come off quite a bit of damage control after accusing the RCMP of covering up for Justice Trudeau so that he could avoid criminal prosecution. Many of the scandals of the Trudeau era

should have been involved in jail time. I mean, Trudeau broke the criminal code when he took a free vacation from someone with whom he had government business. And then again, he probably violated the criminal code and the S&C Labelan scandal. The leadership of the RCMP is frankly just despicable when it comes to enforcing laws against the liberal government. How do you think they're actually thinking about that kind of behind the scenes right now? Yeah, for sure, he is, he remains a drag on the conservative party.

His popularity is still not good. And it's unclear to me what exactly they're doing to turn that around. or how aware they are that that means to be turned around. But put that aside, there are not conservatives clamoring for an election right now either. Many of them believe that this is not the moment. We are still facing largely the same set of election issues that we were back in the spring. And we are still dealing with a prime minister, a liberal leader who has an impressive resume in dealing with these things. There's also another part of that, Jamie, and that is,

the longer you leave Mark Carney to try and do this job, the better the chances are that you actually improve the situation for the conservatives. Because as we've already seen, some of the shine has worn off the prime minister. He hasn't made any progress with Donald Trump. And he hasn't had any success on that front. So the longer they let the liberal leader sit there in government, the more likely it is that Canadians start to question how good this guy really is. Now, it could go the other way, too. But the chances that people become more critical is higher. And I think the conservatives are well aware of that, that the time is probably on their side.

And the last party that we haven't talked about is the liberals themselves, right? Do you think that there's any appetite for an election or any optimism about its potential outcome? Let me put this question another way. Do you think they really care if the budget passes or not? Could they see this also as an opportunity to go for that majority that they didn't get the last time around and that they want? I do think they care that the budget passes. I think that this is a prime minister, as you know, with a big, big ambition and big agenda. And in order to get some of those pieces moving, they need to put this budget forward and start really showing and demonstrating results. The Prime Minister himself was asked this when he was in Asia and he said he would be willing to fight

an election because he's always ready to fight the right fight. He believes that this is the budget for the right moment. I am 100% confident that this budget is the right budget for this country. This is not a game. You know, this is a critical moment in the global economy or it's an important moment in the global economy. It's a critical moment for our country. Do I think that there are liberals in those ranks who wouldn't be mad to fight an election against a leader that continues to not be the most attractive to Canadians. Do they see a window there? You bet. I don't think it is the first play, though. I think the first play is to keep doing the work. And I think that things have not only not changed since the last election, you could argue they've maybe gotten

worse. And I don't know that this prime minister and this government is going to be able to solve them, but it is going to take some time. And so I'm not sure that liberals would be comfortable going into another election and then having, you know, maybe the same outcome, maybe a better outcome, maybe a worse one, and then be responsible for the fact that the country has not resolved any of these huge challenges standing our way. Final question for you. And I'm going to try really hard to craft it in a way that doesn't land on what do you think's going to happen. But it's going to be a version of that. Fred DeLoree, former Conservative Party National Campaign Manager, wrote a piece last week that I'm sure you've seen. It was titled,

We Are Headed to an Election. His argument was that as we have talked about, every party does have something to potentially gain here by voting down the budget, the NDP, the Block, and the conservatives. Again, not going to ask you to predict anything. But is DeLore's to? take on this like a minority opinion among the people who are pretty in the know in Ottawa. Fred DeLore is a really smart person. He's a very skilled campaign manager. And I listen to him and many other people and their thoughts. But I did read that piece, line and battered around 6.30 in the morning. And my stomach, like, dropped into my feet. That was my reaction. But that said, I don't think that that is where we're headed. I do think that sanity will prevail,

and here's why I say it's sanity. Canadians, I am not sure, as you and I just have said, I'm not sure they have an appetite for an election seven months later over the holiday period in winter. Whoever is going to make the decision that they do want that, and that is something Canadians will want, is going to have to explain why that is. So could we end up there? Yes, that's what minority governments lead us to, and that's what's so wonderful about them. But I don't think, based on, not on my thinking, but based on all the people that I've spoken to in the last couple of weeks, I don't think that's where we're going to end up. Rosie, thank you very much for this.

You have cheered me up a little bit. Oh, that's good. I'm still very, I'm very sad. They're a great team, though. They did, they did make us proud. But this has chirpia. I do love talking to you. Thank you.

Thanks, Jamie. All right, that is all for today. I'm Jamie Poisson. Thanks so much for listening and talk to you tomorrow. For more CBC podcasts, go to cBC.ca.ca slash podcasts.