OTTAWA — Finance Minister François-Philippe Champagne stated that the financial returns from Ottawa's capital spending plans in the upcoming fall budget will assist Canada in reducing its deficit in the coming years. He made these remarks during an interview before departing for a trip to meet with European officials to promote deeper transatlantic supply chains.

Champagne emphasized that borrowing to invest in Canada’s productive capacity is essential for achieving prosperity and economic resilience, especially amid U.S. trade disruptions. He argued that shifting the federal government’s focus from operational spending to capital investments will foster growth and yield significant returns on every dollar spent. "That’s the whole point," he said. "That’s why we said we’ll have a declining deficit over the years … that’s why you shift from expenses to investments, because that’s where you grow."

He addressed concerns raised by Jason Jacques, Ottawa’s interim parliamentary budget officer, who expressed worries about the federal government potentially lacking fiscal anchors. Fiscal anchors are metrics that help demonstrate prudent management of public finances, particularly regarding debt levels. Previous anchors have included a declining debt-to-GDP ratio and limiting the deficit to one percent of GDP.

Champagne assured that the upcoming budget, scheduled for November 4, will show a decline in the debt-to-GDP ratio and include plans to balance the operating budget within three years, as promised during the election campaign. In the absence of a budget, some fiscal analysts have suggested that the annual deficit has increased since the election, which included new spending commitments from the Liberals. The Conservative Party has urged the Liberals to disclose the deficit size as Parliament reconvenes.

Prime Minister Mark Carney has announced several significant spending initiatives since spring, including plans to meet NATO defense spending targets and new investments in infrastructure and housing. Champagne characterized the forthcoming budget as a "generational" investment, likening it to Canada’s post-World War II economic expansion. He dismissed criticisms regarding the delay in presenting the budget, stating that it was prudent to wait until November to provide a comprehensive fiscal outlook.

Champagne was set to travel to Denmark to participate in a summit with European Union finance officials. His office noted that Canada is the only non-European nation invited to this month’s Informal Meeting of EU Economy and Finance Ministers in Copenhagen. His agenda will also address Arctic security with Nordic partners and reinforce support for Ukraine amid its conflict with Russia.

He highlighted the importance of Canada’s participation in these discussions, stating, "It’s very telling that our European friends value so much the transatlantic relationship that they want Canada to be there." Champagne noted that Canada has historically been at the industrial center of North America and sees an opportunity for Canada to play a similar role in Europe.

He referenced Canada’s past contributions, such as supplying munitions and military equipment to Allied forces during the war. With rising NATO commitments and changing geopolitical dynamics, European nations are planning to increase defense spending, creating market opportunities for Canadian firms. "We were able, back then, to shift the Canadian economy for success for 50, 80 years. For me, this is the same calling we have today," he said.

Champagne acknowledged that the geopolitical landscape in 2025 differs significantly from 1945, when the United States was emerging as a global power. He noted that American protectionism has led the U.S. to focus inward, making Canada’s reliance on the U.S. market for most exports a risky strategy. He stressed the need for Canada to diversify its markets, industries, and economy to enhance resilience. "We have learned our lessons. And therefore, we need to diversify. Diversify our market, diversify our industry, diversify our economy, so that we move from dependence to resilience," he said.