OTTAWA — Canada aims to balance its operating budget within three years, according to the newly introduced Budget 2025, titled "Build Canada Strong." The budget, presented in the House of Commons, outlines plans for reduced government spending alongside significant investments in infrastructure projects designed to enhance the economy.

Finance Minister François-Philippe Champagne emphasized the need for a robust response to unprecedented changes occurring both in Canada and globally. "The speed, scope and scale of change that we’re witnessing in Canada and around the world is quite unprecedented. That’s why we need a strong response," he stated during a press conference. He added, "This is not a transformation, this is a generational shift — and we need to meet this moment with generational investment."

Budget 2025 is projected to introduce $60 billion in savings over the next five years. However, the federal debt, currently at $1.26 trillion, is expected to rise to $1.34 trillion by the 2025/26 fiscal year. The deficit is anticipated to increase from $36.3 billion in the current fiscal year to $78.3 billion in 2025/26, before decreasing to $56.6 billion by 2029/30. Champagne noted, "It’s well within the range that people had expected," and explained that a significant portion of this year's deficit is related to national defense and affordability measures for Canadians.

The budget also outlines a plan to increase capital investment as a share of the deficit from 58% in 2025/26 to 100% in the following years. To achieve this, the government aims to slow the growth of direct project spending from 8% to under 1%. This will involve modernizing and economizing federal programs, increasing public service productivity, and reducing duplication.

In a move to streamline operations, Budget 2025 proposes a 10% reduction in the federal public service, equating to approximately 40,000 positions by the end of 2028/29. This reduction will primarily occur through attrition and voluntary departures. Champagne indicated that cabinet ministers will review their spending to identify programs that are effective and those that may need to be cut.

The budget also includes Canada’s immigration plan for 2026-28, which aims to cap permanent resident admissions at 380,000 annually, a decrease of 15,000 from 2025. Temporary resident admissions are set to decline from 673,650 in 2025 to 385,000 by 2026, and further to 370,000 by 2028. This adjustment is expected to cost the government $168.2 million over four years, largely due to reduced fee revenues from temporary resident applications.

To address the needs of various sectors affected by tariffs and to support rural communities, the new immigration levels plan will consider the unique requirements of these areas. Additionally, the budget allocates $120.4 million over four years to expedite permanent residence applications for eligible refugees and $19.4 million to facilitate the transition of up to 33,000 long-term work permit holders to permanent residency starting next year.