Overview
- Economists say modest near-term spending means limited stimulus, increasing the likelihood the Bank of Canada will need to reduce its 2.25% policy rate further.
- Capital Economics estimates about $9 billion in net new spending across this fiscal year and next, while Bank of Montreal pegs this year’s additions at roughly $4 billion.
- The budget concentrates on multi-year defence, infrastructure and tax measures, with analysts noting larger medium-term deficits but little immediate demand support.
- The government highlights energy security and allows the Canada Infrastructure Bank to back oil and gas projects, and funds a Major Projects Office to attract private capital.
- Experts welcome the tonal shift yet cite uncertainty over potential emissions-cap conditions, industrial carbon pricing, methane rules and delayed carbon-capture timelines, even as tax-credit deadlines are extended.