Business leaders are eagerly anticipating Prime Minister Mark Carney’s upcoming federal budget, which is expected to address key issues such as the investment environment, tax relief, and access to capital. They express hopes that the budget will strike a balance between fiscal restraint and necessary support to foster growth within the economy, especially in light of challenges posed by U.S. tariffs.
The Business Council of Canada’s senior vice-president of policy, Theo Argitis, emphasizes the significance of initiatives aimed at attracting private sector investments back into the economy. As capital becomes increasingly scarce worldwide, he argues that measures to reduce uncertainty for businesses are crucial in creating a favorable investment landscape.
The federal Liberal government is set to present the budget on November 4, 2025. Carney has framed the budget as one that needs to address cost-cutting while simultaneously investing in the economy. The parliamentary budget officer has projected a substantial increase in the annual deficit to $68.5 billion for this year, up from $51.7 billion the previous year.
Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), is particularly interested in the tariff relief measures that will be included in the budget. Despite some targeted government initiatives, he stresses that small businesses are seeking comprehensive support rather than fragmented subsidy programs. Kelly argues that broad-based tax and regulatory relief would yield greater economic impact compared to numerous little-known programs, which often end up benefiting bureaucratic employment rather than creating jobs in the private sector.
Moreover, Kelly points out that recent U.S. policy changes exacerbate the need for tax relief in Canada. He highlights the impact of the elimination of the de minimis exemption, which previously allowed packages valued at $800 or less to enter the U.S. without duty fees, causing additional strain on small businesses across Canada.
In the tech sector, Benjamin Bergen, president of the Council of Canadian Innovators, lists access to capital as a top priority. He urges reforms to the federal government’s Scientific Research and Experimental Development (SR&ED) tax incentive program, which he describes as cumbersome. The SR&ED program is intended to stimulate research and development by funding specific projects and providing tax incentives, and Bergen advocates for a more streamlined approach that directs funding primarily to Canadian companies rather than foreign multinationals.
Bergen also notes the growing importance of defense spending in the upcoming budget discussions, following Canada’s commitment at a NATO summit to increase defense expenditure to five percent of its annual gross domestic product by 2035. The pressing issue, according to Bergen, is how this funding will be allocated—whether it will facilitate the purchase of foreign military equipment or foster the creation of a domestic defense technology sector.
The Council of Canadian Innovators has already been consulted by the federal government regarding potential Canadian companies that can fulfill defense-related needs. This represents a significant intersection between the defense and technology sectors, particularly with emerging areas such as cybersecurity and artificial intelligence (AI) systems gaining traction.
In addition to the focus on technology and defense, the Mining Association of Canada has submitted recommendations to the Department of Finance, aiming to strengthen the mining sector by enhancing domestic supply chains and advanced manufacturing. Their proposed measures include increasing capital funding for mining projects and streamlining the regulatory process to improve timelines for establishing new mines while boosting Indigenous participation in the industry.
However, the renewed focus on the mining sector has faced criticism, with demonstrators in several major Canadian cities expressing concerns about the environmental impacts of increased mining activities, particularly regarding climate change. These protests reflect a nationwide tension between resource development and environmental stewardship.
Amidst these budget discussions, a critical factor remains the renegotiation of the Canada-United States-Mexico Agreement (CUSMA), set to be reviewed next year. Although exemptions within this agreement protect most Canadian goods from American tariffs, duties on specific sectors such as steel, aluminum, automobiles, and softwood lumber continue to negatively impact these industries.
Argitis concludes that the renegotiation of the North American trade agreement is of paramount importance, potentially overshadowing any budget items. As businesses await further developments, they remain hopeful that the upcoming budget will effectively address their pressing needs while considering the broader economic landscape.
