Zimbabwe News Update
bbc
7 min read
Canadian Prime Minister Mark Carney has introduced his first federal budget – a blueprint for how he plans to deliver on his promise to make Canada’s economy the strongest in the G7.The ambitious plan, seen as a key test of the new leader and former central banker, is as much a political document as a spending blueprint.It warns that Canada is in an era of “significant change” not seen since the fall of the Berlin Wall, which is underscored by its rapidly shifting relationship with the US, once the country’s closest ally.”There’s some headwinds on the horizon,” Finance Minister François-Philippe Champagne told reporters in Ottawa on Tuesday. “That’s why we need a strong response.”Here are six takeaways from the spending plan.
The budget includes billions of dollars in spending that could balloon Canada’s deficit to C$78.3bn (£42.6bn) – the second biggest on record.Carney and Finance Minister Champagne have defended the massive spending plan, which will total C$280bn, as an investment to help boost Canada’s global competitiveness and argued that a strategic injection of funds will attract C$1tn in investment back to Canada in the next five years.It will fund a broad range of areas: highways, ports, electrical grids, digital corridors, defence, housing, and initiatives promised to boost Canada’s productivity.But Carney has also warned Canadians of necessary “sacrifices” in his plan to transform the economy, with the budget projecting C$60bn in total spending cuts in the next five years.They come in part from a reduction of 40,000 jobs in the public sector by the end of 2029 – about 10% of the workforce to be trimmed through attrition, job cuts and the widesread adoption of AI.Federal ministries could see up to 15% cuts in the coming years, expected to account for more than C$44bn in savings, according to the budget.For the first time in Canada, the fiscal plan drew distinctions between government spending by operational spending – day-to-day government spending – and capital investment, defined as funding that should help grow the economy.
Due to its proximity and close cultural ties, the US has long been Canada’s largest trading partner, with about 70% of trade moving south.In the wake of Trump’s tariffs and the uncertainty that came with them, Canada is looking to Europe and Asia, with the aim of doubling non-US exports over the next decade.Carney’s budget proposes millions in backing for businesses working to develop new export markets, includes help with legal expenses and market research.There is also a nod to growing cultural ties with Europe, like exploring Canada’s participation in the Eurovision song contest.With some firms hoping to save on trade costs by moving facilities south to the US, Carney is also proposing a raft of initiatives to make Canada more attractive.
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