On the first day of November 2025, the Canadian Parliament received the first budget from Prime Minister Mark Carney's government — a document that will shape the country's direction for years to come. The budget is ambitious, controversial, and radically different from its predecessors, proclaiming that Canada needs "a new era of leadership and a new economic foundation." Yet beneath the veneer of grand aspirations lies a harsh reality: $78 billion in deficit, massive cuts to the civil service by 40,000 positions, contentious changes to immigration policy, and a bet on large capital projects as a way to pull the economy out of prolonged stagnation. For Calgary residents, this budget has very concrete consequences — from changes to the tax system to prospects for public sector employment and impacts on the energy sector.
The Big Numbers: A Major Bet on Investment, Promises of Discipline
The first shock to the eye is the deficit figure. For fiscal year 2025–26, the government is budgeting a deficit of C$78 billion. This is substantially more than what the Liberals promised during the campaign (they had promised C$42 billion). Conservatives at the time loudly criticized such spending, promising to keep the budget in much tighter constraints. The current figure is a deliberate choice by the Carney government in favor of larger borrowing and investment, even at the cost of a temporary deficit.
However, the government is trying to demonstrate fiscal discipline: a gradual reduction in the deficit is promised, down to C$65 billion the following year, then C$57 billion by 2029–30. The key promise is to balance operational (current) spending within three years. In other words, the government is claiming that the large gap is primarily due to capital investments, not the daily "living paycheck to paycheck" within the government apparatus.
Over five years, the government plans approximately C$141 billion in new spending, partially offset by cuts and other savings of C$60 billion. This balance between new spending and savings will be a critical point of discussion when Parliament votes on November 17 — that's when it will become clear whether other parties trust the government or will initiate a motion of no confidence.
A Smaller State: 40,000 Civil Service Positions Cut
One of the most tangible elements of the budget for the public — a comprehensive expenditure review. Its goal is simple: spend less on the day-to-day functioning of the state, spend more on investment and development. The government expects to save C$13 billion annually by 2028–29 through this measure, and a total of C$60 billion over five years when combined with other revenue and savings.
The most visible consequence is the reduction of the civil service. The Canadian civil service currently employs approximately 368,000 workers. By 2028–29, the government plans to reach 330,000, meaning approximately 40,000 positions will disappear. At first glance, this sounds like chaos. However, the government's official narrative presents it as natural attrition: non-renewal of temporary contracts, departmental restructuring, and elimination of redundant positions. The government frames this move as a signal to Canadians: less money for bureaucracy, more for "nation-building," for concrete projects that people will see and touch.
For Calgary residents, especially those working in the public sector or dependent on government contracts, this could mean unforeseen uncertainty. Which departments will be hit hardest by the cuts is not fully revealed in the budget. However, large services such as Revenue Canada, Treasury Board, or regional offices are expected to undergo restructuring.
Tax Strategy: "Supercharging" the Economy Through Investment
Against the backdrop of weak economic forecasts, the government proclaims the ambition to "supercharge growth" — accelerate growth and make Canada's investment environment more competitive than the United States. How? A radical reorientation of the tax system in favor of capital expenditures.
The key tool is the so-called "productivity super-deduction." Under this scheme, companies will be able to deduct capital investments more quickly and in larger amounts, effectively receiving a tax break upfront for new buildings, equipment, and technologies. In other words, if a company purchases new equipment for a million dollars, it can immediately deduct a large portion of that cost from taxable income, rather than spreading the deduction over several years.
Additionally, new rules are introduced for deducting building costs for manufacturing and processing, as well as special depreciation for equipment and buildings related to LNG (liquefied natural gas). This last point is particularly relevant to Calgary, which remains the center of Canada's energy business. LNG projects, especially on the British Columbia coast, have been delayed for years due to bureaucratic hurdles. The new tax regime is a signal to business: invest in real capital, expand production, but be assured that the tax system will be on your side.
For Calgary residents working in the energy sector, this means potential expansion of investments and possibly new job opportunities. However, this will also depend on global energy prices and the geopolitical situation.
"Build, Build, Build": Infrastructure as an Engine for Change
Another central promise of Carney from his election campaign is to "build fast." The budget implements this idea through the newly launched Major Projects Office, tasked with accelerating approvals and minimizing delays.
The office receives C$214 million over five years. The priorities are two ambitious directions: critical mineral projects (lithium, cobalt, nickel for batteries) and launching construction of a high-speed rail between Toronto and Quebec City. The most interesting aspect: the government promises to shorten the construction timeline for this rail project from the planned eight years to four. This is ambitious and will require radical easing of bureaucratic procedures.
In parallel, the government allocates C$51 billion over ten years for local infrastructure: housing, roads, water and sewage systems, medical facilities. This funding will be distributed among provinces and municipalities, including Calgary. While exact amounts for the city are not disclosed in the budget at this stage, based on the content, one can expect that some of this money will go toward infrastructure improvements: public transit expansion, street repairs, modernization of water systems — projects that Calgary municipal authorities have already identified as critically necessary.
Immigration: Sharp Braking of Temporary Residents
One of the most controversial sections of the budget is the reformatting of immigration policy. Under the banner of "taking control of the system," which, according to the government, puts pressure on housing, medical services, and other social spheres, Carney announces a radical reduction in temporary immigration.
The figures are striking:
- The target for temporary residents drops from 673,650 in 2025 to 385,000 in 2026. This is a reduction of almost half.
- The number of new permanent residents will be maintained at 380,000 per year in 2026–28, slightly lower than 395,000 in 2025.
However, the government also promises a one-time humanitarian measure: up to 33,000 work permit holders in 2026–27 could be fast-tracked to permanent resident status. The argument is straightforward: these people are already working, paying taxes, and "building the economy," so it makes sense to give them permanent status rather than leaving them in uncertainty.
For Ukrainians in Calgary who arrived under the CUAET program or on a work permit, this is a mixed signal. On the one hand, reducing the overall number of temporary residents means less competition on the job market. On the other hand, it also means that employers will find it more difficult to hire foreign workers if Canadian candidates are unavailable — which could potentially make Ukrainians more valuable to local companies.
To compensate for the labor shortage, the government:
- creates a fund for recognizing foreign qualifications, so provinces can recognize diplomas and credentials more quickly and transparently;
- launches a strategy to attract international talent, including a thousand highly skilled researchers on special, accelerated investment terms.
This means that even with reduced overall immigration, highly qualified specialists — engineers, technologists, scientists — remain in focus for the federal government. For Calgary residents with higher education and specialized skills, the doors remain open.
Defense: $81.8 Billion as a "Blueprint for Sovereignty"
The Carney budget proclaims a historic increase in defense spending. Over five years, C$81.8 billion is allocated to defense, of which approximately C$72 billion is new money. This follows campaign promises to "strengthen Canadian sovereignty in the face of more aggressive geopolitics."
The distribution of spending:
- over C$20 billion — for recruitment and retention of members of the Canadian Armed Forces (CAF);
- another C$19 billion — for maintaining capabilities and defense infrastructure;
- billions — for the Communications Security Establishment (CSE) for modernizing digital infrastructure and strengthening cyber defense.
The government presents this bet as a "blueprint" for sovereignty: from protecting the Arctic (as global warming makes new shipping routes and resources accessible to Russia and China) to cyberspace, where Canada remains vulnerable to state and non-state cyber attacks.
For Calgary, where numerous defense contractors and research centers are based, this means potential for expanding work and investment in the defense industry.
Energy Policy: The Emissions Cap Might Quietly Disappear
Even before the budget was presented, politicians and experts were hotly debating: what will happen to the emissions cap in the oil and gas sector — an initiative from previous governments that set a "ceiling" on greenhouse gas emissions for energy companies?
In the budget document, a hint was sounded, which observers of the text called a "quiet death of regulation":
- if carbon markets work effectively, methane rules become stricter, and technologies such as CCS (carbon capture and storage) gain wide implementation and show results, then "the need for an emissions ceiling will disappear."
Essentially, the government is signaling: a formal "cap" on emissions may not technically come into effect if other tools show results. This is a signal to the energy sector, including companies in Calgary: the government is prepared to provide more flexible and market-oriented regulation than strict quantitative limits.
For Canadian oil and gas companies, this is potentially good news, allowing them to plan investments more flexibly. However, for environmental activists, it's a signal that the federal government is ready to compromise on environmental goals in favor of economic growth and energy security.
Culture and Media: More Money for CBC and the Eurovision Dream
In contrast to massive cuts to the civil service, the budget allocates C$150 million for CBC/Radio-Canada to "strengthen its public service mandate" and better meet the needs of Canadians. The government also promises to consider updating the broadcaster's mandate, with an emphasis on independence — a signal that the federal level wants to ensure the national broadcaster remains truly public, not an instrument of any party's political hegemony.
And an unexpected but symbolic touch: Ottawa, together with CBC/Radio-Canada, is exploring the possibility of Canada's participation in the Eurovision competition. While this is just an idea on paper, it carries a clear signal to fans: the government considers popular culture and soft power as tools of national branding and influence. In a global context where Canada competes with the United States, France, and Britain for cultural heritage, such moves carry symbolic significance.
Tax Changes: Elimination of Two Notable Taxes
Finally, the budget announces the repeal of two taxes that have been controversial:
1. Underused Housing Tax — a 1% tax on ownership of "empty" or "underutilized" housing that was in effect since 2022. The idea was simple: boost housing supply by forcing owners to rent out or sell. However, implementation proved difficult and administratively costly, as it's hard to define what counts as "underutilized."
2. Luxury Tax — a tax on aircraft worth over C$100,000 and vessels worth more than C$250,000. The goal was fair — burden on the wealthiest. However, implementation proved sensitive for high-income Canadians, especially in coastal provinces where aviation and boating are culturally important.
The government's argument for repeal: it should simplify the tax system and reduce administrative costs for both taxpayers and the state. However, this move also potentially means that higher-income individuals will receive easier treatment.
The Voice of International Analysts: A Major Bet on Capitalization
Reuters characterized this budget as: "This is a budget with a very large deficit, but with a clear bet on capital investments (C$280 billion) and structural cuts (C$60 billion)." Analysts note that Carney's strategy is risky. If large borrowing and massive investments translate into real projects, new jobs, and tangible growth, the budget may be remembered as a turning point. If projects are delayed, the deficit remains high, and problems persist, criticism will be harsh.
Next Steps: Parliamentary Vote on November 17
It's important to understand that the budget is not law until Parliament approves it. On November 17, the vote awaits. At this stage, the question is whether other parties (the Conservative Party, NDP, Bloc Québécois) will vote for the budget or initiate a motion of no confidence, which would trigger an early election.
The Conservative Party, led by Pierre Poilievre, is already criticizing the budget for its large deficit and arguing it's a "wasteful spending" of taxpayers' money. The NDP may have a contradictory position: they might support large social investments but criticize public sector cuts and repeal of taxes on the wealthy. The Bloc Québécois, as usual, will observe whether the budget is favorable enough to the province.
Conclusion: Ambition, Risk, and Canada's Future
Mark Carney's 2025 budget is not an ordinary fiscal document. It's a manifesto with a desire to restart the economy after years of stagnation, boost competitiveness against the United States and China, and bring order to the public apparatus. At the same time, it's a budget that makes controversial bets: a large deficit in hopes that projects will succeed; cuts to the civil service in hope that it will lead to efficiency; reduced immigration in belief that it will ease pressure on social services.
For Calgary residents, the specific consequences will depend on how the large infrastructure bet is implemented, how the energy sector adapts to new tax conditions, and how the local job market adjusts to immigration policy changes. But one thing is clear: the coming years will bring significant changes. The question remains — will these changes benefit Canada and its citizens, or will they turn out to be a disappointment that people will recount on the eve of the next election.
The vote on November 17 will be the first test of whether Parliament trusts Mark Carney's vision for Canada.