By Don Newman
October 29, 2026
All federal budgets are important, but the one that Finance Minister Minister Francois-Phillipe Champagne will deliver on Thursday November 5th could be one of the most important of what is shaping up to be the Carney era.
If this budget is as complex and transformative as Carney has implied it will be, it will either accelerate and entrench his Build Canada Strong policy agenda or grind down his government in a sea of political backlash and opposition.
A year ago, some analysts were expecting the Carney government’s first budget to adopt a more revolutionary approach to fast-tracking expensive major infrastructure projects, dramatically increase defence spending and diversify Canadian economic interests through new trade agreements.
But for some, the budget was a disappointment. It closely resembled a traditional Liberal budget that former Finance Minister Chrystia Freeland might have brought down. As a former Department of Finance official and central banker for two G7 economies, perhaps Carney was compelled to temper expectations of just how revolutionary he’ll be with the country’s fiscal management.
Carney has continued to promote the changes he says are necessary after describing the ‘rupture’ in the world order that has overtaken Canada’s traditional economic and defence relations with the United States, most easily illustrated by the punishing tariffs President Donald Trump has imposed on our exports to that country.
Carney has promoted the changes with a virtually non-stop global travel schedule and a steady stream of announcements of proposed new infrastructure projects.
All this has helped his approval ratings reach unprecedented highs. But with time served in office comes political exposure, and federal budgets can serve as target ranges for opposition and special- interest backlash.
Carney met this week with First Ministers and First Nations, including the Assembly of First Nations, the leading representational group for Indigenous Canadians. They are concerned with Bill C-39, the massive legislation to fast-track projects of “national interest” approved by the government’s Major Projects Office.
A federal budget is really two documents: a financial one for international markets and a political one for domestic consumption.
The AFN is going to court to challenge what it says are infringements on treaty rights under the accelerated process, some of which predate Confederation. Predictably, environmental groups, labour unions and others who could be directly affected are also complaining.
However, this is the right time for the government to craft its new economic course. Even though the Bank of Canada this week raised its benchmark interest rate from 2.25 percent to 2.5 percent and both the federal deficit and debt-servicing costs will jump higher than predicted, this country is in a better position than many in the G-7 to cope with the economic chaos that Donald Trump has visited on the world with his tariffs, wars and relentless, epic incompetence.
Canada’s biggest problem could be competing globally for capital, hence Carney’s Canada Investment Summit last month. As a sign of the real active health of our economy, Canadian Government 10-year bonds are selling at an interest rate of 3.8 per cent. United States Government bonds have to attach an interest rate of 5 per cent or higher when they go to market.
A federal budget is really two documents: a financial one for international markets and a political one for domestic consumption.
The timing of the November budget comes as the Carney government is well into its second year. Riding high in the polls and having secured a majority mandate through floor crossings and by-elections, the Liberals are secure in Parliament until 2029. A tough budget this year, a chance to adjust and tweak in 2027, and then a pre-election budget with a few more goodies in 2028 could set the stage nicely for Carney’s re-election campaign.
For that to work, there are two conditions that will have to be met.
The first is that the government will have to get shovels in the ground, work started on nation-building projects so that the public can see progress is being made and the agenda is moving forward.
The second is that the complaints of those opposed to changes are addressed, contained, challenged and/or rebutted so they don’t become a cacophony of criticism that drags the government off- course.
Policy Columnist Don Newman is an Officer of the Order of Canada, and a lifetime member and a past president of the Canadian Parliamentary Press Gallery.
