Carney’s budget means more money for the rich and more ‘sacrifices’ for working people

Federal government budgets in Canada are more about politics than policy and they are vague on certain details but the Carney budget is clearly one designed to make the rich richer at the expense of the rest of us.

This is a budget that is further to the right than many of the proposals coming from the Conservative party. The military spending for example, is about two and half times what Pierre Poilievre proposed during the election campaign.

The big winners on budget day were fossil fuel corporations, the mining industry, and war profiteers. The losers will be workers, Indigenous people, immigrants and the natural environment.

It is a clear sign that the Liberal party remains a manager of capitalism on behalf of the 1 percent.

This isn’t particularly surprising. Carney had warned that people would have to make sacrifices to the gods of capital to stave off any decline in profitability for the bosses. But the numbers are staggering and show the distorted priorities of Prime Minister Goldman Sachs.

The numbers
The biggest increase in spending is on the military, with Carney upping yearly expenditures to $62.7 billion - a dramatic increase from the $34 billion spent by the Department of National Defence in 2024. The spending comes in different forms - huge increases in salaries for armed forces personnel, $82 billion in new defence commitments over the 5 year life cycle of the budget and a further $6.6 billion for new military industrial capacity.

This is in keeping with Carney’s promise to US President Donald Trump to increase spending to the 2% of GDP threshold. It is a clear sign that the pledges made will be backed up by cash. This should be a major concern given that Carney has also promised to up military spending to 5% of GDP by the end of the decade.

War is clearly a priority for this Liberal government.

And how will they pay for the new spending? They are planning major cuts to jobs and public services. According to Public Service Alliance of Canada National President Sharon DeSousa more than 40,000 workers are expected to lose their jobs. “These deep public service cuts will hurt workers, families and communities across Canada. People can expect longer wait times for passports, EI and child care benefits, more unanswered calls at Canada Revenue Agency, reduced public health and food safety efforts, and a government that isn’t there for ordinary people when they need it most.”

David Macdonald and Hadrian Mertins-Kirkwood, writing for the Canadian Centre for Policy Alternatives said “This budget contains a poison pill of deep funding cuts, the extent of which hasn’t been witnessed since the Harper cuts of 2011 to 2014. This is, indeed, an austerity budget, for some. For defence though, this is a historic expansion.”

Indigenous issues
Carney is not only trampling on the treaty rights of Indigenous nations, he is deliberately gutting funding that supports Indigenous people. The National Association of Friendship Centres, a network of support services for urban Indigenous people, was alarmed that there was no mention of new funding for their services. All the money allocated to the centres is expected to ‘sunset’ in 2026 leaving many without a reliable source of funding. They write “Refusal to invest in urban Indigenous communities is not a simple oversight; it is a conscious and intentional decision to ignore the needs of the vast majority of Indigenous people. Friendship Centres provide safer communities through culturally grounded programs and services that reach and connect more than one million people each year. They deliver essential capacity building in areas such as employment and training, housing, food security, childcare, youth programming, and mental health that allow for safer communities and people better equipped to participate in the economy. Without dedicated and sustainable funding, these critical services are at risk.”

Trudeau pledged in 2015 to provide safe drinking water in all Indigenous communities within five years. There were 133 boil-water advisories then. Ten years later there are still 35 boil water advisories. In Neskantaga First Nation in so-called Ontario, the water has been unsafe to drink since 1995. Which means anyone in the community under 30 years old has never had safe tap water. The Trudeau government spent around $3 billion to make that progress. If $3 billion is enough to fix or replace the infrastructure needed to lift 98 boil water advisories, then the same amount should easily fix the renaming 35. This represents around 1% of the money allocated for war spending.

More money for cops and borders
Instead of cutting the RCMP and Canada Border Services Agency along with the rest of the public service they are each getting 1000 more positions. Since the pandemic the population of Canada has grown by 10%. Before the budget the RCMP had grown at five times the rate of population growth and Canada Border Services Agency had already grown twice as fast as our population. With the additional jobs, the RCMP will have grown six times faster than our population and border guards are multiplying 2.5 times as fast as the rest of us.

Healthcare
The budget includes a new health care infrastructure fund of $5 billion over three years. Divided into 10 provinces and three territories that amounts to less than $130 million each per year. To put that in context, in BC the Burnaby Hospital redevelopment will build a 160-bed inpatient tower and cancer centre that will cost $1.73 billion. The federal health care infrastructure fund amounts to less than one tenth of a hospital per province or territory per year.

It is also less than 2% of the proposed increases to the defence budget. You could triple this amount and still spend 95% of what they plan to spend on the military. That’s how little the Liberals care about improving health care.

They have also put most of the healthcare money into building infrastructure. Some of that will be helpful but there is no new money for healthcare workers. In fact the budget will see huge cuts to our public healthcare system overall. The Canadian Health Coalition stated, “The budget makes successively deepening cuts to health, amounting to nearly $400 million a year by the end of the decade. This means losing thousands of public servants who are essential to providing national leadership for our embattled Medicare system.”

There is also no new money for expanding the Pharmacare program and there will be deep cuts to refugee heath supports.

Immigration cuts
It is highly unusual that immigration policy would be discussed in a budget document at all. This shows that the Federal Government is promoting the lies and scapegoating that blame the financial woes of working people on immigrants, in order to help justify budget cuts.

The federal budget slashes study permits for international students in half - cutting from over 305,000 to just 155,000 in 2026, then capping at 150,000 in both 2027 and 2028. The cap that had been previously announced for 2025 and 2026 was 437,000 student visas, but the actual number of students who arrived on visas over 2025 was far lower. So, this new cap is unnecessary and politically motivated to scapegoat international students for the housing crisis. And it isn’t just about fewer students arriving: it means hundreds of thousands of current students in Canada will not be able to renew their permits and will be pushed into precarity or forced to leave.

The government cut over 6,000 humanitarian placements in 2026 and more than 4,300 in 2027 from permanent residency, even though the over-all number appears unchanged. And work permit numbers remain the same, guaranteeing a steady supply of temporary foreign workers with fewer paths to permanent residency.

And According to the Migrant Rights Network, “Budget 2025 explicitly signals devastating cuts to refugee healthcare — adding co-pays for essential medications, dental care, and supplemental health services — buried inside a $600-million IRCC austerity package.”

And yet the budget puts $2 billion into the Canada Border Services Agency and hires a thousand more border guards while cutting 3,300 jobs at Immigration, Refugee and Citizenship Canada.

Environment
The budget also includes significant cuts to environmental programs, eliminating the tree planting grants, a $1.3 billion cut from Environment and Climate Change Canada and millions in cuts to the Impact Assessment Agency of Canada which oversees environmental impact assessments.

That means Carney plans to sacrifice the environment to push for more mining and fossil fuel development. Carney is also cutting $2.6 billion from Natural Resources Canada which means less oversight for planet destroying industries.

Capitalism is the crisis
This is a hard right neo-liberal budget that proves what many expected - that Mark Carney is on the side of the billionaire capitalists.

It is a symptom of a system in crisis that requires ever more exploitation of working people and stripping of our natural resources to maintain profitability. We have already seen this Liberal government attacking workers from Air Canada flight attendants to postal workers. And we know that the plans for super development will run-roughshod over the rights of Indigenous people and workers rights.