Canada's budget allocates billions for sovereignty and homelessness

Prime Minister Mark Carney has announced a federal budget that includes tens of billions of dollars in new spending, focusing on national sovereignty and addressing the high cost of living. The budget, titled 'Masters of Our Destiny,' aims to reduce Canada's reliance on the US for trade and tackle the affordability crisis.

The C$142bn in new spending over the next five years is attributed to better-than-expected revenues from oil prices, bolstered by the Iran War. Canada's deficit remains over C$50bn, with no clear path to balance. Despite the new spending, Carney has maintained his previous fiscal goals, including modest GDP growth and a lower unemployment rate compared to last year.

A major component of the budget is an C$11.2bn commitment over four years to combat homelessness. This includes funding for supportive housing, mental health and addictions treatment, and an expanded grocery benefit for low-and-modest income households. Statistics Canada reported that one in eight Canadian households has experienced homelessness in their lifetime.

The budget also includes measures to address inflation and unaffordable housing, such as a grocery benefit estimated to provide C$2,570 for a family of four within a year. However, average hourly wages have not kept pace with inflation, and food bank usage has reached record highs. The average home price in Canada has dropped around 22% in recent years, but housing remains unaffordable in major cities like Toronto and Vancouver.

Immigration targets remain unchanged, with the government keeping permanent resident admissions at 380,000 annually until 2028. Temporary resident arrivals will be gradually reduced to 370,000. The government has resisted calls to increase immigration levels, despite warnings from the Royal Bank of Canada that without immigration, Canada's population could shrink significantly by the turn of the century.

The budget also includes support for businesses affected by US tariffs, with C$44bn set aside for workers and companies hit by Trump's trade policies. Additional funding is directed toward sectors like steel and forestry, with the BC Council of Forest Industries welcoming the support as a critical measure for workers. The government emphasizes that diversification from the US will take time, but the shift is underway.