Mark Carney, former Bank of Canada governor and frontrunner in the Liberal leadership race, has vowed to cut federal public spending and balance the budget within three years, but with a key structural change: a new approach to managing government finances.
At a campaign event in Scarborough, Carney criticized what he called excessive government spending and proposed splitting the federal budget into two distinct categories—operating expenses (salaries, transfers, debt financing) and capital investments (infrastructure, clean energy and defence). His plan aims to balance the operational budget while continuing debt-financed investments in major projects.
“We need to spend less and invest more,” Carney said. “Reining in spending will allow us to offer a middle-class tax cut.”
Carney also announced a major shift in climate policy, scrapping the consumer carbon tax and shifting the burden to large corporations, which would be required to cut emissions and fund clean energy choices for Canadians.
He promised a middle-class tax cut, saying his government would ensure Canadians keep more of their earnings. He also pledged a direct financial boost for younger Canadians, helping them catch up to previous generations.
“Canadians deserve a government that works for them. A government that spends less and invests more,” Carney said. “We need a government that focuses on outcomes that matter to its citizens rather than spending their hard-earned dollars. At the same time, with our economy under threat from our largest trading partner, Canada needs a responsible new fiscal framework that will help spur new, transformative investments to build the Canada of the future.”
Carney said his government would focus on long-term investments to secure Canada’s economic future. His plan includes building millions of homes, expanding clean and conventional energy to reduce U.S. reliance, and investing in ports, rail, and infrastructure to diversify trade. He also emphasized boosting domestic defence and dual-use infrastructure to strengthen security and competitiveness.
By fostering this new era of investment, Carney said that his plan aims to create jobs, raise wages, and expand resources for federal programs supporting vulnerable populations—ultimately strengthening Canada’s economy.
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