Carney bets on investors. Is it a sure thing?

Economy

Nov 8

With ambitions to catalyze as much as $500 billion in private investment over five years, the federal government’s new budget represents “a significant shift” toward growth and wealth creation, says Kevin Page, President and CEO of the Institute of Fiscal Studies and Democracy.

“I see the budget as a significant shift from previous budgets under Prime Minister Trudeau,” Page said during a Means & Ways post-budget panel discussion. “The government has given us a growth strategy in terms of how to handle the crisis.”

Page described the budget as a pivot from years of social policy investments toward measures aimed at stimulating capital formation and productivity. “It’s very much focused on growth, focused on capital investment,” he said. “Even the frame of the budget is very different than past frames.”

The panel, Navigating Budget 2025: What Mark Carney’s first fiscal plan means for the economy, business & Canadians, also featured Jennifer Angel, CEO of Evergreen, and moderated by Marci Surkes, Chief Strategy Officer and Managing Director of Compass Rose.

**M&W webinar panelists Marci Surkes, Chief Strategy Officer and Managing Director, Compass Rose; Kevin Page, President and CEO, Institute of Fiscal Studies and Democracy; Jen Angel, CEO Evergreen.**

In a sweeping fiscal plan, Finance Minister François-Philippe Champagne charted a five-year, $167.3 billion increase in deficits compared with the previous government’s forecasts. The budget includes an additional $115.2 billion over five years for infrastructure, more than $80 billion for defence, and $13 billion for a new national homebuilding initiative.

Despite the spending surge, Champagne insisted Canada’s fiscal footing remains sound. “We must use this fiscal firepower to make generational investments,” he said, emphasizing that Canada still holds the lowest net debt-to-GDP ratio in the G7.

The government also wants to catalyze $500 billion in new private investment over five years. “If realized, the government estimates it could increase GDP by 3.5% by 2030, improving the fiscal balance by $7 billion per year and providing more room to maneuver,” RBC Economics said.

Asked whether that target was realistic, Page called it aspirational — but strategically so.

‘Communication numbers’

“That would be the billion-dollar question,” he said. “Some of those numbers, $500 billion or a trillion dollars, seem to me like communication numbers — that we’re really trying to excite people about the art of the possible. But with that investment comes enormous opportunity.”

He added that business and young workers alike could benefit if the private sector steps up: “Opportunities for young people to go into the skilled trades, to get excited about the sciences, to build a new set of housing stock — so I see it more in that light.”

Page argued that the focus on growth and investment marks a moment of opportunity for Canadian enterprise. “Because it’s growth-focused, I think business is the big winner in this budget,” he said. “It’s going to create enormous opportunities across a whole range of businesses.”

He pointed to measures such as enhanced expensing for manufacturing investment and major infrastructure spending as “enormous opportunities for businesses to really pour money into capital, into machinery and equipment, and to boost their productivity.”

Normally, under Canada's Capital Cost Allowance system, the cost of a building used for manufacturing or processing is depreciated slowly over many years at a rate of about 4–10% per year. This new enhanced expensing measure lets qualifying businesses deduct 100% of the cost in the very first year the building is used for manufacturing or processing—essentially “immediate expensing” or full write-off upfront. This reduces taxable income dramatically in year one, freeing up cash flow for reinvestment.

Angel said the true impact of the budget will depend on how it translates lofty ambitions into operational programs.

“I’m interested less in the what and more in the how,” Angel said. “How can it catalyze private investment? How can it unlock capacity outside of the public sector?”

She described the budget’s infrastructure components — from housing-enabling projects to trade corridors and port modernization — as key levers for both economic and climate goals. “The climate imperative needs to be embedded in all of the infrastructure projects we’re undertaking,” she said. “It’s not infrastructure or climate — every project needs to achieve multiple public policy outcomes at the same time.”

A challenge to the private sector

She noted that public policy solutions should try to address multiple issues with lasting impacts to better grow the economy. “Thinking about the outcomes and really challenging every dollar that we're spending on infrastructure to get at multiple outcomes at the same time, and using that as an opportunity to challenge the private sector, and, indeed, community impact sectors, to bring ingenuity to the problems, I think that's where we can start to do something really interesting, and really make this a pivotal moment in Canada's history and future," she said.

Angel emphasized that innovation in procurement and governance will determine whether Canada can overcome its reputation for project delays. “We need to get some of the politics out of projects,” she said. “Instead of saying, ‘Here’s the perfectly designed thing, tell us what it will cost,’ we need to say, ‘Here’s the outcome we’re trying to achieve. How might you solve it?’”

Asked about Indigenous partnership in major projects, Angel underscored the need for genuine collaboration. “It’s not just about the duty to consult, but the opportunity to work shoulder-to-shoulder with Indigenous communities,” she said. “It means treating indigenous communities, sovereign nations, as equal partners and ensuring that they're at the table in the beginning.”

As political uncertainty swirled in Ottawa — including a floor crossing from the Conservative caucus to the Liberals, the resignation of a Conservative MP from Alberta and questions on which party would help the government pass the budget — both panelists agreed the fiscal plan marked a turning point.

“This is the start of a pivot,” Page said. “It’s not possible in one budget to make a generational investment, but within the constraints the government faced, it’s done as much as it could have.”

Angel echoed that the challenge now is execution. “The opportunity to meet the headlines is in how we deploy that capital — how we ensure it’s multi-solving, how we unlock capacity and ingenuity,” she said. “If we deliver it in the right way, this budget can really be transformative for Canada.”