If the government had a story to tell with today’s Fall Economic Statement (“FES”), it went up in flames as Chrystia Freeland delivered a scathing resignation citing disagreements with the Prime Minister over fiscal priorities.
What we are left with is a rare “backroom” FES, with no Finance Minister to communicate the government’s vision – or lack thereof – in the face of a $61.9 billion deficit and the threat of a trade war with our largest trading partner.
Picking up the scraps, we are left with a GST holiday (or a “political gimmick” as Freeland alluded in her resignation), a $17.4 billion corporate tax incentive, and a suite of border and security measures.
While the loser of today’s events is irrefutably the government itself, there are several wins for corporate Canada: The extension of the Accelerated Investment Incentive, significant investments in AI, and an enhanced SR&ED program are likely to be well received by business.
Fiscal hawks, however, are likely to be disappointed as Finance Canada adds $21.8 billion to the deficit – driven by ”significant unexpected expenses related to Indigenous contingent liabilities”.
Most importantly, the government has finally presented a response to the existential threat of Trump’s proposed tariffs: with new spending on the CBSA, RCMP, CSE, and Public Safety. All eyes are on Mar-a-lago to see if these commitments will help dissuade the threat of 25% tariffs which would decimate economies on both sides of the border.
You can find our analysis of the budget below. For more analysis, or support engaging government on any of the budget announcements, contact your Navigator team or reach out at info@navltd.com.
