Does the Government’s Budget 2025 Meet the Moment?

On November 4, the federal government released its Budget 2025, framed as a “hinge moment” for Canada’s economy. From national security to digital innovation, four experts have weighed in on whether this budget truly meets the moment. This is their analysis of where the government got it right — and where the gaps remain.

Digital Economy

Canada’s 2025 budget is an expensive missed opportunity.

For months, Prime Minister Mark Carney has called this a “hinge moment.” On October 8, 2025, Finance Minister François-Philippe Champagne promised a “generational investment” to make Canada “the strongest economy in the G7.”

The numbers are indeed generational: a projected $321.7 billion deficit over five years. But the budget lacks the imagination and vision to build the economy of the future that Canada needs. Increased outlays in defence and housing — two big-ticket items — overshadow investments in much-needed economic growth.

Yes, there are smart pieces included in Budget 2025: financial data sharing; faster, broader capital investment write‑offs; scientific research and experimental development reforms; ElevateIP and IP Assist to help Canadian businesses use intellectual property more strategically; Business Development Bank of Canada funding to promote venture capital; an artificial intelligence measurement initiative; and building infrastructure.

But overall, the package stays anchored in last century’s resource playbook with no coherent plan to build tomorrow’s digital economy. Perplexingly, while there is $1 billion to attract foreign researchers, there is no ambitious plan to educate and empower Canadians to build for — and thrive in — the age of intelligence.

Canada needed a budget that met the moment; it got a costly plan to do a lot more of the same.

Defence and National Security

The desired generational investment and transformational impact for Canadian national defence and security cited in Budget 2025 will squarely depend upon the successful execution of a challenging agenda to rapidly and comprehensively redevelop an emasculated broader institution after decades of under-resourcing. The challenge will be to coherently spend the promised $81.8 billion (3.5 percent of GDP) dedicated to core military capabilities over the next five years during a tumultuous period of organizational transition.

Effective execution of this renewed vision by the planned Defence Investment Agency for a progressive and enhanced defence capability depends heavily on the ability to smartly address a confluence of issues: first, a chronically deficient acquisition program that inadequately supports rapid technology adoption in the key cyber, space and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) domains; and second, improving the Department of National Defence’s ability to guide industry development of emerging disruptive technologies critical to battlefield success.

The Defence Industrial Strategy, which effectively adopts a model already employed by leading Western military and economic powers, must be postured to deliberately favour, cultivate and develop Canadian capacity in all areas where Canada has promising capabilities. It must do this through its commitment as an anchor client, all the while gauging the temptation to focus large capital expenditures on internationally sourced platforms with nominal internal economic benefit.

Success in this vein will contribute to setting Canada on the path to realizing its sovereign security and economic ambitions, as well as the needed international credibility and influence within the North Atlantic Treaty Organization and the increasingly important European security community.

Digital Monetary Innovation

Budget 2025 takes meaningful steps to modernize the country’s financial governance architecture, most notably through the creation of a Financial Crimes Agency and a National Anti-Fraud Strategy, to counter increasingly sophisticated scams and money-laundering networks. These are essential for safeguarding public trust as financial activity migrates to digital platforms, but, overall, the budget misses the moment for digital monetary innovation.

The budget’s proposal to introduce legislation regulating fiat-backed stablecoins issued by non-prudentially regulated entities, with corresponding amendments to the Retail Payment Activities Act, is a welcome first step. It acknowledges that the future of money will be programmable, tokenized and platform-based. However, this regulatory gesture remains incremental. Canada still lacks a comprehensive digital money framework that links stablecoins, tokenized deposits and potential retail or wholesale central bank digital currencies within a unified innovation and oversight architecture.

Other G7 economies, from the European Union’s digital euro pilot to Japan’s tokenized-deposit initiatives, are already testing integrated digital monetary systems. To complement its enforcement focus, Canada must now invest in trusted digital money rails through a unified ledger connecting banks, fintechs and public infrastructures — under clear governance for privacy, interoperability and resilience. Without this, Canada risks securing its financial perimeter while others build the next generation of monetary networks.

Economic Resilience

In preparing Tuesday’s federal budget, Prime Minister Mark Carney and Finance Minister François-Philippe Champagne confronted huge economic and geopolitical challenges. The geopolitical challenge is the continuing threat to Canadian sovereignty posed by US President Donald Trump’s unending, unwelcome and unprecedented allusions to fifty-first statehood. It is unclear whether those threats are genuine or the tactics of a schoolyard bully. Regardless, it would be irresponsible to ignore them given the overarching economic challenge facing the government — the deliberate, though ill-conceived, restructuring of the global trading system triggered by US tariffs.

These challenges impinge on federal budget making in two key ways. First, the uncertainty generated by them has weakened economic growth; with the size of the economy smaller than previously expected, tax revenues are lower. Second, successfully meeting the two challenges requires, arguably, the largest investments in defence preparedness and economic infrastructure in the past 80 years.

These investments reflect pressing national priorities, including replacement of military equipment near or at the end of its effective lifespan. But investments are also needed to support efforts to enhance interprovincial trade and diversify Canada’s international exports, both of which are critical to reducing dependence on an increasingly erratic and unreliable neighbour.

Budget 2025 recognizes the importance of these investments and funds a suite of measures toward them. Though time will tell if these investments and budget measures aimed at catalyzing private sector investments meet the geopolitical and economic challenges facing Canada, there is little doubt that they are targeted on the right objectives.