This week, fiscal strategy dominated headlines as the federal government delayed its 2025 budget and introduced a middle-class tax cut, setting the tone for economic policy under Prime Minister Mark Carney.
Federal Budget Delayed as Tax Cut Takes Center Stage
Finance Minister François-Philippe Champagne confirmed that the federal government will not table a 2025 budget during the current parliamentary session. Instead, the Liberals will focus on delivering a middle-class tax cut, a fall economic update, and a Speech from the Throne later this year. The Canadian Taxpayers Federation criticized the decision, calling for greater transparency in government spending amid rising debt.
The tax cut is meant to cushion Canadians from the rising cost of living. This will reduce the lowest personal income tax rate from 15% to 14%, effective July 1, 2025. Champagne said the measure will provide $27 billion in tax relief over five years, saving two-income families up to $840 annually beginning in 2026.
Ontario Budget 2025 Sparks Debate Over Jobs, Deficit, and Public Services
Ontario Minister of Finance Peter Bethlenfalvy released the 2025 Ontario Budget, A Plan to Protect Ontario, focused on protecting workers, businesses, and jobs amid economic challenges, including U.S. tariffs that have contributed to a projected $14.6-billion deficit. The budget committed over $200 billion to a 10-year capital plan to improve infrastructure, public transit, healthcare, schools, and child care.
It also proposed permanent gasoline and fuel tax cuts, removed tolls on Highway 407 East, and launched a $5 billion Protecting Ontario Account to help businesses facing disruptions. Additionally, the budget will invest $500 million in a Critical Minerals Processing Fund and expanded support for Indigenous partnerships and manufacturing through enhanced tax credits and loan guarantees.
Ontario Premier Doug Ford emphasized that the budget focuses on investing in the economy to protect workers and businesses amid ongoing challenges rather than offering immediate tax cuts. He highlighted key measures, including tariff relief, major infrastructure projects, and expanded skills training to build a resilient and competitive province.
Ford also acknowledged persistent challenges in housing, healthcare, and education that the government continues to address.
Ontario Liberal Leader Bonnie Crombie slammed the budget as neglectful of healthcare, education, and housing, accusing the government of favouring insiders over struggling families. Finance critic Stephanie Bowman warned that despite record per capita spending, the province faces crumbling infrastructure and a looming half-trillion-dollar debt.
NDP Leader Marit Stiles and Green Party Leader Mike Schreiner criticized the budget as lacking real support for families, calling it a “Band-Aid budget” that prioritizes industry over essential services like housing and healthcare.
Various groups and organizations offered measured support. The Ontario Bioscience Innovation Organization, the Council of Canadian Innovators, and the Ontario Chamber of Commerce welcomed investments in life sciences, infrastructure, and skills development—but warned that Ontario risks falling behind without a bold economic strategy focused on value-added production and high-growth firms.
The healthcare response was more critical. The Ontario Hospital Association and the Ontario Nurses’ Association expressed concern over underfunding and staffing shortages. Meanwhile, mental health organizations applauded the $303-million investment in community-based services, and palliative care groups welcomed renewed hospice funding.
Labour leaders, including the Ontario Public Service Employees Union and the Provincial Building and Construction Trades Council of Ontario, appreciated the infrastructure focus but still failed to address urgent funding needs and called for more support for workers and public services.
Carney Strengthens Global Ties with Mexico and the Netherlands
Prime Minister Mark Carney spoke with Mexican President Claudia Sheinbaum and Dutch Prime Minister Dick Schoof.
With President Sheinbaum, he discussed strengthening economic ties under the Canada-United States-Mexico Agreement and directed senior officials to explore deeper cooperation.
With Prime Minister Schoof, he marked the 80th anniversary of the Netherlands’ liberation and discussed boosting trade and international security coordination.
Canadian Innovators Urge Bold Action on Issues and Investment
At the Council of Canadian Innovators Capital and Growth Summit, experts called for the urgent need to tackle procurement issues, boost local investment, and implement policy shifts to empower Canadian innovators and prevent their early exit to overseas markets.
Canada Faces Persistent Gaps in Access to Rare Disease Treatments
A study published in Value in Health Journal found that high-income countries, including Canada, implemented legislative incentives, public-private partnerships, and patient registries to improve access to rare disease treatments, but ongoing challenges such as high therapy costs, diagnostic delays, and regional disparities continued to hinder progress.
The study noted that Canada launched its first national rare disease strategy in 2023, pledging up to $1.5 billion over three years to improve access to and affordability of rare disease treatments. For research and development, the federal government committed $32 million over five years to improve diagnostics and build a rare disease clinical trials network.
On the other hand, Canada’s lack of a dedicated pricing and reimbursement strategy for rare diseases may contribute to the limited approval and reimbursement of orphan medicines, with only 60% of those authorized in the U.S. or EU between 2015 and 2022 approved in Canada.
MPs and Senate Pay Raises Spark Criticism
The Hill Times reported that all Members of Parliament and Senators received automatic salary increases under the Parliament of Canada Act, raising base salaries to $209,800 for MPs and $184,800 for Senators. Prime Minister Mark Carney now earns $419,600, while opposition leaders Andrew Scheer and Yves-François Blanchet receive $308,800 and $261,500, respectively, with additional pay for leadership roles.
While some argued the pay increases reflect the demands of parliamentary work, the Canadian Taxpayers Federation and other critics called the timing inappropriate amid rising inflation, cost-of-living concerns, and government messaging around fiscal restraint.
