The 2025 Budget leaves the federal deficit roughly double its current size out till the end of the decade, but it will still average just 2.5% of GDP, implying the new measures hardly constitute the “generational” change Finance Minister François-Philippe Champagne had promised. With the majority of spending focused on long-term defence and infrastructure projects, today’s announcement increases the likelihood that the Bank of Canada will still have to cut its policy rate below neutral to support growth.
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