Canada PM says first budget will help reduce reliance on US

Trump's tariffs have hit Canada hard, driving up unemployment and squeezing businesses in crucial targeted sectors like autos, aluminum, and steel.

"Where are we going to find the growth given the headwinds from the new US trade policy?," Carney told reporters in South Korea this weekend, following an Asia summit.

"What this budget will do is provide the answer to that question." 

His Liberal government says the budget will address the stark new geopolitical realities facing Canada.

Specific details of the spending plan are being kept under wraps until the finance minister unveils the budget in parliament on Tuesday. 

Among the headline items will be expected major increases in defense spending to bring Canada in line with NATO targets.

Funds will also be allocated to a series of national projects that Carney has said are key to Canada's economic sovereignty, given the "rupture" in economic relations with the United States.

These range from port expansion to energy production and the infrastructure needed to boost extraction of critical minerals from remote areas.

Finance Minister Francois-Philippe Champagne called the measures he'll present on Tuesday as "an investment budget."

"The idea is to build the Canada of tomorrow."

- 'Not a game' -

Carney, who replaced Justin Trudeau as prime minister in January before being elected to a full term in April, has consistently warned Canadians that the Trump-era disruptions in US-Canada relations are not a passing phase.

He said this weekend that the budget would help "reduce our reliance on the United States," but noted that such a transformational shift "can't happen overnight."

Carney's April election win left his Liberals three seats short of a majority in parliament. That means the government needs opposition support — or abstentions — to pass its budget.

Because the budget is a confidence vote, its defeat would trigger fresh elections.

The Conservatives, the largest opposition party in parliament, may be the least likely to help.

Party leader Pierre Poilievre has made a range of demands in exchange for his support, including deficit reduction.

But University of Ottawa public policy expert Genevieve Tellier told AFP she expects the deficit to be "very large."

The left-wing New Democrats, who no longer have official party status in parliament after a dismal election performance in April, may prove reluctant to trigger another vote and could abstain on Carney's budget.

Tellier said she saw "little chance" of the government falling.

Asked over the weekend if he was confident his budget would pass, Carney said: "I am 100 percent confident that this budget is the right budget for this country, at this moment."

"This is not a game," he added, voicing readiness to defend his proposals in an election if necessary.

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