Canada’s finance minister says his upcoming fiscal plan aims to “crowd in” private investment as the federal government ramps up capital spending on major projects and cuts regulations.

“What people will see in the next budget is fiscal discipline, a shift toward capital formation and a shift toward long-term prosperity,”

Francois-Philippe Champagne said in an interview with Bloomberg News. He was attending the meetings of the

International Monetary Fund and World Bank in Washington. Champagne will present a budget on Nov. 4, and while he’s reluctant to offer any details on changes to corporate taxes ahead of that release, he said he’s focused on ways “to make sure that Canada remains competitive.”

“We always need to do more. And that’s what this budget is about,” he said.

The budget will be the first of Prime Minister Mark Carney ’s tenure, and businesses are hopeful after a decade of less investor-friendly policy under the country’s former leader Justin Trudeau. But Champagne’s challenge will be convincing deficit hawks that deeper outlays will pay off.

Economists surveyed by Bloomberg see the deficit rising to $70 billion, though some analysts put the shortfall closer to $100 billion, about three per cent of the country’s

gross domestic product. Champagne declined to say whether Canada’s net debt as a percentage of the economy would rise or fall in coming years. But investors can look to lower operating expenditures at the federal level and an eventual narrowing of the fiscal shortfall as a percentage of gross domestic product as evidence of prudence, he said.

“We have said that we’ll balance our operating budget by 2028 or 2029, and that we would have a declining deficit-to-GDP ratio over that period,” Champagne said.

On Thursday, the IMF’s managing director singled out Canada as one of few Group of Seven countries that had

fiscal room to spend big on housing , infrastructure and defence to boost lagging productivity — all major pledges made by Carney since becoming prime minister earlier this year.

Business groups, economists and policymakers have all offered varying degrees of guarded support for using the country’s fiscal position to draw investment back into the northern nation, which has languished for years.

U.S. President Donald Trump ’s trade war is adding further pressures. Earlier this week,

Stellantis NV announced it planned to move some production from Canada to the US, a decision Champagne called regrettable.

But there have also been warnings about adding too much federal debt too quickly. Canada’s interim parliamentary budget officer has cautioned that the country’s debt as a percentage of the economy will rise, and called the fiscal picture “stupefying” and “not sustainable.”

Interest burden has also pushed higher as rates, term premia and inflation risks remain elevated globally. In Canada, public debt charges are already over 10 per cent of revenues.

Champagne must persuade those who are concerned about red ink that the Liberals’ approach to federal finances has shifted under Carney, with more focus on jump-starting private outlays. The party was led previously by Trudeau, who was more squarely focused on re-distributive policies.

Businesses have a major stake. Corporate taxes represent nearly a fifth of the federal government’s revenues, one of the highest levels in records dating back to the 1960s.

Champagne is also set to face revenue pressures as Carney has already scrapped a planned increase to the capital gains tax inclusion rate and cut income taxes. As well, Trump’s tariffs have hit the economy hard, forcing GDP to contract in the second quarter.

Despite the headwinds, Champagne is optimistic about Canada’s growth prospects.

  • Liberal government will move federal budgets to the fall
  • Carney to unveil budget Nov. 4

Internationally, the minister said investors see Canada’s human capital, industrial base and broad trade agreements as big selling points. The country’s conventional and renewable energy reserves, as well as undeveloped rare-earth minerals, are other sources of strength.

“Canada can be the supplier of choice to our allies and partners around the world when it comes to critical minerals and rare earths.”