Canada, in response to Trump's tariffs, needs to rebuild its economy as it did post-Second World War, asserted Champagne
The Canadian government is gearing up for a significant financial overhaul, with the tabling of the Liberal Party's budget bill scheduled for September 28, 2025. Finance Minister Francois-Philippe Champagne has promised this budget will mark a 'generational investment in our future,' aiming to reinvent the economy, similar to the post-World War II era.
According to Champagne, this budget will also bring relief from the Trump tariffs that have been affecting Canada. The Canada-U.S.-Mexico Agreement (CUSMA) is up for review on July 1, 2026, and CUSMA has been shielding Canada from the brunt of these tariffs.
The economic downturn, caused by U.S. tariffs and trade uncertainty, has taken a toll on Canada. The country's GDP slipped by about 1.5% in the second quarter of this year, and exports fell by 27%. Pedro Antunes, chief economist for the Conference Board of Canada, has warned that there will not be strong growth in the third quarter, and the economy is expected to be flat.
In response to the economic downturn, the Bank of Canada has dropped its key lending rate by a quarter of a per cent. The government is also actively working to cut its own operating expenses.
The trade wars between Canada and both the U.S. and China have contributed to an increase in Canada's trade deficit. Trump has questioned whether CUSMA is still necessary, and the United States has begun its public consultation process ahead of CUSMA's review.
Prime Minister Justin Trudeau has billed the budget as one of both cost-cutting and investment. Champagne vows to balance the operating budget within three years. He also promises relief for Trump's tariffs in the upcoming federal budget.
During the postwar period, Canada experienced economic prosperity, leading to suburban development, transportation expansion, and hydroelectric infrastructure growth. Consumers gained access to goods such as cars and televisions that were previously too expensive or unavailable due to wartime restrictions. Champagne hopes to replicate this economic boom with the upcoming budget.
However, Antunes also stated that the economy's current state could potentially lead to a recession. As Canada moves forward with its budget plans, it will be crucial to navigate the complexities of international trade and domestic economics to achieve a prosperous future.
