The Canadian Taxpayers Federation is criticizing Prime Minister Mark Carney for ballooning spending and debt in Budget 2025.
“Budget 2025 shows the debt continues to spiral out of control because spending continues to spiral out of control,” said Franco Terrazzano, CTF Federal Director. “Carney needs to reverse course to get debt and spending under control because every dollar Canadians pay in federal sales tax is already going to pay interest charges on the debt.
“Carney isn’t close to balancing anything when he’s borrowing tens of billions of dollars every year.”
Franco Terrazzano
The federal deficit will increase significantly this year to $78.3 billion. There is no plan to balance the budget and stop borrowing money. The federal debt will reach $1.35 trillion by the end of this year, said the organization.
It said debt interest charges will cost taxpayers $55.6 billion this year, which is more than the federal government will send to the provinces in health transfers ($54.7 billion) or collect through the GST ($54.4 billion).
Budget 2025 increases spending by $38 billion this year to $581 billion.
Despite promises to control spending in future years, Budget 2025 projects that overall spending will continue to rise by billions every year, said the CTF.
“Canadians don’t need another plan to create a plan to meet about cutting spending, Canadians need real spending cuts now,” Terrazzano said. “The government always tells Canadians that it will go on a diet Monday, but Monday never comes.
“And the government isn’t really finding savings if it’s planning to keep increasing spending every year.”
Budget 2025 commits to “strengthening” the industrial carbon tax and “setting a multi-decade industrial carbon price trajectory that targets net zero by 2050.”
“Carney’s hidden carbon tax will make it harder for Canadian businesses to compete and will push Canadian entrepreneurs to set up shop south of the border,” Terrazzano said. “Carney should scrap all carbon taxes, cut spending and stop taking so much money from taxpayers.”
The full budget can be found here.
Small business owners were looking to the 2025 budget to provide critical cost relief and to improve Canada’s tax competitiveness to jump start the economy. Instead, most of the budget’s economic measures were reannouncements from 2024, said the Canadian Federation of Independent Business (CFIB) following the release of the federal budget.
“Today was a missed opportunity to provide meaningful tax relief to Canada’s employers. The government could have taken the reins by reducing the small business corporate tax rate, freeing up millions of dollars for investment in employees, technology and operations,” said Dan Kelly, CFIB’s President.
Dan Kelly
“Government finances are a mess, but the budget just slows the growth in program spending with overall deficits above $50 billion per year as far as the eye can see. Small firms have learned the hard way that today’s deficits are tomorrow’s taxes.
“In addition to the lack of tax relief and giant fiscal deficits, many of the measures meant to stimulate the economy or insulate Canadians from the impact of tariffs appear to exclude small firms.”
- The $51-billion Building Communities Fund is to focus on projects using unionized labour, which would effectively exclude 90% of small businesses.
• The $1-billion Regional Tariff Response Initiative delivered by Regional Development Agencies misses the mark and excludes over half of small businesses that will be deemed too small or in the wrong sector.
• The Canadian Entrepreneurs’ Incentive announced in budget 2024, repeated in the Fall Economic Statement and confirmed as recently as January 2025, has now been officially cancelled.
But Kelly said there were a few wins for small business owners in the budget, albeit many were reannouncements from 2024.
- Government is reintroducing the Accelerated Capital Cost Allowance on most capital assets and immediate expensing provisions. The budget also extends immediate expensing to manufacturing and processing buildings. This is a sound way to improve productivity among many Canadian SMEs.
• Legislation to increase the Lifetime Capital Gains Exemption to $1.25 million has been confirmed. This is an important measure to help with small business succession plans.
• Legislation to remove income taxes from the Canada Carbon Rebate (CCR) for Small Business and to extend the deadline will be introduced. CFIB has also confirmed with government sources that the $623 million in CCR payments for 2024/25 will be distributed before the end of the year.
Corinne Pohlmann
“Small business confidence in the economy remains incredibly low given the massive uncertainty over tariffs from the U.S., China and now India,” said CFIB’s executive vice-president of advocacy Corinne Pohlmann.
“While progress was made on a few fronts, there were very few new measures that will offer immediate help for small business owners trying to keep the lights on.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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