Next Tuesday is Remembrance Day. We encourage all members of the Build Canada community to observe it as best they can, whether it is wearing a poppy, attending a ceremony at your local cenotaph, or simply pausing for a moment of silence at 11 a.m. Poppies are becoming harder to find, but the Canadian Legion has a list of partners on their website. You can also donate to the campaign online.
Any evaluation of this week’s federal budget fundamentally comes down to one question: Is this a national emergency or not? Judging by what Minister of Finance François-Philippe Champagne presented to the House of Commons last Tuesday, the Liberal government’s answer to that question is, “it’s not.”
If there is such a thing as a consensus in this country, the received wisdom on the budget was that if you go by the standards of the previous decade under Justin Trudeau, it was very good. If you go by the standards of normal times budgeting in Canada over, say, the last half century, it was not bad. But if you go by the rhetorical standard set by Prime Minister Mark Carney himself, both in last April’s election campaign and in the months since, it was not even close to being up to the task.
It is worth rehearsing how we got here. Recall that ten months ago, Donald Trump was threatening to tariff the Canadian economy into submission, to the point where we would have no choice but to sue for annexation. The entire premise of Mark Carney’s entry into politics, his winning of the leadership of the Liberals, and his subsequent (and successful) campaign for prime minister, was that this was a Defcon 1 moment for Canada, that Carney was the only grownup in the room, and the one person who would be able to stand up to Trump.
Two things became obvious at that time. One was that Canada’s extreme lack of interest in pulling its weight militarily had seriously annoyed our allies and left the country unable to make even the barest gestures towards proactive sovereignty. The second was that Canada had allowed itself to become utterly dependent on free access to the U.S. market, which masked deep structural problems with our economy. A great deal of the “51st State” rhetoric coming out of Trump’s administration was just the sound of a whole lot of chickens coming home to roost.
While those noises have abated (somewhat, anyway), the underlying problems have not. Hence, we spent the summer hearing about this being a hinge moment for Canada, requiring a transformative, generational budget that would catalyze a new period of investment and growth that would get Canada building again. Canadians nodded along, because deep down they understand that it is all true.
What we got this week was a significant investment in defence, enough to keep us above the old NATO target of 2% of GDP. There were some useful initiatives that reflected ideas originally put forth in Build Canada memos, including a streamlining of the SR&ED program, the decision to create an accelerated pathway for H-1B visa holders, and the reinvigoration of a program designed to bring external leaders into public service. But as Tony Keller of the Globe and Mail noted in his analysis of the budget, aside from defence spending, the single biggest budget expenditure over the next five years is last summer’s reduction in the lowest income tax bracket from 15 to 14 per cent. When it comes to money or initiatives to encourage the sort of investment that will grow the economy, in particular by addressing Canada’s distressingly anemic productivity growth, there wasn’t much.
But there is one other thing that wasn’t in the budget that almost no one is talking about, and that is sacrifice. Or if that is too triggering a word for these sensitive times, how about choices. What are Canadians being asked to give up? Virtually nothing. A Liberal government that for years told Canadians that it could have either destroyers or dental care, sovereignty or social programs, is now telling us we can have it all — what’s another $78 billion on the national credit card.
The question is not whether Canada has the “fiscal room” to manoeuvre here, in the short or even medium terms, as many economists seem to suggest is the case. And it isn’t about the ever-changing “fiscal anchors” that Ottawa keeps chucking overboard, budget after budget. It’s that the long term has an annoying habit of showing up eventually; chickens (see above) eventually return, and often sooner than you expect. What is sown by the past must be reaped by the future, and just as Canada is paying the price now for decisions made years and even decades ago, so the choices we make now will have real impact on our children, and their children.
So let’s take it as given that this is a national emergency, that this is a “hinge moment” for the country, for its prosperity and, ultimately, its sovereignty. Let’s ask ourselves, on behalf of future generations of Canadians: Did we rise to the challenge? Were we even asked to?
What’s new at Build Canada
Budget, visualized
If you’re looking for a visual way to ingest the budget’s finances, check out Canada Spends. You can see the government’s projected finances for the upcoming fiscal year. Thanks to Nelson for his help in preparing this. Also check out the Canada Spends X account for budget spending updates.
The Movement Grows: Events Across the Country
Canadians are showing up across the country to network, talk federal budget, and organize the future of Canada. Here’s the next sprint of events and we would love for you to join us.
Calgary Meet Up on November 12 at House 831
Understanding Canada: Halifax Reading Group on November 12
Understanding Canada: Vancouver Reading Group on November 12
Build Canada x UofTHacks Fireside on November 13 at the University of Toronto (featuring Farhan Thawar, Head of Engineering at Shopify)
Unloud: Build Canada Montreal Meetup on November 18
Build Canada x McMaster Venture Capital Club on November 20 at McMaster
Sandstone CONNECTS: Building a Better Canada on November 26 in Calgary
C. D. Howe, a Great Canadian Builder
Just in time for the federal budget, this week’s Great Canadian Builder is the original minister of everything, the American by birth but Canadian by choice, the one without whom the war would have been lost: C. D. Howe!
Post-budget Media
Lucy hit the radio circuit to share our take on the budget.
Ben Mulroney Show - AM640 (starting at the 33 minute mark)
The Shift with Patty Handysides – AM800 Windsor
The Bill Carroll Show – CFRA Ottawa
MyFM with Jordan Mercier
Merch is coming for the holidays
We’re heartened to see the excitement around our merch. We are working with our partners at Province of Canada to do another run of Build Canada branded t-shirts and quarter zips. We’ll be re-opening a restocked merch store at the end of November, just in time for the holidays.
What else we are reading
Three Canadian companies made the first cut in a DARPA quantum computing challenge.
Mark Carney’s “bizarre” insistence on using British spelling.
Build Canada Board Chair Dan Debow sat down with Tara Henley to talk about how this is the time for “bold adventurism”.
RIP Alex Tilley, inventor of the Tilley Hat and a great Canadian entrepreneur.
Prince Harry says he wore a Dodgers hat to the World Series “under duress”.
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Whoever wrote the section on, "Any evaluation of this week’s federal budget" does not understand how federal public money works.
Bond ratings agencies do not determine the federal government's ability to borrow. In short:
"...bond markets only function because governments guarantee their existence. Without the state's promise to stand behind its own currency, there would be no “safe asset” for investors to buy. Nor would there be the structures in which bond markets can operate. Bond dealers are not doing governments a favour. It is governments that create the conditions in which bond dealers profit." https://www.taxresearch.org.uk/Blog/2025/09/08/bond-markets-do-not-rule-governments-do/
'Borrowing' means something completely different when it comes to the federal government -- unlike a household or a business, the federal government is the source of its own spending money. The federal government neither has, nor requires a "credit card" to finance itself. Neither does our federal government collect taxes to fund its operations (the, "Budget, visualized" chart is pretty, but makes a spurious connection between federal taxes and budgetary allocations).
Federal taxes are collected for only two reasons: to create a demand for the national currency and as a way to control inflation, including inflation that could be caused by the government's own spending. Federal taxes take money out of existence that was previously spent into existence by the Central Bank (yes, there can be other reasons for federal taxes -- incentivizing X, disinsentivising Y--but those are all subsidiary to the two primary reasons for federal taxes). Those two basic reasons for national level taxes is true whether we're talking about Canada, the US, the UK, Japan, or any other country that issues its own currency AND whose debt is denominated in its own currency -- as Canada's is. Look here for the evidence under "Sources of Borrowing and Uses of Borrowing": https://www.canada.ca/en/department-finance/services/publications/debt-management-report/2023-2024.html#a15 There you will see that more than 98% of Canada's 'borrowing' is in the form of issuing its own treasuries and bonds -- all of which are denominated in Canadian dollars.
It's not like the federal government is going out into Money Market Land, cap in hand, knee-a-bended to the bankers and bond traders to get the money it needs to fund its budget. The money for the federal budget released Nov. 4th does not yet exist. It will only come into existence if parliament passes that budget (i.e., in it's final 'confidence vote'). If the budget passes, the finance minister will then instruct the Bank of Canada to credit the relevant accounts literally with keystrokes--et voila--money that wasn't there before now is.
I'm all for critical, nonpartisan analysis of budgets, but describing how federal public money works as if it's like a household or a business is flat out false and, as such, hinders informed discussion. Data visualizations that make a spurious link between the federal taxes we pay and federal budget line items do not help either.
Sacrifices from who? The tech “job creators” or your grandma’s healthcare quality?