Here’s how Carney’s promises stack up as he prepares to deliver his second budget

With Prime Minister Mark Carney releasing his second budget next week after a year of announcements on major projects, foreign trade deals and new defence spending – and on the heels of a summit that drew foreign investors from around the globe – we check in on how his progress stacks up against his promises in nine areas.

The progress: At a September investment summit in Toronto, Mr. Carney announced that his government will balance the operating budget one year ahead of schedule.

However, in a series of recent reports, Parliamentary Budget Officer Annette Ryan has struck a cautionary note about the direction of Ottawa’s finances. Specifically, Ms. Ryan said the government’s definitions of what counts as operating versus capital spending is based on unclear and sometimes contradictory definitions.

The government’s approach to measuring its operating budget allows it to still run a traditional deficit and pile on more debt, leading economists to question the usefulness of the target, which Ottawa describes as a fiscal anchor.

However, while the size of the deficit is often the focus of the budget in the public’s eyes, that metric doesn’t tell the whole story. In a recent report, Ms. Ryan pointed out that the cost of interest on the federal debt is the fastest-growing federal expense. While each year’s federal deficit is added to the federal debt, the PBO points out that other less-understood factors – including the way defence spending and loans to Crown corporations are accounted for – also contribute to Ottawa’s debt, which is growing twice as fast as the deficit.

The PBO says the size of the federal debt will rise to $1.67-trillion in 2030-31, up from $1.3-trillion in 2025-26.

The debt as a percentage of GDP will reach 42.6 per cent, up from 41.1 per cent over the same time frame. For context, the debt-to-GDP ratio was around 31 per cent in 2018-19, before the pandemic, which led the government to add billions in new debt to fund emergency support measures.

The deficit-to-GDP ratio is projected to increase slightly from 1.8 per cent in the current fiscal year to 2 per cent in 2027-28, before declining to 1.7 per cent in 2030-31.

Should the November federal budget confirm increases in the debt and deficit-to-GDP ratios, that would run counter to Liberal Party’s campaign pledges.

– Bill Curry, Ottawa

The progress: Put simply, Mr. Carney has struggled to reset Canada’s economic relationship with its largest trading partner. Whether anyone else could have made lasting progress in talks with a president as capricious as Mr. Trump is another matter entirely.

The Canada-United States-Mexico Agreement has been living under a shadow since July, when the Trump administration chose not to grant a 16-year extension to the deal, triggering a decade-long process of annual reviews and uncertainty. Meanwhile, Mr. Carney suspended trade talks in August after accusing the U.S. of introducing last-minute measures that made it “unfair” and “uneconomic.”

Yet as difficult as this uncertain trade environment has been, Canada’s total exports to the U.S. are higher than before Mr. Trump was elected.

Mr. Carney has framed Canada’s stance as holding out for a broad, durable deal and he has repeatedly expressed the sentiment that no deal is better than a bad deal. If and when his negotiating team does reach a deal with the Americans, he’ll have to convince Canadians it is a good deal that was worth the wait.

– Jason Kirby, Toronto

The progress: Ottawa has landed broad commitments and promises with big dollar figures attached, but firm investment deals are in short supply.

In the run-up to September’s Canada Investment Summit, big banks made major financing commitments – TD Bank alone promised to undertake $150-billion of lending, underwriting and financing work for Canadian companies over five years. Brookfield Asset Management and the Canada Pension Plan Investment Board launched a $50-billion “Maple Fund” to make big-ticket domestic investments. Other pension funds followed suit with multi-year, multi-billion-dollar pledges.

The government of the United Arab Emirates has pledged to invest $70-billion in Canada. Dubai-based ports giant DP World Ltd. has signed a memorandum of understanding to explore an expansion of the Port of Churchill, while other entities have signed agreements to facilitate energy co-operation and business connections, but with no financial commitments spelled out.

But none of that has yet translated into significant amounts of capital flowing into Canadian projects or companies, and investors have cautioned that deals of this size take time to come together.

– James Bradshaw, Toronto

The progress: Ottawa has backed a new oil pipeline from Alberta to the West Coast, called Pacific Link, with the aim of expanding exports to more global markets. The first proposal to gain the Project of National Interest stamp, the pipeline, if built, would transport one million barrels of crude to southern B.C. each day. The federal government has also committed $100-million toward development of a Nova Scotia offshore wind energy project and said it will cover up to $1-billion in international UN fees for the Bay du Nord oil project off the coast of St. John’s, NL, which would stem from the fact that it would fall outside of Canada’s exclusive economic zone.

Joint venture company LNG Canada announced in September it would go ahead with the second phase of its liquefied natural gas export facility on the B.C. coast, following an agreement between the province and federal government that aims to accelerate the construction of major energy and trade corridors.

On the environmental front, the B.C. agreement included a pledge to uphold the oil tanker ban for the province’s northern coast. In addition, in September, Mr. Carney announced a $1.2-billion federal ocean protection package. Electrification has been hit and miss: Mr. Carney has shelved clean electricity regulations in Alberta and relaxed a previous mandate on EV sales, but has committed to $2-billion over eight years for heat pump rebates.

Mr. Carney’s government has seen some pushback from environmental groups and some First Nations over potential negative effects caused by the accelerated approval processes for pipelines, ports and mines under the Building Canada Strong Act.

– Emma Graney, Calgary

The progress: The Major Projects Office now has a staff complement of 200 assisting development proponents with regulatory and Indigenous consultation direction as well as providing options for sources for funding. Many of those staff members are seconded from the private sector.

The MPO is evaluating 18 projects, including mines, ports, power transmission lines, roads, LNG projects and pipelines. The agency is also studying 10 so-called transformative strategies that involve multiple proposals within regions. It all represents $194-billion in potential spending, the MPO says.

The MPO’s listing of the Pacific Link oil pipeline and the Roberts Bank Terminal 2 in British Columbia as projects of national interest under the Building Canada Act gives them a fast-track approval process to be complete by Sept. 1, 2027. There are three other proposals in the queue for potential listing: the Mackenzie Valley Highway Project in the Northwest Territories, Grays Bay Road and Port Project in Nunavut and a deep nuclear waste storage project in Northwestern Ontario.

In September, at Mr. Carney’s investment summit in Toronto, institutional investors from around the world met with backers of more than 160 projects in various stages of development to drum up interest in providing capital. No developers or investors have yet announced any investments that stemmed directly from the high-profile gathering.

The government has tabled Bill C-39, the Building Canada Strong Act, sweeping legislation aimed at getting major projects built faster. The Liberals assert that the push for speed in approval decisions will not lower environmental and social standards. But some Indigenous groups, green activists and unions voice concerns that it could weaken consultation requirements, protections for nature and workers’ rights.

– Jeffrey Jones, Calgary

The progress: The number of international students and temporary workers has dropped significantly, as have asylum claims. In March, a law received royal assent restricting the right for an asylum hearing at Canada’s independent tribunal only to people who have been in Canada for less than a year. This led to many asylum seekers being put on a fast track to deportation, and has sparked many court challenges.

In its November, 2025 immigration plan, the government slashed the number of temporary residents – particularly international students – that it plans to admit in the next three years. It froze the number of permanent residents to 380,000 a year for three years, down from 395,000 in 2025.

Also, Ottawa’s 2025 budget outlined an International Talent Attraction Strategy led by Immigration, Refugees, Citizenship Canada, which included efforts to attract health care workers from abroad.

Within days, Immigration Minister Lena Metlege Diab is due to announce immigration targets for the next three years, including provincial nominee numbers.

The government is now coming under pressure from industry to create more places for skilled workers to settle in Canada to fill job gaps, including in construction. Representatives of the construction industry warn that a shortage of workers, including digger drivers, brick layers and carpenters, could hamper Mr. Carney’s ability to fulfill his ambition to build “major projects.”

Universities and colleges are also hoping that international student numbers will be increased. The drop has reduced a much-needed revenue stream for Canada’s higher education sector. Meanwhile, some provinces, including Alberta, Saskatchewan, Ontario and Newfoundland, have recently renewed calls for more control over immigration. Provinces, including Alberta and Saskatchewan, have also told Ottawa they want the power to nominate more immigrants for permanent residence in their provinces.

Ms. Metlege Diab recently announced changes to Canada’s Express Entry system, giving highly paid foreign nationals working in Canada – including doctors, engineers and programmers – an advantage when applying for permanent residence. Applicants to the Express Entry system will now receive additional points if they have worked for at least a year in a high-wage job in Canada or have a high-paid job offer.

Announcing the changes earlier this month, Ms. Metlege Diab said they would help the federal government identify, attract and retain skilled newcomers best positioned to succeed in Canada, while making the Express Entry system “more targeted and responsive to our labour-market needs.”

– Marie Woolf, Ottawa

The Progress: In order to expand the capabilities of the Navy’s submarine fleet, in July the federal government selected TKMS of Germany to be the preferred supplier for up to 12 submarines, although the government is now hedging on whether it will acquire 12 and it hasn’t booked the spending in the fiscal framework yet.

NATO’s 2025 commitments call for increasing core defence spending to 3.5 per cent of Gross Domestic Product from 2 per cent by 2035 and additionally demonstrating it’s spending another 1.5 per cent annually on security- and defence-related infrastructure. The government has not provided a plan for reaching 3.5 per cent nor has it showed its math on how it will be spending 1.5 per cent on strategic infrastructure with a dual civilian and military purpose, such as bridges, ports and roads, as well as cybersecurity and measures to protect energy pipelines.

In August, 2026, Mr. Carney announced Ottawa will spend $11.3-billion to build six new icebreakers for the Canadian Coast Guard in Quebec.

In an effort to improve procurement legislation to ensure Forces can “buy the equipment that they need, when they need it – which is now,” in October, the Liberals introduced Bill C-40. The bill turns the Defence Investment Agency into a Crown corporation and makes it nimbler and more autonomous, allowing it to move faster to procure military goods.

The government has a stated aim to create a “first-in-class drone capability that will build and deploy aquatic and airborne uncrewed vehicles to defend our arctic, our undersea infrastructure, our borders, and our allies.” It also would match this new capability with an industrial strategy that builds and perfects these technologies so that Canadian companies benefit from Canadian procurements.

Mr. Carney’s pledge is still a work in progress. The government set up the framework with its Feb. 17, 2026, Defence Industrial Strategy, which names drones and other uncrewed systems as one of ten sovereign capability priorities. Ottawa then launched the Defence Drone Initiative in July – a program run by National Defence and the Defence Investment Agency to speed up the development, testing and production of Canadian-made uncrewed and autonomous systems for the Armed Forces and the Coast Guard. It works as a pre-approved supplier list covering six areas: low-cost surveillance drones, ground robots, maritime and underwater systems, counter-drone interceptors, standardized drone munitions and long-range precision strike. On Sept. 10, the PMO announced a national drone marketplace and said it has awarded initial contracts worth up to $50-million that it says will increase the number of drones the Armed Forces have deployed tenfold, though no starting number was given.

– Steven Chase, Ottawa

The progress: A commitment to the free flow of goods across provinces marked the biggest leap in dismantling internal trade barriers over the past year. Ottawa brought provinces to the table and urged implementation of the Canadian Mutual Recognition Agreement, which took effect in January and which allows goods sold lawfully in one province to be sold in another.

But the services sector is where trade liberalization would offer the biggest economic gains, according to interprovincial trade researcher Trevor Tombe, and it’s where the biggest gaps remain. The most meaningful blockers, including occupational licensing, product standards and rules around alcohol and food, are in provincial hands.

Pledges on paper also haven’t matched facts on the ground when it came to direct-to-consumer alcohol sales. Commitments to remove red tape on interprovincial shipments of wine, beer and spirits led to a series of bilateral and trilateral agreements between provinces instead, often involving eye-watering markups.

– Mariya Postelnyak

The progress: Employee reductions appear to be on pace to meet the budget target. When the Treasury Board released its annual head count statistics for the public service in June, which are based on figures as of March 31, it showed there were 345,282 federal public servants, down from 357,965 the year before.

Last year’s budget announced funding for an early retirement incentive, which is meant to encourage voluntary departures and reduce the need for layoffs as departments meet their reduction targets.

The government received 10,006 early retirement applications as of the July 24 deadline, of which 9,694 have been confirmed to meet the program’s criteria, according to the Treasury Board.

– Bill Curry, Ottawa