Prime Minister Mark Carney is set to present his government’s first budget on Tuesday, which aims to address several pressing economic challenges facing Canada. During a recent speech to university students, Carney emphasized the need for bold action to restore the future for young Canadians. "It’s our country; it’s your future," he stated, indicating that the budget will outline a new economic path amid a more hostile global environment.

The upcoming budget is expected to tackle issues such as attracting investment, trade diversification, skills development, affordability, and defense spending. Carney has described the budget as potentially "generational" in its significance, with a focus on catalyzing unprecedented investments in Canada over the next five years.

**Investment Attraction** Canada has struggled to attract corporate investment due to declining competitiveness, slow project approvals, and high input costs. Carney acknowledged these challenges, stating, "The core of our budget strategy will be to catalyze unprecedented investments in Canada over the next five years." The budget is anticipated to include measures that allow businesses to write off new machinery and capital costs more aggressively, responding to trade tensions with the U.S. and China.

Additionally, the government may consider suspending changes to the Accelerated Investment Incentive or cutting corporate taxes to enhance competitiveness. A new office has been established to expedite approvals for major projects, and further project approvals are expected in the budget.

**Trade Diversification** The budget will also address the need for Canada to diversify its trade relationships, particularly in light of tariffs imposed by the U.S. on various sectors. Carney has set a goal to double non-U.S. exports over the next decade. However, economists caution that changing established trade patterns is complex. Despite efforts to promote trade diversification, approximately 76% of Canadian exports still go to the U.S., a figure unchanged over the past decade.

**Skills Development** The Canadian economy requires more skilled workers, including engineers and tradespeople. The budget is likely to announce funding for apprenticeships and skills training programs, as well as initiatives to improve foreign credential recognition. This is part of a broader strategy to enhance Canada’s workforce and address labor shortages in critical sectors.

**Affordability Concerns** Canadians are facing rising inflation, particularly in food and housing costs. The government has already introduced measures such as the $13-billion Build Canada Homes program and tax cuts for first-time homebuyers. The budget is expected to include additional strategies to alleviate financial pressures on Canadians, who are increasingly struggling to make ends meet.

**Defense and Security** In response to changing global dynamics, Carney has committed to increasing Canada’s defense spending to meet NATO targets. The budget is anticipated to outline a significant investment in military capabilities, including a recent $9-billion commitment to the Canadian Armed Forces and plans for advanced radar systems.

As the budget is unveiled, Canadians will be looking for concrete steps that address these critical issues and provide a clearer vision for the country’s economic future.