Tuesdays budget will include billions in cuts, tax change meant to spur growth: source

Politics·UpdatedOn the eve of presenting his first budget, Finance Minister François-Philippe Champagne suggested the hotly anticipated document will include measures that even the opposition parties will see worth supporting.Liberals need opposition votes to get budget passed Listen to this articleEstimated 7 minutesPrime Minister Mark Carney’s government will present its first budget on Tuesday. (Sean Kilpatrick/The Canadian Press)Prime Minister Mark Carney’s first budget will include tens of billions of dollars in cuts and savings over the coming years and a change in the tax structure to promote competition, according to a senior Canadian official — as the government stares down a trade war with its once closest ally and a protracted cost of living crisis.For weeks Carney has been signalling that Tuesday’s budget, his first since coming into power this spring, will be marked by “sacrifices” while offering “generational investments.”Its tabling comes as Canadian industries — including steel, aluminum and the auto sector — continue to be battered by the trade war with the United States.The source, who spoke to CBC News on the condition they not be named since they were not authorized to speak about the budget before it’s public, said the changes to the tax structure are aimed at spurring growth and removing risks to invest in Canada. The source would not provide any more details about what those changes will look like.The source said there will also be updates to the capital cost allowance — an existing tax credit that businesses can use to write off depreciable property, such as buildings, machinery and vehicles.The budget is expected to include more money for defence after Canada promised to meet NATO’s target of two per cent of GDP spending by March 31, affordable housing and relief for workers affected by the U.S. President Donald Trump’s tariffs while reining in other spending that ballooned under the Trudeau government. WATCH | Carney says he’ll defend budget in an election if necessary:Carney says he’d defend budget in an election if necessary Prime Minister Mark Carney says he’s ‘100 per cent’ confident in his first budget and is prepared to defend it in an election if it doesn’t pass.The budget will be presented differently this year, with operational spending being separated from capital spending. Carney has said within three years the operational budget (day-to-day spending on government programs) will be balanced while boosting investments that build capital.The source who spoke to CBC News said the budget will point to tens of billions in targeted savings. Liberals scrapping 2 billion trees target: sourceThe official said the spending plan will provide an update on the comprehensive expenditure review that the federal government launched over the summer months to find internal savings.The official said that the expenditure review is anchored on three themes: streamlining delivery, recalibrating programs and modernizing operations.One cut will be the previous government’s promise to plant two billion trees by 2031, said the source. The official said the government will move forward with contracts that have already been signed to plant one billion trees.Former prime minister Justin Trudeau announced a planting initiative during the 2019 election campaign and earmarked $3.2 billion over 10 years for the program. The government has struggled to keep up with the commitment, missing its annual planting targets in the past two years. The senior source said Ottawa will reorient spending toward the “climate competitiveness strategy” Carney has hinted at to bring down emissions.While the budget may look differently this year, one number will still stand out: the deficit. It is expected to be double or more than the $42 billion projected a year ago with various forecasts and estimates suggesting it could be in the range of $70 billion to $100 billion.The stakes are high. Not only is Carney under pressure to right the slumping fiscal picture but he will also face a confidence vote.It’s still unclear if the minority government Liberals have drummed up the votes needed to survive and avoid a Christmas election.On Monday, Finance Minister François-Philippe Champagne helped make the new pair of shoes he’ll wear Tuesday. (Jacques Boissinot/The Canadian Press)Finance Minister François-Philippe Champagne appeared optimistic when he took the pre-budget tradition of buying a new pair of shoes to Boulet Boots, a family-owned manufacturer in Saint-Tite, Que., where he made his own pair of shoes with help from staff. Known for its cowboy boots, Boulet Boots also supplies footwear for the RCMP and Canada’s Armed Forces. Champagne walked away with black Oxford-style dress shoes.Champagne suggested the budget will include measures all Canadians, even the opposition parties, will support. “I think there’s something positive in the budget for all the political parties,” Champagne said in French, when asked about the minority government’s politically risky situation.Liberals need opposition votesThe Liberals came up three seats short of a majority, meaning they will need a few opposition MPs to either support or abstain when the budget vote comes — sometime in the coming weeks. In an interview with CBC News on Sunday, Conservative Leader Pierre Poilievre wouldn’t say whether his party will oppose the upcoming legislation. The Opposition leader said he needs to read the document before deciding.The Conservatives have a few key demands to the Liberals for the budget, like scrapping the industrial carbon tax and keeping the deficit below $42 billion.“I don’t have telepathic powers to tell you what’s in it,” Poilievre said on CBC’s Rosemary Barton Live.“If it were to bring down the cost of living — an affordable budget for an affordable living is something that I support.”The Bloc Québécois, and its 22 votes, has laid out what it calls non-negotiable demands that are likely a non-starter for a government that’s promised to rein in spending.In exchange for its votes, the Bloc wants to see increased Old Age Security payouts, more generous health transfers to the provinces, interest-free loans for first-time homebuyers and more infrastructure spending for Quebec and elsewhere. The Quebec sovereignist party has said there are no plans to abstain.Historically, the Liberals have turned to the NDP but interim Leader Don Davies said he wants to see where the cuts are before deciding. WATCH | Poilievre’s full interview on Rosemary Barton Live:FULL INTERVIEW | Pierre Poilievre speaks with CBC’s Rosemary Barton ahead of Tuesday’s federal budgetCBC News chief political correspondent Rosemary Barton asks Leader of the Official Opposition Pierre Poilievre what he needs to see in the upcoming budget to support it. They also discuss the disintegrating trade talks between Canada and the U.S. and if Poilievre is confident he will remain leader in an upcoming mandatory leadership review.“We have said that we want a budget that invests. Cutting good, family-sustaining jobs that exist in the public service at a time when we want to create jobs doesn’t seem right to us. But we’re going to see where the cuts are,” Davies said. He did not rule out a scenario in which some of the seven NDP MPs opt to vote neither for nor against the budget. “Abstentions are allowed,” he told Barton on Sunday. Off camera, sources tell CBC News both the Conservative and NDP caucuses are grappling with whether they want to be part of an effort to trigger an election by voting the budget down. One senior NDP source and two Conservative sources said last week some NDP MPs might abstain.What questions do you have about the upcoming federal budget? What would you like to see in it? Send an email to ask@cbc.ca.The move is being pitched as a face-saving measure for the NDP, which was decimated during the spring campaign and is in the midst of a leadership race, to stave off a costly election while being able to say they didn’t prop up the Liberals.Carney indicated on Saturday that he’s prepared to fight an election over his budget should it come to that.“This is not a game,” he said at the close of the APEC summit in South Korea.”I am 100 per cent confident that this budget is the right budget for this country at this moment.”ABOUT THE AUTHORCatharine Tunney is a reporter with CBC’s Parliament Hill bureau, where she covers national security and the RCMP. She worked previously for CBC in Nova Scotia. You can reach her at catharine.tunney@cbc.ca With files from J.P. Tasker and Darren Major