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On November 4, Prime Minister Carney’s Government announced its first budget since taking office this spring. The budget places a large focus on investing in infrastructure, reducing operational spending, and strengthening the economy by increasing productivity and competitiveness. The budget reflects the need for enhanced resiliency due to economic uncertainty caused by a fractured Canadian-US relationship. The current 2025-2026 deficit is projected to be $78.3 billion, decreasing gradually to $56.6 billion in 2029-2030. Since we are in a minority government, the budget will require support from at least some opposition members to pass.
Build Communities Strong Fund
Relevant to our members, the budget includes significant federal infrastructure investment through the Build Communities Strong Fund, which provides $51 billion over ten years, and an ongoing $3 billion per year in new and existing funding. This fund includes $17.2 billion in transfers to provinces and territories — and through them to municipalities — to support a wide range of infrastructure projects. However, to access these funds, provinces and territories must agree to:
- Cost-match federal funding;
- Substantially reduce development charges; and
- “Not levy other taxes that hinder housing supply”.
Of the $17.2 billion, $5 billion over three years will be dedicated to health infrastructure, such as hospitals, emergency rooms, urgent care centres, and medical schools.
The Build Communities Strong Fund is in addition to the previously announced $13 billion commitment to Build Canada Homes.
Community Stream
The existing Canada Community-Building Fund (formerly the gas tax) will be rebranded as the Community Stream under the Building Communities Fund, which will continue to provide $27 billion over 10 years, and an ongoing $3 billion per year to support local infrastructure projects.
The budget also includes examples of specific local community infrastructure projects that will be funded, including several community centres in Ontario municipalities.
Community & Social Programs
There are also several community and social program announcements for municipalities to be aware of. As previously announced, the budget proposes to continue the government’s $1 billion over five-year commitment to the National School Food Program and introduce legislation to provide $216.6 million per year to the program starting in 2029-2030. The government is increasing the Canada-Wide Early Learning and Child Care transfer payments by $600 million over the next four years, representing a 3% increase.
Municipalities Need Predictable Funding & Investment
As an Association, we will continue to advocate for municipalities to have access to predictable revenue streams, including adequate funding to address the infrastructure gap. We will continue to monitor the rollout of new programs and initiatives of member interest and look for opportunities to advance our advocacy with the Province.