Canada seeks economic independence from US with $142 billion budget

Canada's Liberal government has put economic independence at the centre of its second budget. Finance Minister François-Philippe Champagne tabled Masters of Our Destiny in the House of Commons on Thursday, with the aim of attracting worldwide business investors and building major projects faster, reducing the nation's reliance on the United States. There are investments for affordability, essential measures to help Canadians meet ends as well as investments for security and Canadian arts and culture.

What is in the budget?

The plan sets out $142 billion in new spending over five years. On top of $9.5 billion since the spring economic update. Its central goal is to double exports to non-US markets by 2035. More than three-quarters of Canadian exports still go south. To bridge this, Ottawa will back ports, corridors and Arctic infrastructure through a $5 billion trade diversification fund and a $1 billion Arctic fund. It will also expand financing for exporters. More than $50 billion is earmarked to expand the electricity grid. The government also wants 70% of military contracts to go to Canadian firms.

The deficit is projected at $62.3 billion this year, about $3 billion below the spring forecast. Stronger revenue and tighter operating spending created the room for new spending. The budget also adds $22 billion in affordability measures, including a one-time top-up to the grocery and essentials benefit. Growth is forecast at just 1% in 2026. The federal prohibition on foreign purchases of existing residential properties has been extended to January 1, 2029.

Champagne said a stronger Canada is a better Canada "at any negotiating table." Dominic LeBlanc, the minister responsible for US trade, said tariff talks will remain with the White House, not Congress, despite Republican losses in this week's midterms. Canada withdrew from trade talks in August.

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The budget drew mixed reaction; NDP Leader Avi Lewis said sovereignty cannot be built on tax cuts for big business. Conservative Leader Pierre Poilievre said the first job should be saving Canadians money. Social-sector groups said their asks were largely ignored.

Why is Canada seeking to break free of US dependence?

During Trump's second term, Canada has seen layered tariffs on its businesses. The trade war remains active following a collapse in bilateral trade talks in August 2026, which prompted Trump to impose 50% tariffs and various import embargoes. The Carney government notes that it has set aside nearly C$44 billion in ongoing support for workers and businesses hit by US tariffs.

Apart from this, the US has on several occasions floated the idea of Canada as the "51st state" and Carney as “governor.”The pressure reached inside Canada. Alberta held a referendum on October 19 on whether to start a process toward a binding independence vote. Roughly three-quarters of voters chose to remain in Canada. Separatist and MAGA groups reported meeting with a US firm with government ties to help build a voter database. US Treasury Secretary Scott Bessent suggested oil-rich Alberta consider joining the US. Roughly three-quarters of voters chose to remain in Canada in the polling last month, quelling sustained polling support for independence.