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Federal Budget 2025: Canada Strong

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Department of Finance

Department of Finance: Francois-Philippe Champagne

Prime Minister Mark Carney’s first federal budget was delivered Tuesday afternoon shortly after 4 pm by Minister of Finance and National Revenue Francois-Philippe Champagne.

Go here for full documents and to find downloadable documents for the 405-page Budget. (The above screenshot is not enabled for downloading.)

Below is one of the first releases released by the Department of Finance website.  It’s followed with headlines and hyperlinks to the most recent Budget coverage in the Globe & Mail and National Post.

This blog may be revised as new updates arrive from various media sources.

 Government of Canada releases Budget 2025: Canada Strong

From: Department of Finance Canada

Canada’s new government puts forward a plan to build, protect, and empower Canada

November 4, 2025 – Ottawa, Ontario – Department of Finance Canada 

Canada faces a rapidly changing and increasingly uncertain world. The rules-based international order and the trading system that powered Canada’s prosperity for decades are being reshaped – hurting companies, displacing workers, causing major disruption and upheaval for Canadians.

In the face of global uncertainty, Canada’s new government is focused on what we can control. Budget 2025: Canada Strong is our plan to transform our economy from one that is reliant on a single trade partner, to one that is stronger, more self-sufficient, and more resilient to global shocks. Our plan builds on Canada’s strengths – world-class industries, skilled and talented workers, diverse trade partnerships, and a strong domestic market where Canadians can be our own best customers. We are creating an economy by Canadians, for Canadians.   

We are building Canada Strong. This is a plan to build the major infrastructure, homes, and industries that grow our economy and create lasting prosperity. This is a plan that will protect our communities, our borders, and our way of life. This is a plan to empower Canadians with better careers, strong public services, and a more affordable life. We are building a stronger economy, so that Canadians can build their own future.

To do that, Canada’s new government is delivering an investment budget. We are spending less on government operations – and investing more in the workers, businesses, and nation-building infrastructure that will grow our economy. Budget 2025 delivers on the government’s Comprehensive Expenditure Review to modernise government, improve efficiencies, and deliver better results and services for Canadians. It includes a total of $60 billion in savings and revenues over five years, and makes generational investments in housing, infrastructure, defence, productivity and competitiveness. These are the smart, strategic investments that will enable $1 trillion in total investments over the next five years through smarter public spending and stronger capital investment.

Countries across the world are facing global economic challenges – and Canada is no different. Budget 2025 is Canada’s new government’s plan to address these challenges from a position of strength, determination, and action. It is our plan to take control and build the future we want for ourselves, as a people and a country. It is our plan to build Canada Strong.

Quotes

“The global uncertainty we are facing demands bold action to secure Canada’s future. Budget 2025 is an investment budget. We are making generational investments to meet the moment and ensure our country doesn’t just weather this moment but thrives in it. This is our moment to build Canada Strong and our plan is clear – we will build our economy, protect our country, and empower you to get ahead. When we play to our strengths, we can create more for ourselves than can ever be taken away.”

The Honourable François-Philippe Champagne, Minister of Finance and National Revenue

Quick facts

  • Canada has the fiscal capacity to meet its ambition:
    • Canada has the lowest net debt-to-GDP ratio in the G7 at 13.3 per cent according to the IMF October 2025 Fiscal Monitor. Canada also has one of the lowest deficit-to-GDP ratios in the G7, second only to Japan. This strong fiscal position enables us to respond to global challenges.
    • Canada is one of only two G7 economies with a AAA credit rating, making Canada one of the best places to invest in the world.
    • Canada has the best deal of any U.S. trading partner, with 85 per cent of our trade tariff-free. While some sectors remain deeply impacted, overall, Canadian exporters benefit from the lowest average U.S. tariff of any country at 5.4 per cent.
  • Budget 2025 rests on two fiscal anchors:
    • Balancing day-to-day operating spending with revenues by 2028–29, shifting spending toward investments that grow the economy; and
    • Maintaining a declining deficit-to-GDP ratio to ensure disciplined fiscal management for future generations.
  • In addition to the two fiscal anchors, Budget 2025 enables $1 trillion in total investments over the next five years through smarter public spending and stronger capital investment.

 

Here are some headlines with hyperlinks in red to the latest Globe & Mail stories on the budget, for those with subscriptions to the paper.

—————- Continue Reading…

How to invest when the stock market is overvalued

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Image Pixabay/meineresterampe

By Mark Seed, myownadvisor

Special to Financial Independence Hub

Welcome to some new Weekend Reading about how I invest when the stock market is overvalued.

Continued inspiration for my investing approach (and related to the theme for this Weekend Reading edition) comes from this Humble Dollar article.

When most people are touting the stock market is “too high” to invest in, then, well, it probably is…

The challenge is, as I have personally experienced over the years as a DIY investor, there is no guarantee that all-time-highs don’t keep happening. You just don’t know when the party will end.

I recognized many, many years ago, I cannot time the market so I don’t even bother. Which makes my investing philosophy extremely simple when it comes to market highs or lows, I just keep buying when I have the money to do so.

That’s it. 

As the Humble article suggests, any market-timing strategies, appealing as they might seem are usually very unreliable in practice. And if you are unsure about whether you should invest at all, then at least prepare things could get worse.

“That’s why this is a good time — while the market is strong — to prepare, even if we can’t predict.”

Related to this theme, you might like this RBC article with this graphic for context.

Weekend Reading - How to invest when the stock market is overvalued

Source: RBC.

As part of other interesting reads this week I found:

When Should You Sell a Stock?, was published by Ben Carlson. From Ben:

“The truth is knowing when to sell a stock is more art than science.” Continue Reading…

Oh, How things have changed

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Image courtesy Outcome/Shutterstock

 

And it’s whispered that soon if we all call the tune
Then the piper will lead us to reason
And a new day will dawn for those who stand long
And the forests will echo with laughter

 

  • Stairway to Heaven, by Led Zeppelin

 

 

By Noah Solomon

Special to Financial Independence Hub

At the end of last year, the S&P 500 Index was valued at about 23 times estimated earnings over the coming year, which was significantly above its historical average. By mid-March of this year, the index had declined by roughly 10%, driven by unspectacular economic growth, inflation rates that remained stubbornly high, and related concerns that valuations reflected unwarranted optimism.

These growing concerns morphed into widespread panic on April 2nd, when the U.S. imposed tariffs on imported goods that were more severe than had been anticipated. Broad-based fears that tariffs would cause higher inflation, slower growth, or perhaps even a recession spurred a sharp drop in stock prices, with the S&P 500 falling another 5%, bringing its year-to-date loss to 15% at its low point on April 8th.

Fast forward to the present, and all is once again right in the world. The U.S. administration delayed many tariff deadlines, and those tariffs that have been imposed are below the levels that were initially announced. In addition, the feared inflationary impact of tariffs has not yet materialized. These better-than-expected developments have soothed markets, with the S&P 500 advancing 35% from its low point of the year, leaving its year-to-date gains at nearly 15% as of the end of September.

The trillion-dollar question is whether markets are currently reflecting realistic expectations. To the extent that sensible assumptions regarding risk and reward are embedded in current security prices, investors should stay the proverbial course. Conversely, portfolio adjustments are warranted if expectations are unreasonably optimistic.

Not all FOMO is Created Equal

Emotions and behavioral biases have exerted and will always exert a huge influence on investors’ decisions. Perhaps one of the most common among these is fear of missing out (FOMO), which is “the anxiety or apprehension that one is missing out on rewarding experiences, information, or events that others are having.”

Whereas FOMO can often be irrational, thereby leading to poor decisions and results, at times it can be a positive force, spurring investors to act in ways that can bolster returns.

Embracing vs. Shunning FOMO: It’s all about the Odds

 

Historically, when markets have been saturated with a “nothing can go wrong/it can only go up” mindset, returns over the ensuing several years have fallen somewhere between subpar and negative. In such environments, those who have tempered their FOMO have achieved better returns than those who have not. Conversely, when markets have been replete with a “things can only get worse/the sky is falling” mentality, returns over the next few years have been significantly higher than average. In such circumstances, investors who have embraced their FOMO have reaped significant rewards.

If only things were so simple

Clearly, you can achieve better than average results from taking less risk when prospective returns are below average and from taking more risk in environments where prospective returns are above average. Unfortunately, there is no precise gauge (or collection of gauges) that offer any degree of certainty or precision with respect to either of these extremes. Continue Reading…

Four ETFs to play the modern gold rush

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Pixabay/olenchic

• Gold is shining again; prices have surged to record highs this year and are forecast to climb further.

• Central banks are buying at a record pace, while investors seek protection from rising debt and currency debasement through gold ETFs.

• BMO’s gold ETF suite offers choice: ZGLD for stability, ZGD for growth, and ZJG for high-octane exposure.

Gold shines in 2025

By Erin Allen, Director, Online Distribution, BMO ETFs

(Sponsor Blog) 

Gold’s reputation as an ancient store of value has rarely felt more modern.

The metal has been one of 2025’s standout performers among major asset classes, surging to record highs of around US$3,900 per ounce as of September 2025. The rally has been fueled by central bank buying, rising fiscal concerns, and investors seeking protection from a weakening U.S. dollar.

BMO Capital Markets recently lifted its gold price forecasts to an average of US$3,900 for the final quarter of 2025 and US$4,400 for 2026, reflecting what analysts describe as structural changes in the geopolitical and financial landscape¹.

The key driver: debt. With deficits in the U.S., Japan, and Europe ballooning, gold is increasingly being viewed not just as a safe haven, but as a strategic hedge against long-term currency debasement.

In this piece, we unpack what’s driving gold’s renewed strength, assess whether it’s sustainable, and outline ways investors can gain exposure through BMO ETFs from the physical metal itself to large and small-cap miners.

Central banks are quietly building reserves

One of the biggest tailwinds for gold has been record levels of central bank buying.

According to Reuters, central banks now hold 36,000 tonnes of gold, having added more than 1,000 tonnes annually for three consecutive years². This surge reflects a broad reassessment of what constitutes a safe asset.

Geopolitical instability and questions over the long-term stability of U.S. Treasuries have prompted central banks to diversify reserves. Gold has even overtaken the euro to become the second-largest global reserve asset, and for the first time since 1996, represents a larger share of reserves than Treasuries².

Chart 1: Foreign central banks hold more gold than Treasuries

Gold fell from 75% to 15% of reserves; Treasuries rose and surpassed gold holdings around 2023 for central banks.

The World Gold Council notes that while emerging markets typically hold 5–25% of their reserves in gold, developed economies hold more than 70%³. This steady official-sector accumulation underscores the global shift to tangible assets amid growing fiscal and political uncertainty.

Trade tensions and currency debasement fears

Gold’s strength also reflects what Bloomberg calls the “debasement trade.” As government debt piles up and fiscal discipline erodes, investors are moving out of major currencies and into alternative stores of value such as gold, silver, and Bitcoin⁴.

The U.S. dollar is down roughly 8% year-to-date, while gold continues to post record highs. Bloomberg notes that the current cycle echoes previous bouts of U.S. dollar weakness following the global financial crisis and periods of aggressive monetary easing⁴.

As George Heppel, Vice President, Commodity Research at BMO Capital Markets, explains, both cyclical and structural forces are converging¹:

“What we’re really seeing this year is the combination of a short-term thesis and a long-term thesis for holding gold, which has created a perfect storm for the metal. And naturally all of this increases concerns around sticky or growing inflation and the potential for negative real rates next year, which makes gold an attractive asset to be holding as an inflation hedge,” he says.

With U.S. debt climbing and political gridlock persisting, investors have reason to question the durability of fiat currencies. Gold, with no counterparty risk and a finite supply, has reasserted its role as a monetary anchor.

According to the Congressional Budget Office (CBO), the recently passed One Big Beautiful Bill Act (OBBBA) – also known as the “Trump tax cuts” – will add an estimated US$19 trillion to U.S. debt over 30 years as written, or US$32 trillion if made permanent⁵.

“The passage of OBBBA will put tremendous pressure on the nation’s fiscal and economic health. Layered onto an already unsustainable outlook, the new law increases the risk of higher interest costs, slower growth, volatile markets, and reduced capacity to respond to future crises or invest in national priorities,” the CBO warned.

Chart 2: Debt soars under OBBBA

Projected U.S. debt-to-GDP rises sharply from 2025 to 2054, peaking at 219% under the highest scenario in the chart.

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Gold ETF demand surges to near-record levels

While central banks are leading the charge, investors are not far behind.

According to ETF.com, global gold ETFs have attracted US$44 billion in inflows this year, equivalent to roughly 443 metric tonnes of the metal⁶. That puts 2025 on track to rival the record US$49.5 billion set in 2020: the strongest year ever for gold-backed funds. Canada alone saw over $1B flow into commodity ETFs, largely driven by gold, according to National Bank of Canada’s September flows report.

Gold ETFs have become the preferred way to access gold, offering liquidity, transparency, and simplicity: all without the complications of physical storage.

Investment banks turn bullish

Institutional sentiment has followed suit.

BMO analysts believe the gold market is undergoing profound structural change, driven by debt, inflation, and de-dollarization. The bank has raised its long-term gold-price assumption to US$3,000 per ounce, up from US$2,200, placing it near the top of sell-side consensus¹. Continue Reading…

Almost six in ten Canadians worry they’ll run out of money in Retirement: especially women and young people

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The majority of Canadians are afraid they’ll run out of money in Retirement, especially women and young people, according to a survey released Wednesday morning by the Canada Pension Plan Investment Board (CPPIB).

The 2025 CPPIB Retirement Survey  (for Financial Literacy Month) says 59% of all Canadians are afraid of running out of money during Retirement, with the percentage jumping to 63% for women, compared to just 55% of men. It also found a whopping two thirds (66%) of Canadians aged 28 to 44 share the same fear. As the CPPIB graphic  below illustrates, those who have a financial plan are slightly less worried.

 

As you’d expect the CPPIB to point out, the Canada Pension Plan (CPP) helps protect retired Canadians from this risk: as it says above, CPP “benefits are payable as long as you live and [are] indexed to inflation.”

Indeed, CPP and the other main government retirement income program, Old Age Security, are both valuable sources of inflation-indexed retirement income. CPP is available as early as age 60 and OAS at 65 but a staple of Canadian personal finance commentary is that the longer you wait to receive benefits, the higher the benefits will be. In the best of all worlds, you’d wait until 70 for both programs to start paying out, even if you have to keep working longer and/or start withdrawing money from your RRSP before it’s mandated at age 71/72. (While the CPPIB doesn’t mention it, retirees with no other savings may also benefit from the Guaranteed Income Supplement to the OAS: and the GIS  is tax-free.)

The second graphic reproduced below is less straight-forward: it appears to present various excuses for delaying the creation of a proper financial plan to help get to Retirement. Roughly half of younger Canadians cite their need to advance their careers and make more money, and to buy their first home as priorities.


While it’s true that if nothing else, the future arrival of CPP and OAS benefits should put minds partially at ease about covering off basic Retirement expenses, it seems to me pretty obvious that at least for those who lack a generous employer-sponsored pension plan (ideally an inflation-indexed Defined Benefit pension), that it will be necessary to maximize savings in RRSPs and TFSAs as soon as possible.

Because of the Time Value of Money and the magic of compounding investment returns (especially when tax-deferred in RRSPs and TFSAs), the sooner you start saving in these vehicles the better. There’s no excuse not to make RRSP contributions from the get-go, ideally as soon as you land your first real job, since it reduces your income tax. Yes, decades from now when RRSPs become RRIFs you’ll have to pay some tax on the ultimate withdrawals, but that’s more than made up by the tax-deferred investment growth. Continue Reading…