Canada's government unveils its first budget on Tuesday, with PM Carney saying "bold risks" are needed to reform an economy facing economic threats from the US.

Canada's budget shortfall will more than double this year as Prime Minister Mark Carney pours billions of dollars to fight U.S. tariffs, boost defense spending and diversify trade, his maiden budget proposal showed on Tuesday.

Canadian Prime Minister Mark Carney's government presents its first budget on Tuesday, a spending plan he says will provide "the answer" for an economy starting to buckle under US tariffs.Specific details of the spending plan are being kept under wraps until the finance minister unveils the budget in parliament on Tuesday.

Canada is set to launch a C$50 billion ($35.5 billion) infrastructure fund to build projects in sectors such as hospitals, transportation and housing, as the government tries to boost an economy that’s being squeezed by US tariffs.

"Today, the Bank lowered the policy interest rate a further 25 basis points, bringing it to 2¼%. This was our second straight cut, and reflects ongoing weakness in the economy and contained inflationary pressures. "Today we also published our outlook for the Canadian economy.

A trade war with Canada might be less visible to Americans than one with China. But it has big impacts on both sides of the border, felt by U.S. households as prices for materials from metals to lumber jump.

Canada Prime Minister Mark Carney makes a live address on Canada’s plan to build a stronger economy in advance of the 2025 Budget, at the University of Ottawa in Ottawa on Wednesday, Oct. 22, 2025. (Sean Kilpatrick/The Canadian Press via AP) Canada Prime ...

The prime minister has promised "generational investments" and warned of "sacrifices" as he seeks to transform an economy upended by US tariffs.

The Canadian economy appears to be on track to eke out growth between July and September, likely bouncing back from a second-quarter contraction but remaining weakened by US tariffs.