Carney’s second budget, “Masters of Our Destiny,” spends oil revenue on tax incentives, infrastructure and defense

Prime Minister Mark Carney’s government presented its second budget on Thursday, using higher oil revenue to spend on tax incentives and infrastructure¹. The 532-page budget, titled “Masters of Our Destiny,” asserts Canada’s sovereignty and vows to end homelessness³.

The plan earmarks billions of dollars for affordability and Canadian sovereignty⁴. It pours billions into housing and business⁵. Its title and its focus on sovereignty respond to the strain of Trump’s trade war with Canada^3,4. It also increases defense spending, with the government planning to spend C$2.3 billion².

The budget lays out a financial pathway to what the government calls an “investment supercycle” and major projects⁷. Those projects include the Deep Geological Repository for nuclear waste and two Arctic roads, the Mackenzie Valley Highway and the Grays Bay Road and Port⁷.

Why it matters to investors

The budget is designed to curb Canada’s reliance on the United States⁶. It arrives against the backdrop of Trump’s trade war with Canada^3,4 and a tariff war with Canada’s biggest trading partner⁵. A minister said Canada would continue to curb that reliance despite the Trump team’s crushing loss in the US midterm elections⁹.

The government also plans to reform bank ownership rules in a bid to stoke competition in the banking sector⁸. The smallest of the six largest domestic banks, National Bank of Canada, has about C$35 billion of shareholders’ equity⁸.

The defense measures follow a separate security push. The budget comes less than a week after the federal government released The Plan for a Stronger Canada, a national security strategy¹⁰. Investors are now weighing which stocks could benefit from Ottawa’s military spending push¹⁰.

What to watch

The fiscal plan lands as monetary policy is tightening. The Bank of Canada raised interest rates in October for the first time in three years, hoping to tame inflation caused by surging energy prices⁶. On the day the budget was presented, the central bank and the finance ministry also unveiled a new five-year monetary policy framework¹.

The bank ownership reform and the major-project pipeline are the measures with the most direct bearing on Canadian financial and industrial stocks^7,8. Both sit alongside the housing and business spending that makes this a big-spending budget^1,5.