Austerity incoming? Carney pledges to balance operating budget in three years

Prime Minister Mark Carney pledged Wednesday to balance Canada’s operating budget within three years, marking a sharp fiscal shift that drew comparisons to conservative economic policy.

Source: Facebook (Mark Carney)

Prime Minister Mark Carney pledged Wednesday to balance Canada’s operating budget within three years, marking a sharp fiscal shift that drew comparisons to conservative economic policy and signalled a new tone for his Liberal government.

In a rare national address, Carney told Canadians the government would move away from persistent deficits and impose discipline on federal spending. “We will make the government leaner and more focused,” he said. “The operating budget of this country will be balanced within three years and it will stay balanced.”

The commitment came as Carney warned that Canada is at a “hinge moment” in its history, facing global instability, economic realignment and rising trade friction with the United States.

He repeated his line that the decades-long deepening of Canada-U.S. economic ties is “now over,” citing American tariffs on sectors like autos, steel and lumber.

Earlier in the day, Conservative Leader Pierre Poilievre met privately with Carney and pressed for a shift away from what he described as a decade of “inflationary deficits and taxes.” Speaking to reporters afterward, Poilievre said Canadians are “tapped out” and that the prime minister must “reverse course on the costly decade of deficit spending that has given us more expensive food and housing.”

Poilievre called for a “common-sense cap on immigration.” Arguing that current levels are unsustainable, Carney said his government would bring the levels “under control,” noting that asylum claims and temporary foreign worker entries were down since July.

Poilievre did not say whether his party could support the upcoming fiscal plan but laid out expectations for lower taxes and tighter spending. “If the Prime Minister is serious about making Canada a more affordable country, then he needs to bring forward an affordable budget,” he said.

Carney’s evening address outlined a broader vision for national renewal, with a focus on energy independence, defence spending, infrastructure investment and skills-based immigration reform, all under what he described as a “disciplined fiscal framework.” The 2025 federal budget is scheduled for release on November 4.

Carney said the government will prioritize domestic industries through a new “Buy Canadian” procurement strategy and confirmed immigration levels are being reduced to relieve pressure on housing and services.

He cast the moment as one of national sacrifice and urgency, urging Canadians to rally behind a collective economic recovery.

“The hinge of fate will turn on what Canada does right now,” he said. “We must build, protect, and empower and do it within our means.”

Whether Carney’s shift satisfies critics remains to be seen. Poilievre noted that Carney had made no commitments during their discussion, adding that government spending “has been out of control since he took office.”

The government says the coming budget will lay out the first steps toward reaching balance by 2028.