Prime Minister Mark Carney’s first budget, which was tabled by Finance Minister François-Philippe Champagne on Nov. 4, strikes a careful balance between fiscal discipline and economic ambition.
“For the Association of Equipment Manufacturers (AEM) and its Canadian members, the budget offers promising signals on productivity, trade infrastructure, and workforce development,” said AEM’s Director of Government Affairs in Canada Alexandre Mattard-Michaud. “It also raises important questions about its implementation and political durability.”
Below is AEM’s analysis on how Canada’s new budget could impact equipment manufacturers.
Productivity and Capital Investment: A Welcome Boost
The introduction of a Productivity Super-Deduction would allow businesses to immediately expense all new capital investments, including manufacturing and processing buildings acquired after Budget Day and used before 2030. This measure, phased out gradually between 2030 and 2033, is a direct response to industry calls for accelerated depreciation to spur business investment.
In addition, enhancements to the Scientific Research and Experimental Development (SR&ED) program – including an increase in the annual expenditure limit for the enhanced credit from $4.5 million to $6 million – signal a renewed commitment to supporting innovation.
Infrastructure and Trade: Building for the Future
Budget 2025 proposes a sweeping $51 billion Build Communities Strong Fund over 10 years, aimed at supporting a wide range of infrastructure projects through provincial and municipal partnerships. This initiative, along with the $5 billion Trade Diversification Corridors Fund, is designed to strengthen Canada’s supply chains and improve access to global markets.
Of particular interest is the government’s plan to designate additional container ports in the Great Lakes-St. Lawrence region, including Québec City and Hamilton. This move could catalyze private investment and enhance export capacity for Canadian manufacturers.
The creation of a Strategic Exports Office at Global Affairs Canada further underscores the government’s intent to proactively support Canadian firms in navigating international markets – an important step toward addressing current global trade tensions.
Workforce Development: Addressing Labour Gaps
The budget also aims to address persistent labour shortages in skilled trades and manufacturing. It allocates $75 million over three years to expand the Union Training and Innovation Program and $97 million over five years to establish a Foreign Credential Recognition Action Fund focused on the health and construction sectors.
While these investments are welcome, AEM will be watching closely to ensure that similar support is extended to the manufacturing and equipment sectors, where labour shortages continue to constrain growth.
Procurement and Industrial Policy: A “Buy Canadian” Shift
In a notable shift, the government will implement regulatory changes to shield Buy Canadian procurement policies from review by the Canadian International Trade Tribunal. This move could open new opportunities for domestic manufacturers, though it may also invite scrutiny from international trade partners.
To learn more about AEM’s Canadian advocacy efforts, or to get engaged, please contact AEM’s Director of Government Affairs in Canada Alexandre Mattard-Michaud at amattard-michaud@aem.org.
