Canada’s Liberal government plans to form a C$2 billion ($1.4bn) sovereign fund for critical minerals, earmark hundreds of millions in mining industry spending and widen exploration tax credits to a dozen other minerals, according to the federal budget presented on Tuesday.
The spending document, which forecasts a C$78.3 billion deficit for the fiscal year to March 31, includes plans to replace the industrial emissions cap. It also proposes incentives that may reduce the tax on capital spending — such as buildings for a critical minerals’ processor — to 0.4%, according to an analysis by CBC.
“Budget 2025 confirms the federal government’s unwavering commitment to the Critical Minerals Strategy released three years ago,” Mining Association of Canada CEO Pierre Gratton said in a statement. “These measures, taken together, send a powerful signal to the mining industry, global investors and Canada’s allies that Canada is very serious about improving the competitiveness of Canada’s mining industry.”
The budget, which has yet to be approved in Parliament, contains C$280 billion in capital investment spending and plans to cut 40,000 public sector jobs by fiscal 2028-29 to help pay for it. The budget deficit would fall to C$56.6 billion by 2029-30.
Prime Minister Mark Carney’s government has a minority of seats in Parliament and needs three votes from opposition lawmakers to pass the budget. Opposition parties such as the Conservatives, the Bloc Quebecois and the leftist New Democratic Party could try to vote down the budget to cause an election, though their appetite for a second national vote this year is unclear.
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