To the Point for the Week of May 11, 2025
PCs Table Budget 2025: Protecting Ontario – At a Price
Premier Doug Ford’s seventh budget landed at Queen’s Park today, and while the government is billing it as a shield against economic headwinds, the document is more about crisis management than bold new ideas. The headline is “A Plan to Protect Ontario,” but the subtext is clear: U.S. tariffs and a slowing economy have forced the PCs to lean on familiar tactics-spend more, promise more, and hope for better days.
The centrepiece is a $5 billion “Protect Ontario” fund, with $1 billion set aside for direct business relief and $4 billion for broader support programs. A $1.3 billion manufacturing tax credit and $11 billion in wage deferrals round out the package, all pitched as lifelines for sectors battered by American tariffs. The government is betting on stimulus, not austerity, but much of this spending was previewed in the fall economic statement or unveiled during the campaign.
Deficit spending is back in fashion. The deficit jumps to $14.6 billion for 2025, with the path to balance now pushed to 2027-28-at the earliest. Ford is sticking to his promise of no tax hikes or deep cuts, but with GDP growth forecast to slow and job losses mounting, the fiscal math is getting harder to square.
No Ford budget would be complete without a few headline-grabbing moves. This year, the government is doubling down on its fight against Toronto’s bike lanes, announcing the removal of two more routes-Queen’s Park Crescent and Avenue Road. Meanwhile, alcohol liberalization is proving costly. LCBO revenues have dropped from $2.5 billion to $1.9 billion, with alcohol tax revenue down by a third. The government is cutting mark-ups and taxes to keep prices low, but the fiscal hit is real and likely to grow.
Housing: Ambition Meets Reality
On housing, the pace of progress has slowed. The Ford government’s pledge to build 1.5 million homes by 2031 is slipping further out of reach. The budget projects an 18% drop in housing starts over the next three years, with just 229,000 new units expected between 2025 and 2027-well below the annual target. The government is “committed,” but the market remains sluggish, and critics are already calling for a course correction.
To address mounting pressure, the budget includes measures to streamline approvals and rein in development charges (DCs), which have soared across the GTA and now add $100,000 to $150,000 to the price of a new home. The government is moving to cut DCs by 50% in key municipalities and offer new discounts for purpose-built rentals and affordable housing. Non-profit and attainable units are now exempt, with further reductions for family-sized rentals. Still, the system remains complex, and with municipalities sitting on billions in unspent DC reserves, the impact of these tweaks remains to be seen.
The bottom line: The 2025 Ontario budget is defined by external shocks and internal caution. Old promises are recycled, spending is up, and the deficit is back with a vengeance. The Ford government is betting that more money and familiar moves will see Ontario through the tariff storm. But with housing targets missed and revenues falling, the sense is that crises has promoted caution, not reinvention.
Carney’s Cabinet: Out with the Old, in with the New. Sort of.
Prime Minister Mark Carney’s much-anticipated cabinet was unveiled at Rideau Hall this past Tuesday. In the lead-up to the ceremony, speculation swirled online over who was in and who was out. The most interesting chatter suggested Chrystia Freeland was on the outside looking in, potentially in line for a high-profile ambassadorship like the European Union. That would have required her to resign her seat, which seemed unlikely in the short term. But as new and familiar faces—Freeland, Melanie Joly, Steven Guilbeault, Sean Fraser—made their way up the Rideau Hall driveway, many began to question whether the Prime Minister was truly turning the page on the Trudeau era.
While there are several new faces in cabinet, the return of half of Trudeau’s team to critical portfolios, the elevation of controversial figures like Gregor Robertson, and the snubbing of experienced star candidates leaves much to be desired in the optics of “change.”
Foreign Affairs and Industry
Let’s start with Foreign Affairs. Anita Anand replaces Melanie Joly. Joly earned some credit for her response to Russia’s invasion of Ukraine, her support for Canada’s Euro-Atlantic role, and expanding Canada’s diplomatic footprint through new embassies and a Saudi Arabia reset. But her critics saw her primarily as an executor of PMO instructions.
Anand’s ministerial record is mixed, but she is widely respected for her international credibility, crisis management, policy execution, and attention to detail. Known as the “Queen of Preparation,” she brings discipline and pragmatism—skills that will be critical in a global environment marked by instability in Eastern Europe, South Asia, and a looming threat in the South China Sea.
As the first person of Indian origin to serve as Foreign Affairs Minister, Anand carries symbolic significance and potential strategic value. With Canada and India both seeking to diversify trade and realign partnerships in a shifting global order, her background could support renewed engagement. But challenges remain, especially around Sikh separatism and long-standing bilateral tensions.
Meanwhile, Joly stays in cabinet as Minister of Industry. She will have to manage the fallout from billions invested in electric vehicles—investments that, so far, are shedding jobs and draining public funds. Her performance here will matter.
Justice and Public Safety
Sean Fraser’s appointment as Minister of Justice and Attorney General is hard to read as anything other than a continuation of Trudeau-era policy. Fraser’s time overseeing immigration and housing was defined by back-to-back crises, and his performance on both files drew criticism from across the spectrum.
Here are a few of Fraser’s greatest hits:
Pushed demand-side housing solutions like the Housing Accelerator Fund while neglecting supply-side reform
Failed to align immigration rates with housing supply, despite a record number of construction workers
Presided over Canada becoming the most unaffordable housing market in the G7
On crime, the picture is equally troubling. Violent crime is no longer confined to major cities. Car thefts, home invasions, and random assaults are becoming common in suburbs and rural areas. Now Fraser oversees criminal justice. His voting record—support for bills C-5 and C-17, which rolled back mandatory minimums and reshaped Canada’s bail system—suggests no course correction is coming.
Finance and Trade
Carney has made it clear that he intends to govern more like a CEO. Under Trudeau, the PMO largely dictated legislative priorities. Carney is expected to be more hands-on, especially with foreign policy, finance, and trade.
That helps explain why François-Philippe Champagne is now at Finance and National Revenue. He’s not a policy wonk and lacks deep financial expertise, but he’s an excellent communicator, a skilled political operator, and someone who can toe the government line. Unlike Chrystia Freeland, who maintained some degree of independence at Finance, Champagne’s role will be to sell the government’s economic agenda and defend its tax administration.
His first test came quickly. Champagne announced the government would not table a formal budget and would instead deliver a Fall Economic Statement. He will need to explain how the Liberals plan to begin year one of a $130 billion, four-year spending plan—more than double what Trudeau pledged in Budget 2024—without a budget.
Given the scale of that spend and Champagne’s political strengths, his appointment makes sense. It also sheds light on why Carney passed over two former provincial finance ministers.
Carney also kept Dominic LeBlanc as Minister for Canada-US Trade and Intergovernmental Affairs. LeBlanc is experienced, pragmatic, and institutionally savvy. His deep relationships and steady hand will be critical as Ottawa navigates cross-border trade tensions and works to tear down interprovincial barriers.
Maninder Sidhu will take the lead on international trade. First elected in 2019, Sidhu is a former customs broker and trade adviser, with direct experience helping businesses navigate tariffs and access global markets. Having served as parliamentary secretary to both Foreign Affairs and the Minister of Export Promotion, he brings relevant background to the role.
Housing and Immigration
Development charges up 141 percent. Average home prices up 179 percent. And in Vancouver, you now need a six-figure income north of $200,000 just to entertain the idea of buying a home. These are the headlines from Gregor Robertson’s time as Vancouver mayor, and now he’s the Minister of Housing and Infrastructure.
Robertson’s appointment is drawing criticism across the political spectrum. Yes, Vancouver’s economy grew rapidly under his watch. But it was also the era of runaway housing costs. By 2018, the average detached home had nearly doubled in price. Condos and rents soared too.
Then there’s the immigration file, which directly affects housing. Carney appointed Lena Diab, former Nova Scotia immigration minister, to the role. Diab expanded immigration pathways during her provincial tenure, reversing population decline and filling key labour shortages in health care and the skilled trades.
But Canada’s immigration system is buckling. Housing supply is tight. Infrastructure is strained. Processing times are lagging. Diab will need to confront ballooning temporary resident numbers, new caps on permits, and a backlogged refugee system, all while maintaining economic momentum and public confidence. It’s not yet clear she’s the right person to do it.
Energy and the Environment
Carney is attempting a balancing act: drive growth through resource development while embedding climate action across Canada’s economic strategy. His environment and energy picks reflect that ambition.
Julie Dabrusin replaces Guilbeault at Environment and Climate Change, but don’t expect major shifts. A Guilbeault protégé, she supports carbon pricing, bans on single-use plastics, and a long-term wind-down of fossil fuel production. That includes phasing out the oil sands.
Tim Hodgson, meanwhile, steps in at Energy and Natural Resources. With roots in both Bay Street and Alberta’s oil patch, Hodgson adds private-sector credibility to Carney’s team. His appointment signals a desire to regain industry confidence and unlock stalled investment. Carney has floated revisiting Bill C-69 and the emissions cap, policies Hodgson may be tasked with softening. Whether he and Dabrusin can work together remains to be seen. Guilbeault made that harder after declaring new pipelines a non-starter.
What to Make of Carney’s Cabinet?
Canadians wanted change. Carney promised to deliver it. Instead, his cabinet features half of Trudeau’s old guard, controversial retreads, and sidelined star candidates.
There is still time for Carney to course correct. Time will tell.
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