Canadian Prime Minister Mark Carney is set to unveil his government’s first budget on Tuesday, a spending plan aimed at mitigating the impact of US tariffs on the country’s economy. Carney, a former central bank leader, has positioned himself as the ideal person to navigate Canada through the challenges posed by the Trump administration’s trade policies.

The US tariffs have had a significant effect on Canada, leading to increased unemployment and squeezing businesses in key sectors such as autos, aluminum, and steel. Carney has acknowledged the need for a new approach, stating that the budget will provide an answer to the question of how Canada can find growth despite the trade headwinds.

The Liberal government’s budget is expected to address the new geopolitical realities facing Canada, with a focus on defense spending and national projects that promote economic sovereignty. The government plans to increase defense spending to meet NATO targets and allocate funds to projects such as port expansion, energy production, and critical mineral extraction.

Finance Minister Francois-Philippe Champagne has described the budget as an “investment budget” aimed at building the Canada of tomorrow. The measures outlined in the budget are expected to reduce Canada’s reliance on the US, but Carney has cautioned that this transformation will not happen overnight.

The budget’s passage is not guaranteed, as Carney’s Liberals lack a majority in parliament and will need opposition support to pass the budget. The Conservatives, the largest opposition party, have made demands including deficit reduction, while the left-wing New Democrats may abstain from voting. Despite the uncertainty, University of Ottawa public policy expert Genevieve Tellier expects the deficit to be large and sees little chance of the government falling.

Carney has expressed confidence in his budget, stating that it is the right plan for the country at this moment. He has also shown willingness to defend his proposals in an election if necessary, emphasizing that the budget is not a game. The outcome of the budget vote will be closely watched, as it will have significant implications for Canada’s economic future and its relationship with the US.