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Major Budget Bill Changes Tax, Jobs, Defence

A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025

Summary

  • Creates a new Defence Investment Agency and overhauls the Defence Production Act to speed up defence procurement, enable grants/loans/equity for strategic defence and security supply chains, and set a presumption of competitive bidding with national-security exceptions.
  • Bans most non‑compete clauses in federally regulated workplaces (with narrow executive and sale-of-business exceptions) to improve labour mobility, entrepreneurship, and productivity; strengthens air passenger complaint resolution timelines and enforcement.
  • Implements the OECD global minimum tax (including the UTPR), modernizes numerous income tax credits (notably clean technology, hydrogen, and clean electricity), and raises Tax Court informal procedure limits to cut litigation time and costs.
  • Expands CRA and excise enforcement tools, extends some licence validity periods, prohibits bearer-form instruments at financial institutions, requires non‑discriminatory offering of deposit products, and raises CMHC’s mortgage-backed securities guarantee cap to $1 trillion.
  • Grants the Governor in Council broad "national interest" powers to cancel or block mineral rights in Nunavut with constrained compensation, and shifts pesticide re‑evaluation to a risk‑triggered model while committing to transparency and safety reviews.

Builder Assessment

Vote Yes

On balance, the bill advances productivity and industrial capacity through the non‑compete ban and a purpose‑built defence investment and procurement regime, while sharpening clean‑tech incentives. However, the Nunavut mineral‑rights cancellation powers, expanded compliance burdens, and higher mortgage guarantees pose material risks that should be corrected to fully align with growth, investment, and fiscal prudence.

  • Strengthen: implement defence procurement KPIs (time-to-award, time-to-field, cost variance) and public dashboards; keep national‑security exclusions tight and reviewable.
  • Fix: narrow Territorial Lands Act s.12.1 with clear, objective criteria, independent valuation, full and prompt compensation, and an appeal path to uphold investor certainty and northern development.
  • Safeguard taxpayers: pair the $1T CMHC cap with countercyclical capital buffers, explicit risk limits, and a public risk dashboard; sunset review after three years.
  • Enable growth: complement Pillar Two with investment-side offsets (accelerated CCA, loss carryback extensions, or broad pro‑investment rate relief) to maintain Canada’s competitiveness.
  • Cut friction: offset new CRA powers with service standards, independent review of non‑compliance notices, and a “right to be heard” before penalties; expand multi‑year licensing and digital-by-default filings across agencies.
  • Safety first: ensure the pesticide re‑evaluation shift maintains rigorous, transparent, science‑based risk triggers and adequate resources for timely action.

Question Period Cards

What measurable procurement speed and cost targets will the new Defence Investment Agency commit to, and by when, to demonstrate that defence projects will be delivered faster and at better value for taxpayers?

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Will the government amend the Territorial Lands Act changes to guarantee independent, fair‑market compensation and a right of review when mineral rights in Nunavut are cancelled in the name of the national interest, so investment is not driven out of the North?

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How will raising CMHC’s mortgage guarantee cap to $1 trillion avoid fueling housing inflation and moral hazard, and what concrete risk limits and stress‑test triggers will protect taxpayers in a downturn?

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Principles Analysis

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Canada should aim to be the world's most prosperous country.

Promotes prosperity via defence procurement modernization, non‑compete ban, and clean‑tech incentives, but risks long‑run prosperity with broad mineral-right cancellation powers in Nunavut and higher housing risk from the larger CMHC guarantee.

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Promote economic freedom, ambition, and breaking from bureaucratic inertia (reduce red tape).

Worker mobility improves markedly under the non‑compete ban and some filing/licensing processes are streamlined, yet new CRA penalties/stop‑the‑clock powers and carving Official Languages Act instruments out of red‑tape relief cut against deregulation.

✓

Drive national productivity and global competitiveness, including removing interprovincial trade barriers and improving labour mobility (one country, one market).

Labour mobility, faster defence procurement, and clearer clean‑tech/hydrogen incentives support productivity, supply‑chain resilience, and competitiveness.

✗

Grow exports of Canadian products and resources, and move up the value chain by processing resources domestically rather than exporting them raw.

Expansive authority to cancel or freeze mineral rights in Nunavut chills exploration and development, undermining future resource exports; the bill offers few direct trade‑facilitating measures to offset this.

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Encourage investment, innovation, and resource development.

Strong pro‑investment measures (defence financing tools, clean‑tech credits) are counterbalanced by the Nunavut national‑interest cancellation power that deters resource investment and by a global minimum top‑up tax that may reduce after‑tax returns for some MNEs.

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Deliver better public services at lower cost (government efficiency).

Centralizing defence procurement and fixing passenger complaint timelines improve service, but creating a new agency and expanding enforcement regimes add overhead; net efficiency gains are unclear absent costed KPIs.

✗

Reform taxes to incentivize work, risk-taking, and innovation.

Implements Pillar Two top‑up taxes without broad-based rate or structural relief that would incentivize work and risk‑taking; sectoral credits help targeted innovation but do not substitute for pro‑growth tax reform.

✓

Focus on large-scale prosperity, not incrementalism.

Major structural moves—non‑compete ban, a dedicated defence investment agency with financing tools, and a re-architected passenger rights process—go beyond incremental tweaks.

Did we get the builder vote wrong?

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C-31

PartyMinister of Finance and National Revenue
StatusAt second reading in the House of Commons
Last updatedN/A
TopicsClimate and Environment, Economics, Technology and Innovation, Labor and Employment, Housing and Urban Development, National Security, Public Lands, Indigenous Affairs, Social Welfare, Trade and Commerce
Parliament45