Finance Mandate Letter

Dear Minister,

Canadians have given us a clear mandate: to grow our economy, strengthen our sovereignty and build a country that works for everyone. They are ready to build Canada. Now, we must deliver. 

Our path forward is ambitious – and it must be. Global instability, and the accelerating pace of technological changes are testing our resilience. But Canadians are not afraid of hard work, nor are they afraid to take risks. They believe in fairness, in unity, and in building an abundant future for all Canadians. This government must match their resolve with urgency, discipline, and ambition.

I expect all Ministers to remain focused on their core mandate. Every ministry has clear goals focused on delivering better services and driving economic growth, while doing both with the efficiency and excellence Canadians deserve. That means setting clear goals, with measurable outcomes, and being relentless in execution. 

I expect Ministers to fulfill their mandates at a pace this country has not seen in recent history. Canadians expect and deserve change. It is the responsibility of our entire government to remove any roadblocks quickly and ensure the smooth and fast implementation of our priorities.

I expect you to do this by recruiting top talent, adopting best practices from around the world, and leveraging modern tools wherever possible, including artificial intelligence. Above all we must be ruthlessly pragmatic. If our policies are not achieving the results that Canadians deserve then we must change direction to achieve our goals. Through this, we can build a more modern government that delivers better results more efficiently.

As Minister of Finance, you will lead our transformation from a government that spends too much on operations to one that invests strategically in growth. For too long, our approach to fiscal policy has failed to distinguish between spending that merely maintains the status quo and investments that build lasting national wealth. We must break this pattern. Our operational expenses will be reduced and tightly managed, while our capital investments will be dramatically increased to build the strongest economy in the G7.

The problem is clear: The rate at which Canada invests in capital that could drive our economic potential – intellectual property, technology, and manufacturing production – dropped significantly in 2014 at the onset of a major global commodities recession and has not fully recovered.

Non-residential investment dropped from 14% of GDP in 2014 to 11% in 2024, undermining long-term growth and workers' wages. This decrease is driven by an environment where companies lack confidence in Canada as a long-term destination for their business. And the situation is likely to get much more strained as we negotiate our trade relationship with the U.S. To meet this moment, we must transform how we run our finances to focus our resources on building Canada's future. 

Success will be measured by how effectively we shift the balance from operational spending to capital formation while driving down our debt-to-GDP ratio through sustainable economic growth. Specifically, your goal is to increase capital-focused public and private investment to reach 17% of GDP by 2028, up from the current 11%, while eliminating the operating deficit.

Your tasks:

• Transform government spending priorities
  
  • Balance the operating budget by Budget 2028, while maintaining robust capital investment by reducing operational deficit from $15 billion to $0 by 2028
  • Ensure government debt-to-GDP declines consistently over the budget horizon reducing debt-to-GDP ratio by at least 0.5 percentage points annually
  • Establish new accounting practices that separate capital and operating expenses, with enhanced oversight powers for the Parliamentary Budget Office that is fully implemented by Q1 of 2026
  • Ensure all incremental government spending is focused on capital formation, with at least 50% of new expenditures being capital-related by 2027
• Drive strategic investment and economic growth
  
  • Reduce income taxes for the middle class by 1 percentage point, saving dual-income families up to $825 annually implemented by July 1st 2025
  • Create a $25 billion export credit facility to help Canadian businesses diversify from American markets launched by Q3 2025.
  • Extend immediate expensing for manufacturing, clean energy equipment, and zero-emission vehicles to support $90 billion in private investment over 5 years.
  • Increase the Scientific Research and Experimental Development (SR&ED) claimable amount to $6 million for Canadian companies to support $11 billion in private R&D over 5 years.
  • Recapitalize the Venture Capital Catalyst Initiative with $1 billion to catalyze investment in Canadian startups with funds ready by Q3 2025
• Ensure tax fairness and integrity
  
  • Conduct an expert review of the corporate tax system based on fairness, transparency, simplicity, sustainability, and competitiveness completed before Q1 2026
  • Lead international efforts to implement consistent global tax rules for multinational corporations with a new G7 agreement secured by 2027
  • Leverage technology at the Canada Revenue Agency to better identify and prosecute instances of tax evasion, fix loopholes, and strengthen enforcement with an aim to increase tax compliance by 7% by 2028
  • Provide automatic tax filing for low-income households and seniors to ensure they receive all benefits they're entitled to starting in the 2026 tax year.
• Build financial resilience amid economic uncertainty
  
  • Issue Canada's first transition bonds by 2027, raising at least $10 billion annually for industrial and agricultural sector transformation
  • Reduce the minimum RRIF withdrawal amount by 25% for one year to protect seniors' retirement savings during market volatility

We all know that our country could be so much more than it is. We have the land, the talent, the know-how, and the energy to be the most prosperous nation on earth. And our people have a spirit that could take them anywhere they want to go.

Now let’s build it.

Signed,

Prime Minister

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Note: Italicized figures are added by Build Canada

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