Top Lines

  • Liberal budget offers reassurance for big corporations, empty/vague promises for everyone else.
  • Government wrongly assumes what’s good for companies is good for working people.
  • Budget 2025 prioritizes big business while ignoring concrete solutions for workers and their loved ones.

Overview

The Liberals expect our members, friends and neighbours to swallow austerity while they give handouts to the rich and big corporations.

This budget will put 40,000 public servants out of work over the next four years. They let key funding expire, leaving care workers overworked and underpaid. They’ve left major gaps in EI, health care funding, child care, and long term care unfilled – but found the time to give wealthy people a tax break on private jets and empty rental properties.

Carney promised transformative change, but he gave us tweaks and half measures instead.

They’ve chosen the status quo on childcare funding, doing little for parents without a spot for their kids. Our members will benefit from the Personal Support Workers (PSW) tax credit, fixing misclassifications, and restricting non-compete clauses – but this does not address larger problems, like the need for real wage increases, and the rampant abuse of Section 107.

CUPE welcomes key investments in the north and Indigenous infrastructure. However, we are concerned by the government’s wider approach to major infrastructure projects, that prioritizes investment opportunities for big business over tangible benefits for our communities.

We are encouraged to see some much-needed investment in community and health infrastructure, but the majority of these investments are reprofiled from existing spending, and any benefits are overshadowed by the aggressive push towards further privatization in various forms.

They have put forward major proposals with few details, promoting public private partnerships and a one-size fits all approach on AI, housing, energy, and community infrastructure – we cannot get behind these plans without clear indication of how they will benefit workers and their communities.

Privatization

Budget 2025 advances the pro-privatization agenda at a rapid pace. It is a missed opportunity to make needed investments in public services and publicly delivered infrastructure.

The Canada Infrastructure Bank’s (CIB) statutory capital envelope is getting a $10 billion boost to fund “nation-building projects” referred to the Major Projects Office. The explicit intention is to increase the number of projects with private investment – a failed model that results in worse services, worse jobs, and higher costs.

Some capital investment funding announcements throughout this budget incentivize privatization of public infrastructure. For example, the $6 billion over 10 years to support regionally significant projects requires municipalities to seek private partners, and the federal government is opening the door for large airports to be partially privatized.

Municipalities and Community Infrastructure Funding

Budget 2025 announces $51 billion for the Build Communities Strong Fund, however most of this is not new funding. Most of the $51 billion comes from re-profiled spending that municipalities had already incorporated into their capital investment plans, such as the Canada Housing Infrastructure Fund.

The new Build Communities Strong Fund will be administered by Housing, Infrastructure and Communities Canada. Some of the funding will flow through provincial and territorial governments to municipalities.

There are three streams:

  •  A provincial and territorial stream of $17.2 billion over 10 years, starting in 2026-27, to support housing-enabling infrastructure (e.g., roads, water/wastewater), health-related infrastructure (e.g., hospitals), and infrastructure at colleges and universities. To access funds, provinces and territories must agree to cost-match federal funding and to substantially reduce development charges and not levy other taxes that hinder the housing supply. This is a subsidy to developers and real estate holdings companies and reduces provincial and territorial tax revenue. The provincial and territorial stream sets aside $5 billion for a Health Infrastructure Fund. The requirement related to development charges and other taxes will not apply to this portion of the fund. This will help provinces and territories build much needed health care infrastructure.
  • A direct delivery stream will provide $6 billion over 10 years, starting in 2026-27, to support regionally significant projects, large building retrofits, climate adaptation, and community infrastructure. Projects proposed under this stream are required to seek private sector investment, including private investment leveraged through Canada Infrastructure Bank financing, before being eligible for funding under this stream. This is privatization of public infrastructure. It also makes it difficult for small municipalities to access the funding since they do not necessarily have the capacity or connections to meet this requirement.
  • The existing Canada Community-Building Fund will be rebranded as the initiative’s community stream. This stream will, as planned, provide $27.8 billion over 10 years, starting in 2026-27, and $3.0 billion per year ongoing to support local infrastructure projects. The current issues with the application process for this funding have not been resolved.

A positive element of this announcement is that the federal government will consider factors such as the use of unionised labour, and the use of Community Employment Benefits agreements in allocating funding to projects.

Additionally, there is new funding of $1 billion over four years for an Arctic Infrastructure Fund, and $5 billion over seven years for a trade diversification corridors fund, which municipalities will be eligible for.

Budget 2025 also renews the First Nations Water and Wastewater Enhanced Program, with proposed funding of $2.3 billion over 3 years starting 2026-27. This should maintain progress on approximately 800 active projects, and continue work toward ending water advisories.

Housing

Budget 2025 included very few new announcements of funding for housing. While promising, the federal government still has not released details on how Build Canada Homes will operate. Check out our checklist for Build Canada Homes here. We need targets and timelines for the federal government to fund and finance non-market housing providers to build 50,000 new social housing units each year for 10 years.

The budget fails to ensure the federal government plays a leadership role in ensuring protections for tenants including rent and vacancy control. It also does nothing to address the financialization in the sector where large corporations are profiting from our housing system. 

Health Care

Budget 2025 maintains projected funding for Health (CHT) Transfer from 2025-26 through to 2027-28, but cuts $300 million per year in 2028-29 and 2029-30. Future funding increases in CHT will be tied to a 3-year moving average of nominal Gross Domestic Product (GDP) growth, with a minimum guarantee of 3%. This is a concern, since nominal GDP is not a good reflection of health care inflation costs. Inflation and an aging population will mean that the real cost of maintaining service levels will be higher than nominal GDP increases, so it is not a good indicator of actual economic needs for health care or public services. An additional $600 million per year in transfers for long-term care funding is unchanged, but this funding is being allowed to expire after 2027-28.

Because of these changes, the share of federal funding going to provincial and territorial health budget is set to decrease over next 5 years. This budget also has no mention of upholding the Canada Health Act or of implementing long-term care standards, meaning that the rampant privatization in health care will be allowed to continue.

CUPE is deeply concerned by these cuts to Health Care Transfers, which are even worse than anticipated. If provincial and territorial governments are not able or willing to fill this funding gap it will likely lead to job losses, negative impact to wages and benefits, increasing workloads, and increasing risks at work and burnout of members.

There is very little information on Pharmacare or Dental Care in the budget. Spending on both programs is unchanged, but the budget mentions possible expansion for both programs, with no details about how that would be accomplished. CUPE was looking for more federal measures and funding to support the expansion of these vital programs. CUPE will continue advocating for the expansion of both pharmacare and dental care programs that are crucial for many CUPE members.

Budget 2025 announces a temporary refundable tax credit for personal support workers (PSWs). Most of the $1.48 billion allocated to this program comes from funding previously committed to support wage increases for personal support workers. Only three regions signed bilateral agreements under that program, British Columbia for $232 million, Newfoundland and Labrador for $25 million, and the Northwest Territories $5.3 million. Eligible personal support workers employed in the remaining provinces and territories will be able to claim a refundable tax credit equal to 5% of their eligible earnings, providing support of up to $1,100 per year. Although a temporary program, the PSW tax credit will benefit CUPE members. However, we will continue to advocate for more federal measures to support real and permanent wage increases for PSWs.

Child care

CUPE wants to see the Canada Wide Early Learning and Child Care program succeed. So far, it is falling short of delivering child care to every family who needs it. In order to expand access, the government needed to make significant investments in child care infrastructure and the child care workforce.

CUPE called for $10 billion over the next five years dedicated to recruitment and retention of child care workers through provincial transfers earmarked for improving wages, pensions, and benefits. CUPE also called for a boost to the existing Early Learning and Child Care Infrastructure Fund by $15 billion over the next five years. We have long argued that all federal capital child care funding should be directed to non-profit child care providers, public sector entities, or Indigenous governments and organizations.

The government maintained child care funding to previous announced levels, approximately $8 billion per year, including $625 million for the Infrastructure Fund – far short of what’s needed to meet the target of 65% of children under six being able to access licensed funded child care. There was no mention of limiting this funding to public and non-profit expansion, though the federal government could still require provinces to cap private child care in the yet to be negotiated action plans and bilaterial agreements.

CUPE members currently accessing child care will be breathing a sigh of relief. Protecting existing funding was a crucial though insufficient step to keep parent fees low. However, those who cannot find care for their children will not be helped by this status quo funding. Budget 2025 does far too little for members working in the sector, especially those in provinces that have not introduced sufficient pensions, benefits, and wages. Without the needed supports to keep workers in the sector, waitlists will continue to grow.

Artificial Intelligence

Budget 2025 did not put in place the measures needed to protect workers from the risks of artificial intelligence, like a Canadian Observatory on AI and Work or signal laws and regulation to protect workers in addressing the risks of AI in the workplace. 

Sovereign public AI infrastructure that provides computing resources for AI systems should be prioritized for public sector needs. Sensitive public data about health care, education and immigration should be stored on publicly-owned servers on Canadian territory. The federal government should go beyond compute to building sovereign public AI models developed with Canadian training data under a robust privacy and AI legislative framework. 

It’s a concern that the federal government will sign additional Memorandums of Understanding (MOUs) with AI corporations that want to profit from the public sector. The federal government should work with workers and trade unions on digital tools to augment workers’ capacity rather than cut jobs and privatize public services. The federal government is choosing the low road in looking to implement AI in a way that will cut jobs and harm the public. 

CUPE is pleased the Artificial Intelligence and Technology Measurement Program (TechStat) is being implemented by Statistics Canada. The program will improve data collection on the impacts of AI on the workforce. We do not currently have the data to assess how AI is affecting the workforce. Trade unions should be involved in the development of these data collection tools to ensure it provides the necessary information to guide policy and protections for workers. This should be accompanied by an Observatory on the Impact of AI on Work.

Transportation Sector

Budget 2025 addresses the crisis in Canada’s airport infrastructure by measures that attract private sector investment, including by negotiating lease extensions with airport authorities, enabling more economic development activities on airport lands, and examining the existing airport ground lease rent formulas.

The government’s objective is to ensure the “long-term sustainability and competitiveness” of Canada’s airports. However, this is a form of privatization of airports and will result in higher costs for airport users and Canadians.

CUPE is pleased to see two budget announcements related to public infrastructure investments, specifically the Airports Capital Assistance Program and the Arctic Infrastructure Fund. Both initiatives have the potential to improve access and services, including access to regional airports and transportation options in the north.

Media and Telecommunications

CUPE was looking for a stable and modestly increasing budget for the National Film Board (NFB). Instead, the NFB faces an operational cut of $31.3 million over 4 years, adding stress on top of the 2024 layoff of over 50 employees. At the same time the NFB is receiving an additional $26.1 million (over 4 years) for investment in Canadian creators and the economy. This means that there is a risk that none of the new money allocated to the NFB will go to the workers who operate the NFB, and instead the funding is used to privatize the public service CUPE members have been providing for years. After facing multiple rounds of cuts, there is little room to trim the operations of the NFB without compromising its critical public mission.

CUPE was also looking for more support for Canadian broadcasters in this budget through expansion of the Canadian journalism labour tax credit to broadcasters and strengthening of the Income Tax Act. The federal government may be waiting for the outcome of a legal challenge to the Canadian Radio-Television and Telecommunication Commission’s (CRTC) application of the Broadcasting Act – an attempt to get online streaming platforms to pay for news content on their websites. Unfortunately, the longer the delay in acting to support Canadian media broadcasters, the greater the risk of further job losses in the sector due to the lack of support.

Social Services

The Canada Social Transfer (CST) is the third largest federal block transfer payment to the provinces and territories, after the Canada Health Transfer and equalization payments. It provides funding to support post-secondary education, social assistance, social services, early childhood development, early learning, and child care.

Since 2009-10, funding has been legislated to increase by 3% each year until 2027. From 2021 to 2023, the rate of inflation outpaced the annual increase to the CST, which means the real value of the CST and the purchasing power of that funding has eroded. A higher level of funding is badly needed to increase support for public and non-profit social service organizations/agencies to address problems the sector is experiencing across the country.

Unfortunately, Budget 2025 maintains CST funding increases at 3% per year to 2027, as previously legislated, and is projected to continue to increase by 3% per year until 2030. There is no funding tied to a much-needed labour force strategy for community services and the non-profit sector.

Budget 2025 offers a one-time supplemental Canada Disability Benefit payment of $150 to help offset the costs of applying for the benefit. As well, the Liberals propose exempting the Canada Disability Benefit from being considered income under the Income Tax Act, so recipients will not have to pay tax on this benefit.

Education (Post-Secondary and K-12)

Budget 2025 makes no meaningful progress on addressing the funding crisis plaguing post-secondary institutions across Canada. The Tri-Council funding agencies (Social Sciences and Humanities Research Council [SSHRC], Natural Sciences and Engineering Research Council [NSERC], Canadian Institutes of Health Research [CIHR]), will have available grant funding cut by 2%, undermining the hard-fought increases promised in Budget 2024. While colleges and universities will technically be eligible for funding via the provincial and territorial stream of the new “Build Communities Strong Fund,” the eligibility requirements include seeking private investment, furthering creeping privatization in the post-secondary sector.

Another puzzling announcement is the Carney government’s “International Talent Attraction Strategy and Action Plan,” which appears to be aimed primarily at recruiting researchers from the US. This “strategy” does nothing to address the health of the broader post-secondary ecosystem, or ensure that current or future post-secondary workers have the stability and support they need.   

CUPE is dismayed by the Federal government’s inaction around addressing its blanket freeze on funds allocated under Jordan’s Principle for off-reserve Indigenous children. With constant cuts to provincial funding, schools had been relying on Jordan’s Principle dollars to fill in gaps. The combination of provincial underfunding and federal freeze on funding will result in hundreds of job losses, and uncertainty for families and communities about whether their children will get the support they need to succeed in school. While some reform of the funding process may be necessary, this should not come at the expense of education workers jobs, or family and community supports. Budget 2025 makes no acknowledgement of the need to release these funds to ensure adequate funding for the specialized Indigenous supports that Jordan’s Principle was intended to protect.

Environment

The climate competitiveness strategy shows that the government’s priority is corporate handouts to the oil and gas sector over meaningful climate action. There are tax breaks for so-called “low-carbon” LNG and carbon capture and storage while workers are completely left aside – there are no references to sustainable jobs or a just transition for workers. 

The government is walking away from the oil and gas emissions cap while failing to provide details about its promise to improve industrial carbon pricing. References to future changes to the role out of other key climate policies also lack details but hint at a further backtracking on climate commitments.

The creation of a $40 million Youth Climate Corps will create some good, green jobs for youth but is far too little to make a meaningful impact.

Energy

For this year’s budget, CUPE was advocating for investments in east to west electrical transmission infrastructure. Any new linkage projects should be publicly owned and operated. Though the Federal Government recognizes the need for an influx of new, clean, electricity supply, and the need to expand electricity links between provinces, they do not commit funding for an east-west grid. Instead, the federal government is focusing on publicly financing the oil and gas sector, in a climate change context where we know we must be focusing our public funding on renewable energy.

The budget also re-announces $3 billion in funding to construct and operate four Small Modular Reactors at the Darlington New Nuclear Project site in Bowmanville, Ontario. The project appears to be a design-build partnership with GE Hitachi, with the public sector financing the project and retaining ownership and operations. The announcement noted that this project would sustain 3,700 jobs annually, including 18,000 during construction, for 65 years. The federal government slots this announcement under their clean energy initiatives. Questions remain about how much money the Government of Ontario stands to make from the international commercialization of SMR technology, or the labour strategy underpinning the job creation announcement.

Employment Insurance and Training

Budget 2025 does not put in place the reforms to employment insurance to make it more accessible or livable for workers. 

CUPE is pleased that the federal government extended the temporary Employment Insurance (EI) measures including suspending the one week waiting period and suspending the rules on separation payments so that workers can keep severance pay while receiving EI benefits. The federal government must also close loopholes that exclude workers from EI benefits when they are laid off during or shortly after maternity leave.

The federal government should revise the Canada Training Benefit and EI Training Support Benefit to include precarious workers and increase EI part II training to a minimum of 26 weeks to support enrollment in programs that will result in certifiable skills in in-demand fields. Workers who voluntarily separate from work should also be able to qualify for EI training programs in related fields such (i.e. Personal Support Workers (PSWs) could train to be a Licensed Practical Nurse (LPNs) and childcare support staff as Early Childhood Educator (ECEs).

Budget 2025 reannounces an additional $570 million over three years in Labour Market Development Agreements with provinces and territories to support training and job assistance for workers impacted by tariffs and global market shifts. This is far short of what was required, and does not make up for previous budget cuts to spending for training.

There is also an investment of $382.9 million over five years to launch the new Workforce Alliance. The new program will bring together employers, unions, and industry groups. A new Workforce Innovation Fund will invest in local projects to help selected sectors and regions recruit and retain workers, and new national training platform will be launched with private-sector partners to connect people to job opportunities. This is unlikely to meet the need sectors face in the current moment.

Labour legislation

While CUPE is not opposed to Budget 2025’s proposals for addressing worker misclassification in federally-regulated sectors, these measures do not address critical shortcomings in the Canada Labour Code, which we have brought to the government’s attention on multiple occasions. Specifically, we are disappointed by the government’s inaction around amending Part III of the Canada Labour Code to clarify that wages are owed as soon as duties start – a simple legislative amendment that could end unpaid work in the airlines sector without a costly “probe” into this well-documented issue.

CUPE supports the federal government’s proposals related to information sharing between the Canada Revenue Agency (CRA) and Economic and Social Development Canada (ESDC) for the purposes of the administration and enforcement of the Canada Labour Code as it relates to the classification of workers. However, this initiative is yet another example of the Liberals’ inadequate strategic planning because there is a lack of personnel to enforce Canada Labour Code violations. Put simply, increased penalties for violations are pointless if there is no enforcement of said penalties.

Public service pensions

The federal budget announces consultations around equitable public sector benefits.

Details are sparse, but the end result is that the 2016 Canada Pension Plan (CPP) expansion will not benefit public sector pension plan members. The federal pension plan is modest and in significant surplus. This action will lower government contributions permanently – there is no question, this is an attack on the federal public sector pension plan.

The federal government will also be funding their early retirement incentive out of the current surplus in the pension plan. These initiatives are disingenuously described as “Equitable Public Sector Retirement Benefits” in Budget 2025, which obscures the fact that Carney’s government is planning to cut the federal public sector pension plan. Budget 2025 frames these public-sector related pension changes as “savings” for the workers they will impact, which is a classic tactic used by employers to frame pension cuts as beneficial for members.

CUPE condemns these pension cuts in general, and we especially condemn the federal government’s unilateral imposition of these changes in the Budget, despite the Liberal’s vague commitment to “consultations” on these changes. This is a clear effort to preclude public sector workers’ ability to negotiate these changes at the bargaining table, yet another example of the Carney government’s complete disregard for the collective bargaining process.