When Prime Minister Mark Carney unveiled his government’s first federal budget last week, he called it a “generational investment” to make Canada “stronger, fairer, and cleaner.” But environmental groups say the numbers tell a different story.
The 2025 budget, titled Canada Strong, boosts military and fossil-fuel spending while cutting funds from environmental programs, according to federal documents and environmental organizations. Groups such as the Climate Action Network Canada and Greenpeace Canada argue the budget fails to meet Canada’s emissions targets and moves the country further from a just energy transition.
Keith Brooks, Programs Director for Environmental Defense shared that Budget 2025 could have been an opportunity for Canada to transition into a future-focused, energy-efficient economy, one which does not rely primarily on fossil-fuels. Instead, Brooks added, the budget “offered little substance and no new measures — all while extending fossil fuel subsidies, backing away from anti-greenwashing rules, and creating a path to axing the long-awaited oil and gas emissions cap.”
Billions for defence, less for the environment
Greenpeace’s Senior Energy Strategist, Keith Stewart, believes that “this is a budget that decided to invest in military and police rather than climate action.”
“When you’re looking at the world today and thinking about how to best protect people, it’s by acting on climate change rather than buying more guns,” he said. “Guns aren’t going to stop the wildfires or the floods washing away communities.”
While the government describes its plan as “fiscally responsible climate leadership,” to many environmentalists the details suggest a different set of priorities. Budget 2025 directs an additional $9 billion toward defence this year, bringing total military and security spending to roughly $62.7 billion—a major boost aimed at hitting NATO’s two per cent target ahead of schedule. Meanwhile, funding to Environment and Climate Change Canada is being trimmed by $1.3 billion over the next few years, as reported by The Narwhal.
The Impact Assessment Agency of Canada, which reviews large industrial and resource projects, faces a cut of $65.8 million. Funding for the federal Greening Government initiative will also decline, while some existing climate programs are re-profiled without new money attached.
“This budget shows that ‘austerity’ applies to efforts to protect people and the planet—but that more money can always be found for military spending and polluting industries.” said Caroline Brouillette, executive director of CAN-Rac in an official statement.
Fossil subsidies and weakened oversight
The budget maintains tax credits for carbon-capture projects and introduces incentives for “low-carbon LNG facilities” — measures that environmental groups say entrench fossil dependence.
Stewart noted that the Carney government “gave away the oil-and-gas emissions cap” and plans to “weaken anti-greenwashing laws,” two policies previously touted as tools to hold industry accountable.
“Those were the levers of change we had to push oil companies,” Stewart said. “Instead of putting Canadians to work building public transit systems or a green electrical grid, the government is handing out tax credits to corporations.”
Sabaa Khan of the David Suzuki Foundation echoed that concern, saying Canada “can’t build a resilient and competitive economy by doubling down on fossil fuels.”
‘Canada Strong’ leaves Indigenous priorities behind
First Nations leaders also raised alarms about where federal money is and isn’t going.
“True national strength must include equitable investments that ensure First Nations can thrive alongside all Canadians,” said Ontario Regional Chief Glen Hare. “Cuts to Indigenous Services risk undermining programs that support health, education, and climate adaptation in our communities.”
The Chiefs of Ontario noted that while Ottawa continues to reference “partnership,” it has offered few concrete commitments to Indigenous-led climate solutions or land-based conservation programs.
A banker’s approach to climate
Keith Stewart had also said the budget reflects “a banker’s mindset” rather than a political vision for transformation. As a banker, you think about incentives for people to spend money,” he said. “As a political leader, you decide where society needs to go. Carney is still focused on tax credits to corporations instead of actually building things — public transit, an east-west grid, renewable energy, electric buses.”
He described Carney’s governing style as “progressive conservative,” arguing the budget “could have been tabled by Stephen Harper.” Both, Stewart said, “talk about making Canada an energy superpower — but we can’t be an energy superpower if we’re still running on fossil fuels.”
Climate priorities overshadowed by geopolitics?
Stewart believes the decision to boost military spending and border enforcement is partly an attempt to align with U.S. President Donald Trump.
“Carney seems to think doing things like boosting military spending or hiring border guards will please Trump,” he said. “But every concession is taken as weakness. Canadians voted for someone who would stand up to Trump, not for appeasement.”
Budget 2025’s defence allocations — which include new Arctic patrol funding and expanded procurement contracts — dwarf its new climate spending.
Carney’s government insists its plan will “enable Canada’s transition to a clean economy” while maintaining fiscal discipline. Yet for environmental groups, the 2025 budget signals retreat at a moment when climate disasters — from floods in Atlantic Canada to record western wildfires — demand urgency.
“Mark Carney knows this isn’t a matter of ignorance,” Stewart said. “He was the UN envoy on climate finance. But this budget shows he’s still thinking like a banker, not a leader.”
As global climate negotiations begin, advocates say the choices in Canada Strong will define whether the country can meet its own targets — or keep financing the causes of the crisis.
“Until we stop paying for pollution,” Stewart said, “we’re still moving in the wrong direction.”
What climate groups had wanted to see
Advocates say the budget missed a chance to invest directly in low-carbon infrastructure. Stewart listed priorities Greenpeace hoped to see: large-scale public transit expansion, a national east-west clean-energy grid, solar panels and heat-pump access for low-income households, and an ambitious plan to retrofit buildings.
Instead, Stewart said, the government offered “a bunch of tax credits and new funding for carbon capture for oil companies — taking it in the wrong direction.”
CAN-Rac called for restoring funding to the Impact Assessment Agency, finalizing a strong emissions cap, and phasing out fossil subsidies by 2026.
“We need a budget that invests in people and the planet, not one that props up polluters,” Brouillette said.
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