Prime Minister Mark Carney has announced plans to scale back federal spending later this year, though he has yet to clarify which programs will be affected or the extent of the reductions.

He made the announcement during a Liberal caucus gathering in Edmonton, framing it as the beginning of a new chapter in fiscal responsibility. While Carney has floated a target of $25 billion in cuts over the next three years, this figure falls short of the more ambitious promises he made during the election campaign, including shrinking the public sector and boosting economic efficiency.

According to projections from the Department of Finance, federal expenditures in 2025 are expected to reach $558.3 billion. Much of that spending is already committed: $85.5 billion for seniors’ benefits, $71.1 billion for government payroll, $54.7 billion for health transfers, $54.2 billion in interest payments, and $29.6 billion for the Canada Child Benefit.

Opposition Leader Pierre Poilievre has criticized Carney’s approach, accusing the government of excessive spending and failing to deliver meaningful budget cuts.

Adding to the uncertainty, the government has not yet released a comprehensive budget for 2025. The most recent fiscal update—the Fall Economic Statement from December 16—projects a deficit of $42.2 billion.

A national survey conducted in September 2025 by Harris & Partners, a licensed insolvency trustee firm, has revealed a troubling financial reality for Canadians: 88.9% are living paycheck to paycheck.

Key Insights from the Survey

• 88.9% of respondents say they rely entirely on their regular income to get by.
• More than 60% used credit cards, loans, or other forms of borrowing to cover basic expenses over the past year.
• 77.1% said they could not handle an unexpected $500 expense without borrowing.
• 80.1% reported having no emergency savings.
• 81.4% described themselves as financially stressed.
• 67.4% blamed themselves for their financial struggles.

Joshua Harris, CEO of Harris & Partners, called the findings “alarming,” noting that the crisis goes beyond discretionary spending. “This isn’t about cutting back on luxuries—it’s about scrambling to afford necessities like food, shelter, and transportation,” he said. With credit increasingly used as a lifeline, household finances are becoming more precarious.

A Glimmer of Hope

Despite the grim statistics, 62.4% of Canadians remain hopeful that their financial situation will improve within the next year. Harris emphasized that this optimism must be supported by broader economic reforms, particularly efforts to align wages with the rising cost of living.

Canadians are so used to volatile fuel prices that the federal government is quietly counting on them not noticing a planned increase of up to 13 cents per litre under its Clean Fuel Regulations.

That’s the core message in a May 8 briefing note obtained by Blacklock’s Reporter, which outlines a strategy to raise fuel costs while minimizing public backlash.

“Given the variability in fuel prices paid at the pump, increases in fuel costs due to the Clean Fuel Regulations may not be noticeable by most consumers, including farmers,” states the internal memo titled Clean Fuel Regulations.

The Plan: Raise Ethanol, Raise Prices

The government’s approach is to mandate higher levels of ethanol and biodiesel in fuel blends—more expensive alternatives to conventional fuels—while relying on price fluctuations to mask the added cost.

According to Agriculture Canada projections, by 2030 the regulations will add:

6¢ to 13¢ per litre to gasoline

7¢ to 16¢ per litre to diesel

Despite the impact, the federal government insists this isn’t a tax—it’s a “market-based mechanism.”

“Regulations are not a tax and are a market-based mechanism designed to spur innovation of clean technologies,” the memo claims.

The estimates closely match a 2023 report by the Parliamentary Budget Officer, which projected a fuel price increase of up to 17 cents per litre—a significant hit for Canadians, particularly those in rural areas reliant on diesel equipment and long commutes.

Fuel Mandate’s Growing Footprint

First introduced in 2023, the Clean Fuel Regulations require tripling ethanol content in gasoline—from 5% to 15% over time. Currently, 26% of Canada’s corn-growing land and 3% of wheat acreage are already dedicated to ethanol production, raising concerns about food supply impacts and land use.

Warnings from Within

Even the government’s own advisors are issuing warnings. A 2024 report from the Net Zero Advisory Body stressed that climate policy must go beyond reducing emissions to address affordability and economic strain, citing mounting costs in housing, energy, food, and transport.

Meanwhile, a 2024 study in the Journal of Public Health found that millions of Canadians live in “energy poverty”—defined as spending more than 10% of income on heating and cooling, or paying more than twice the national median for energy.

The Bottom Line: “You Won’t Notice”—Until You Do

Despite growing concerns, Ottawa’s message remains: Relax. You won’t notice the difference.

But for Canadians balancing household budgets, running farms, or commuting outside big cities, the impact will be real—and critics warn that by the time it’s felt, it may be too late to reverse course.

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Unmatched Financial Flexibility

One of the standout features of the Keep Mastercard is its impressive credit limit, which can go up to $400,000. This provides businesses with the financial flexibility they need to manage cash flow, invest in growth, and handle unexpected expenses. Unlike traditional credit cards, the Keep Mastercard eliminates interest fees, annual fees, and foreign transaction costs, making it a cost-effective choice for businesses of all sizes.

Rewards That Work for You

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Advanced Features for Modern Businesses

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Security and Support You Can Trust

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After a long period of price stability through the 2024 fall and winter, gasoline prices climbed eight cents mid-January from 1.669 to 1.749. This price increase hits consumer wallets mere months ahead of another scheduled increase to the Canadian carbon tax on April 1st. It remains to be seen if gas prices will continue increasing prior to the carbon tax hike, but either way this will put additional strain on many households already struggling to make ends meet in the midst of persistent high inflation.

With the Federal Government prorogued until March 24th, 2025, there is no chance of a change in tax policy to provide Canadians with essential financial relief before the carbon tax increase.

Liberal party leader hopefuls are trying to distance themselves from the disastrous carbon tax policy they have supported since 2019, with hopes of benefiting from long standing opposition talking points. Even in the unlikely event of a pause or reduction of the federal carbon tax policy, which would reduce the cost of living across Canada, British Columbia still manages a provincial carbon tax that would continue to impact fuel prices regardless of federal policy.

Canada Post has increased stamp prices due to growing financial challenges, effective Monday. The 25% price hike, proposed last year, affects domestic and international mail. Domestic letter stamps now cost $1.44, up from $1.15, while stamps in booklets, coils, or panes have risen from 99 cents to $1.24 each. Other products, including U.S., international letter-post, and domestic registered mail, also see a 25% increase.

The rates, proposed in September and approved in late November during a labor strike, aim to align stamp prices with the rising cost of providing letter mail services amidst declining letter volumes and inflation.

Canada Post estimates the price increase will impact Canadian households by $2.26 per year and small businesses by $42.17 annually. This comes after reporting a pre-tax loss of $315 million in Q3 2024, with parcel revenue dropping 5.8% and volumes decreasing by 9.6%.

Despite resuming full domestic services post-strike, Canada Post warns of ongoing delays for transaction, neighborhood, and international mail. The company expects another significant loss for 2024, marking its seventh consecutive annual loss.

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