The 2025 Federal Budget: What It Really Means for Canadian Homeowners and Borrowers

Canada Just Took Out a Massive Mortgage – This year’s federal budget is one of the biggest in Canadian history — not just in size, but in ambition.

And to really understand it, let’s compare it to something familiar: a family budget.

Imagine a family here in London, Ontario who decides it’s time to renovate, help the kids with school, buy a better car, and fix the driveway. They borrow $300,000 to do it all, hoping those improvements will pay off long-term.

That’s exactly what Canada is doing right now. The federal government is taking on a $78.3 billion deficit — roughly doubling what was planned a year ago — to “rebuild” from the inside out.

Here’s what that means in plain language:

Housing

$25 billion is being poured into housing programs. That means more homes built faster and an attempt to increase supply — something we’ve needed for years. In time, this could help stabilize prices and ease the squeeze for first-time buyers.

Infrastructure

Over $115 billion is headed toward roads, ports, and pipelines. That’s like a family upgrading its plumbing, driveway, and home office. These upgrades don’t just make life easier; they support future growth and value.

Defence and Industry

An additional $30 billion is being committed to national defence and manufacturing. Those dollars circulate through contracts, materials, and jobs — often in construction and trade sectors that support the housing market.

The Catch: Debt and Interest

Here’s the tricky part. The entire plan depends on interest rates staying low.
Just like a family taking a big loan, if rates rise, those payments get more painful. The Bank of Canada controls rates, not the politicians — and that independence means risk.

Where Does the Money Come From?

Simply put, we’re borrowing it. The government sells bonds and takes on new debt, betting that economic growth will outpace the interest costs. It’s like refinancing the nation — borrowing at today’s rates to invest in tomorrow’s returns.

Immigration and Government Cuts

To ease housing demand, the budget reduces temporary resident levels and trims about 40,000 public-service jobs, saving $60 billion over five years. That’s a leaner government, but it also changes who’s earning, buying, and borrowing in our economy.

What It Means for You

This isn’t a quick fix. It’s a long-term rebuild.
More housing and infrastructure could mean opportunity — but if borrowing costs rise, everyone will feel it.

At Mortgage Teacher, we help families prepare for both sides of that coin: how to benefit from growth, and how to protect against higher rates.

As I always say: "It’s not about fear. It’s about being ready."

Because whether it’s your home or your country, the same rule applies — debt can build wealth, but only if it’s managed wisely.