Liberal MP Nathaniel Erskine-Smith highlighted a pointed criticism of the Budget 2025—a new fossil-fuel subsidy for LNG facilities and cuts exceeding $2.5 billion to international development aid over four years.
“If there’s a business case for LNG, there’s a business case. We don’t need more public dollars chasing fossil fuels,” he said, adding that the aid rollback shows “real Keir Starmer energy” that betrays Canada’s Pearsonian tradition of global leadership.
Erskine-Smith’s remarks, released in a video where he discussed “The Good, the Bad, and the Ugly,” marked one of the most pointed intra-party critiques since Prime Minister Mark Carney tabled his first fiscal plan earlier this month. The main “ugly” part of the budget, as per Erskine-Smith, covers fossil fuel subsidy for LNG facilities.
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Overall, the Beaches–East York MP argued that while the government rightly targets productivity and sovereignty, it finances too many non-capital commitments through deficits.
In the “bad” part, Erskine-Smith listed areas where the budget “fell short of expectations.” He faulted stalled climate action, noting that beyond the industrial carbon price and clean-investment tax credits, the plan cuts tree planting, winds down the Greener Homes program, and abandons an emissions cap.
“There’s nothing new,” he said, warning that Canada risks losing climate credibility even as the US accelerates green-tech spending.
On housing, he cited the early rollout of Build Canada Homes, a tax cut for first-time buyers, and enabling-infrastructure funding as “important but unlikely to move the needle” on affordability, given persistent development-charge barriers.
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He then turned to the budget’s fiscal frame: “spend less, invest more.” According to his reading, the plan adds $140 billion in new spending over five years, or $90 billion net after savings, with only 36% of that amount directed to capital projects. The rest, he warned, flows to non-capital items financed by deficits.
Two line items dominated his concern: the 2% of GDP NATO commitment and a middle-class income-tax cut, which together form the largest non-capital outlays.
“My kids shouldn’t pay for today’s military or for me to save $400 in taxes,” he said, adding that long-deferred Old Age Security reform, the fastest-growing program cost, remains missing from debate.
Despite criticism, Erskine-Smith credited the government for “meeting the moment in part.” He praised the Buy Canada procurement policy, tariff relief for affected businesses, major infrastructure investments, and a Sovereign Fund for Critical Minerals modeled after Norway’s.
He also welcomed new innovation dollars, talent-attraction measures aimed at US researchers, and targeted programs to combat youth unemployment, protect the Canada Disability Benefit from taxation, and support personal support workers.
“There’s lots to like… and I welcome the focus on productivity, both to drive growth in the private sector and to get the most out of public services,” he said.
The MP summed up the moment succinctly: “It’s not a budget that should throw us into an election, but it doesn’t live up to its promise of generational investments.” This is a retort to Carney’s claim when he tabled Budget 2025, saying it is “a generational investment budget.”
Erskine-Smith, who served briefly as Minister of Housing, Infrastructure and Communities from December 2024 to May 2025, closed his message by joking that the plan felt like “a pretty good Progressive Conservative budget.” He quickly clarified it was humor—“I’ll get flack for that, it’s a joke”—but the remark was followed with a clip of former Conservative MP Chris d’Entremont being cheered by Liberals after switching parties.
Earlier, Fitch Ratings warned that Canada’s proposed 2025 budget underscores erosion of federal finances and could increase rating pressure over the medium term even as the sovereign remains AA+ with a Stable outlook.
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One Response
Until Canada has a balanced budget, it make no sense for this country to support green initiatives other than improving productivity and reducing unnecesary methane emissions. We are in an existential emergency owing the the US changing their global view on trade. Lets dig out of that hole first before. And I am sure Erskine-Smith’s $400 contribution to the federal coffers would be appreciated.