Rose pursuant to notice of Senator LaBoucane-Benson on November 5, 2025:

That she will call the attention of the Senate to the budget entitled Canada Strong, tabled in the House of Commons on November 4, 2025, by the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, P.C., M.P., and in the Senate on November 5, 2025.

She said: Honourable senators, I am delighted to speak today to this inquiry on the budget.

It is gut-wrenching to watch what is happening to our economy these days. Few places are more exposed than my hometown of Windsor, feeling the effects of a slowdown due to events that are completely out of our control.

When I was minister of the economy, we were in a recession, which caused me a lot of sleepless nights and anxiety. I’m getting that familiar feeling again. You can imagine my anxiety. Will the budget bring relief to Canadian society? It will bring some relief. In this budget, I see a path to recovery, a way to make this trade war a starting point for something even better.

For example, the tool die mold sector is the canary in the coal mine for manufacturing. They know what’s coming about three years before it lands on the plant floor. They make the tools that find their way there, so they know how quickly the economy is moving, well in advance of the manufacturing process.

I spoke to Louis Jahn from Jahn Engineering Ltd. about this budget. They make high-pressure tooling, including metal-stamping dies. He was frank: If you are planning to invest, this budget is going to help. He liked the focus on defence, the potential for diversification and the focus on nuclear energy, which is another area that he’s encouraging his whole community and sector to work in.

The Strategic Response Fund is meant to help sectors like his, hit by steel and aluminum tariffs. He liked the expansion of the Scientific Research and Experimental Development, or SR&ED, tax credits and the focus on streamlining the process to make it easier. In fact, this budget will raise the total from $3 million to $6 million, from which the 35% tax credit is calculated. He loves the “Buy Canadian” sentiment that he found there. He hopes that continues when these “build big” projects start to move forward, especially in nuclear power and defence.

How are our manufacturers feeling these days? “Uncertainty,” I think, is the best word for them. That means delays in investment decisions until the future is clearer. There is an uncertainty chart on page 9 of the introduction of that big book that we found, and you’ll see uncertainty trundling along the bottom axis until it hits February 2025 and the advent of tariffs. Then it shoots straight up, and that’s how the manufacturing sector is feeling, in particular.

Here are a couple of things that are true in the auto sector: In 2020 China exported 1 million cars globally. In 2025 they are on track to export 8 million. Just for some context, North America will make about 14.5 million cars this year, and Ontario will probably make about 1.5 million compared to the 8 million on track to be exported from China.

Their environment is as uncertain as our environment. They have open capacity in their plants, as we do, so they are dropping their prices and flooding the market — whichever market will take them — and flatlining sales for many of the cars that we sell and many of the parts in those cars that we produce.

As for the North American car companies called the “Detroit 3,” or “D3” — General Motors, Ford and Stellantis — they are hurting, too. One, because the consumer has decided they’re not all in on the electric car just yet, and they made massive investments to build them, especially here in Canada.

Two, because their president keeps shooting them in the foot with his tariff policy, each one losing several million dollars each quarter on tariffs that their president tells Americans we are paying, when, in fact, they are paying.

This sector has the largest supply chain of all sectors. It has a major impact on our auto parts community, the group that actually employs more people than that of the assembly of cars. In Ontario, it’s about 70,000 people.

The American President has chosen a tariff shotgun with buckshot that goes all over the place. No less than 85% of our products are included in the United States-Mexico-Canada Agreement, or USMCA, but that means 15% are not. Those cars that are produced in Canada are also subject to a 25% tariff right now.

The imposed steel and aluminum tariffs are a big pain point. Think of Sault Ste. Marie, Hamilton, Manitoba and Longueuil in Quebec. These are all critical points for these companies.

There is a constant calculation about how much of that material is in the product. How do you calculate it? How do you make sure you don’t make a mistake? The consequences are dire at that border as the products cross. You could actually lose your eligibility to export into the U.S.

Many other sectors feed off the success of manufacturing, so this level of uncertainty really smarts. It prevents investment decisions from moving forward. Plants are scrambling with government programs to help keep workers on the job, so they don’t lose them.

I felt that job one for this budget in this sector was to be like the physician’s creed, “Do no harm.” In fact, I think it did a lot better than that. The budget identified $25 billion in support of workers, businesses, auto workers, agricultural producers, manufacturers and more. It includes an accelerated depreciation of 100% in the first year for capital investments, access to funds that help our companies enhance their competitiveness and improved tax rates to keep up with the sharp drop that we’ve seen in those tax rates in America.

The aerospace companies I spoke with are excited about the emphasis on “Buy Canadian.” Our aerospace companies are largely exporters. For example, Space Credibility, located just over in Kanata, exports 98% of its products. Much of their work is focused on research and development, so they welcome the financial improvements in the budget. These companies see the benefit of collaborating with other sectors to manufacture higher-volume products, such as smaller satellites.

The Canadian tech sector — the start-up companies I spoke with — were very positive. I called Canada’s best microecosystem for innovation, MaRS. They directed me to some of their clients.

Jason Robinson founded Evoco. Evoco is a great story. They make sustainable products from plants. Here is this young man out of Woodstock, Ontario, schooled in Hamilton, who created a global business in footwear and other sectors. They use his chemical platform to make bioleathers for industrial use in things like the armrests, seats, et cetera, in cars, and the biggest fashion houses in Europe — if you can imagine. There is 150% less carbon emitted, and it is less toxic in its production. He has many customers, and they’re all outside of Canada.

For him, improving R&D tax credits increases his ability to invest. Going to the institutional banks is just not an option, so the Venture Capital Catalyst Initiative, which is destined to pull more private venture capital into our country, could be a big win for him. He hopes funds like the Federal Economic Development Agency, or FedDev, will continue to offer support for him that would be ideal. He’s ready now to build a facility here. That’s the level of demand for his product to export.

Sacha Sawaya founded Litmus Automation, an AI company that makes software for the industrial sector — manufacturers, food processors, utilities — companies that create tons of data. His company analyzes and crunches it, and it goes back to his customers to use it to be more competitive and to adopt winning strategies in this very uncertain global market. Litmus spent the first six or seven years in intense R&D. But as industries finally adapted to using the cloud and discovered that data is, in fact, a corporate asset, well, Litmus has grown.

Their customers are in the EU, Japan, the U.S. and India, but none are in Canada yet. This budget could change that. Sacha is delighted to see the modernization of the SR&ED tax credits, streamlining a complicated process.

This budget announced an expansion of what could be included, like buildings for use in processing in R&D, and expanding the qualifying total from $3 million to $6 million — a huge lift for companies like his, which spend millions of dollars each year.

The focus on “Buy Canadian” could be such a boon to our high-tech companies, our industries and even our government as it moves to more automation of its services and the use of AI. A dedicated fund of almost $1 billion to build our own sovereign AI computer capacity, Canadian-owned and operated cloud data storage. That would mean that our regulated industries, security-sensitive industries, defence and government would meet the safety standard that our public expects.

Litmus would look to take advantage of the new Productivity Super-Deduction for capital investments. It makes venture capital look at Canadian companies like Litmus more closely.

Bulking up funds in programs like the Strategic Response Fund helps our companies look for that partner funding. The fund announced for export-oriented tech companies is right up their alley.

With our manufacturing sector in the fight of its life, it is companies like Litmus that will give it a leg up. As Sacha said proudly:

Manufacturing isn’t going anywhere. We are always going to need stuff. They’re going to reinvent themselves with data, and we’re going to help them.

I loved his energy.

The head of Canadian Manufacturers & Exporters, Dennis Darby, using two words to address the budget, said, “More, quicker.”

I spoke to Sam Mugel. Sam is from Multiverse. Multiverse is a global AI company launched here and in Spain, with a start in our own Creative Destructive Labs and nurtured by MaRS. They specialize in AI compression — a bit of an education for me — that is used in edge industries, or those that can’t or won’t rely on the cloud: drones, autonomous vehicles or things you need to use when you don’t have Wi-Fi — language learning and gaming, perhaps.

Interestingly, their customers are largely in Europe. Sam Mugel says their biggest customers could be in North America: large companies that are spending so much money on the cloud. What they do would save them money and let them use AI to be more competitive at the same time.

Sam’s company raised $300 million last year, half of which will be spent on computers, so the enhanced depreciation will be great for them. He is pleased with the “buy Canadian” focus in the budget and the promotion of AI in government services. He was impressed to see us take a page out of the European COVID recovery strategy, which was to offer funds to match investors’ funds. There, it pushed private investors to invest in innovation. It de-risked their investment, and in Canada’s case, it is also subject to a potential R&D tax credit.

Overall, this is a positive response to the budget and our future, not just for our new and burgeoning high-tech industries but our stalwarts too: Our manufacturers have been emboldened by our start-up community coming out swinging. As Sacha from Litmus says, it is “reinventing itself with data, analysis and AI.” We can’t control what surprises the American President has for us or the changing geopolitical landscape that is trying to upend our global supply chains. However, there is reason to be hopeful.

A few days ago, in the quiet of the night, you may have seen that the American President rolled back tariffs on about 200 food items, specifically in response to unsustainable higher prices in American grocery stores. With our larger sectors, such as manufacturing, this same move toward higher prices is taking more time while stockpiles dwindle. Yes, prices will be going up, as companies cannot eat the tariffs they are being forced to pay. Maybe we’ll see the same retrenchment on tariffs in that sector as well.

This is what Jim Farley, the CEO of Ford from Dearborn, Michigan, said a few days ago:

We are in trouble in our country. We are not talking about this enough. We have over a million openings in critical jobs, emergency services, trucking, factory workers, plumbers, electricians, and tradesmen. It’s a very serious thing.

Senator Pupatello, I’m sorry, your time has expired. Would you like to ask for a couple of minutes?

May I have permission to continue?

Is leave granted, honourable senators?

I hope this is riveting enough for two more minutes.

He didn’t mention that the workers that they are losing daily through ICE raids or the visas they are not renewing from India are creating even more of a problem for them. Even if those affected companies try to move their suppliers to the U.S., which they are, how will they do so and who is going to work there? It takes years to build a plant, even in America, and it takes energy. They don’t have enough energy for their supply today.

How are we going to do this with this type of industrial expansion there? As much as companies want to impress their president, it is extremely difficult to decouple our integrated industries without also killing them, or at least causing them irreparable harm.

This budget includes a number of features to support workers, to retrain them and to extend benefits. It’s crafted with economic uncertainty in mind, and our companies need this support through this document. Despite the headwinds, Louis Jahn from Jahn Engineering, a tooling company, said, “Eventually the floodgates will open . . . .” We need to be ready. He is contemplating the expansion of a building right now so he can be ready. This budget will help him ease into that with a 100% writeoff in the first year of that investment. He has the kind of attitude that we all need right now.

Is the budget everything? Well, it’s a lot. It’s a giant step forward, and it’s determined. It’s going to be as determined as we are to get through this. I look forward to more debate on this consequential document, and thank you so much for the extra time.

Senator, we added five minutes of time. You still have a couple of minutes. Will you take a question?

Because the budget bill hasn’t been tabled yet, I hope you will understand if I don’t have the answer.

Will you take a question?

Sure.

Thanks so much for the question. The luxury tax is actually on cars, boats and those types of vessels over $100,000. Fortunately, even the Lexus — which is made in Cambridge, Ontario — is $95,000 fully loaded. So we’re delighted that there aren’t cars built in Canada that are captured in that luxury tax.