By Daniel Béland

October 28, 2026

As we head towards the Carney government’s second budget, it is appropriate to reflect on a powerful shift in the federal policy agenda that has followed the end of Justin Trudeau era: the decline of social policy as a defining issue in federal politics.

Clearly, since Mark Carney became prime minister amid a trade war between Canada and the United States, the Liberal government has focused primarily on the economy, infrastructure, and foreign affairs at the expense of environmental protection but also social policy expansion, which was a key priority during the Justin Trudeau years (2015-2025).

Importantly, social expansion under Trudeau was not triggered by the pandemic or even the New Democratic Party (NDP) having the balance of power and striking a supply and confidence agreement with the Liberals in March 2022. In fact, as Peter Graefe, Olivier Jacques and I have argued, social policy expansion became a priority for the Liberals as soon as Justin Trudeau became Liberal leader, largely as part of an electoral strategy to seduce NDP voters through social promises in areas ranging from child care to pension reform.

Once in power, Trudeau’s Liberals began to implement an ambitious policy agenda, notably in 2016 through the enactment of the Canada Child Benefit (CCB), which strongly reduced child poverty, and a significant yet fiscally sound expansion of the Canada Pension Plan negotiated with the provinces.

While the beginning of the pandemic triggered large temporary programs like the Canada Emergency Response Benefit (CERB), afterwards the Liberals — with the support of, and under pressure from, the NDP in a minority Parliament — created new permanent social programs such as the Canada Disability Benefit (CDB) and the Canadian Dental Care Plan (CDCP) while putting forward a framework for a pharmacare program that remains unfinished business.

Finally, in 2023, the Liberal government significantly boosted the Canada Health Transfer and, two years earlier, they began implementing a national child care program through agreements signed with the provinces and territories.

Last year, Toronto Metropolitan University Sociologist Naomi Lightman and University of Toronto Professor Emeritus of Social Policy Ernie Lightman claimed that, while “Trudeau’s record may be spotty,” “his biggest accomplishment was a national child‑care program.” More generally, I would say that social policy expansion was one of the most crucial aspects of his legacy, something that people will probably associate with his prime ministership for years and decades to come.

Prime Minister Carney, in contrast to Trudeau, has not emphasized social policy expansion. This is related to the current international context, as the trade war between Canada and the United States has fostered much uncertainty and the sense that Canada must strengthen its economic sovereignty, secure its self-defence capabilities, and diversity its trade alliances.

The need to meet NATO defence spending targets and looming federal deficits have reinforced existing fiscal challenges.

While Prime Minister Carney uttered the word “austerity” ahead of last fall’s federal budget, overall the first budget of his prime ministership clearly increased the size of the federal deficit compared to the previous year. The emphasis of the budget was on new infrastructure, defence, and housing spending, which the Liberal government framed as investments.

The need to meet NATO defence spending targets and looming federal deficits have reinforced existing fiscal challenges.

The budget also featured a limited middle-class tax cut and an ongoing Comprehensive Expenditure Review containing “measured actions to spend less, to enable more investments in Canadians and the economy.” This quote illustrates the somewhat arbitrary distinction between “spending” and “investment” that framed last year’s budget exercise. Here for the most part the focus was on economic investment and not on social investment, a reality that once again contrasts with the Justin Trudeau era.

More generally, despite the presence of measures related to housing and other cost-of-living issues, the 2025 federal budget marked the end of the period of social policy expansion that began in 2015.

The November 5th federal budget should continue to move the country beyond the logic of programmatic social policy expansion but previous commitments made during the last decade will continue to shape Canada’s fiscal reality. This is the case because permanent programs like the CCB continue to deliver benefits that shape the content of the federal budget.

Simultaneously, time-limited funding pledges and agreements with the provinces and territories in areas such as child care and healthcare are an ongoing source of pressure on the federal government.

For example, earlier this month, federal health minister Marjorie Michel announced a one-year extension of the special federal funding for addictions, mental health, and home care. Yet, provincial concerns about healthcare funding remain, especially with regard to the guaranteed five-percent minimum annual increase of the Canada Health Transfer (CHT) currently in place.

Adopted in 2023 for a five-year period only, this guaranteed minimum could be phased out in 2028, which would create a “fiscal cliff” the provinces want to avoid. The CHT is the largest fiscal transfer in Canada and its value for 2026-2027 is estimated at $57.4 billion, which is higher than public debt charges.

In other words, even if the Carney government is not prioritizing social policy expansion like the Trudeau government before it did, social spending continues to increase and there is an ongoing push for temporary federal fiscal commitments to become permanent.

The upcoming federal budget should give us a clearer idea about how the Carney government plans to move forward with its economic priorities while continuing to fund existing social programs and transfers that have been shaped in large part by the expansionist legacy of the Justin Trudeau years.

A fellow of the Royal Society of Canada, Daniel Béland is professor of political science and director of the McGill Institute for the Study of Canada at McGill University.