Indigenous programs face $2.3B in cuts, some new money in Carney’s 1st budget

Indigenous programs face more than $2 billion in budget cuts but are being spared the worst of Ottawa’s proposed government-wide spending reductions in Mark Carney’s first budget as prime minister.

The Liberal minority government’s 2025 spending plan, tabled Tuesday afternoon in the House of Commons, would cut budgets by two per cent at both Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada  — translating to a total cut of almost $2.3 billion by spring 2030.

That’s much less than initially suggested in July, when ISC warned internally of “difficult decisions” forthcoming, en route to a reduction of up to 15 per cent over three years.

Meanwhile in new money, Ottawa promises $2.3 billion over three years for safe water in First Nations, and $10.1 million over three years for Indigenous consultations on major projects being fast-tracked through the regulatory process.

But the new money for Indigenous-specific programs mostly stops there. While Finance Minister François-Philippe Champagne promised “generational investment” before releasing the budget, the actual plan is far more low-key on Indigenous issues.

“The government remains committed to reconciliation. Crown-Indigenous Relations and Northern Affairs Canada and Indigenous Services Canada deliver important programs that are legally or constitutionally required,” the document reads. 

“The government will review how these organizations can deliver these programs more efficiently, with a two per cent savings target.”

Champagne suggested to reporters Tuesday that the Liberals are trying to strike a balance.

“We’ve been able to provide the savings while protecting what is important to the Canadian people,” he said.

While the cuts aren’t as big as they could have been, the Liberals still aren’t offering the type of major cash injection Indigenous leaders hoped for to close an estimated $425-billion infrastructure gap in their communities. 

The budget also suggests the Carney Liberals are piggybacking to some extent off the Trudeau government’s past spending pledges as money continues to roll out.

The budget for example notes that $2.8 billion “is being confirmed” as remaining available from the $4.3 billion initially promised in 2022 for urban, rural and northern Indigenous housing, meaning that program has not been cut.

While it doesn’t come with any money attached, a chapter on “advancing Indigenous tax jurisdiction” pledges to strike tax agreements on fuel, alcohol, cannabis, tobacco and vaping with interested Indigenous governments. 

In other policy areas, some Indigenous advocates were concerned expiring programs would not be renewed, and so far this budget offers little reassurance.

A spokesperson for the Ontario Federation of Indigenous Friendship Centres said the group was told by ISC to expect cuts when Urban Programming for Indigenous Peoples expires in March 2026.

“We’re very concerned about that because the program provides core operating funding and so it could mean the risk of friendship centres not receiving support to keep their doors open,” executive director Sean Longboat said in an interview before the budget was released.

Urban Programming for Indigenous Peoples received a top-up of $34 million this fiscal year, the budget says. The specific Indigenous programs that will see budget cuts haven’t been identified.

Indigenous peoples are also eligible for cash through initiatives touted elsewhere, such as an Arctic Infrastructure Fund that will receive $1 billion over four years for major transportation projects with dual-use applications for civilian and military, including airports, seaports and roads.

To reduce red tape and “accelerate regulatory processes in Canada’s North,” the budget pledges $25.5 million over four years for CIRNAC and $41.7 million over four years for the Canadian Northern Economic Development Agency

Indigenous groups would also be eligible for a new Build Communities Strong Fund, promising $51 billion over 10 years. The Inuit Nunangat University as well as the Lac La Ronge Indian Band Kitsaki Hall in Saskatchewan were named among the initial projects Ottawa is supporting.

The minority Liberals need three votes from the major opposition parties for the budget to pass in the House of Commons, and if they don’t secure that support a winter election could follow.