Issue/Source: Budget 2025
Location: National
Date: January 2026
Suggested Responses
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Budget 2025 positions Transport Canada as a key driver of economic growth and trade diversification, with major investments, including the new Trade Diversification Corridors Fund – a fund of $5 billion over seven years, starting in 2025-26, to strengthen supply chains, unlock new export opportunities and build a more resilient, diversified economy.
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The budget also includes $1 billion for the Arctic Investment Fund, $55.2 million towards the Airports Capital Assistance Program, and new legislation to accelerate development of the Alto high-speed rail project.
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Budget 2025 outlines $13 billion in annual savings by 2028-29 across more than 100 federal organizations as a result of the Comprehensive Expenditure Review. At Transport Canada, this represents savings of $389.7M ongoing as of 2029-30.
Background Information
Budget 2025 introduced the Trade Infrastructure Strategy, which aims to expand and modernize Canada’s trade and transportation networks to double non-U.S. exports over the next decade, strengthen northern sovereignty, and better connect northern and Indigenous communities to domestic and global markets:
Trade Diversification Corridors Fund
- $5.0 billion over seven years, starting in 2025-26, to Transport Canada to create the Trade Diversification Corridors Fund, which is intended to strengthen Canada’s trade corridors across ports, rail, and roads, ensuring Canadian products move efficiently to global markets.
Arctic Infrastructure Fund
- $1 billion over four years, starting in 2025-26, to Transport Canada to create the Arctic Infrastructure Fund, which will invest in major transportation projects in the North with dual-use applications for civilian and military use, including airports, seaports, all-season roads, and highways.
- $25.5 million over four years, starting in 2025-26, to Crown-Indigenous Relations and Northern Affairs Canada, and $41.7 million over four years, starting in 2025-26, to Canadian Northern Economic Development Agency, to help accelerate regulatory processes in Canada’s North, including consultation with Indigenous governments and organizations, and local northern communities.
Additional Ports for Container Import and Export Designation
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As part of additional resources for the Canada Border Services Agency (CBSA) announced on October 17, 2025, CBSA will work with Public Safety, Transport Canada, and Global Affairs Canada to identify additional ports for container import and export designation, particularly in the Great Lakes-St Lawrence Region, like Québec City and Hamilton.
Catalyzing Investment in Airport and Ports
- $55.2 million over four years, starting in 2026-27, with $72.5 million in remaining amortization, and $15.7 million ongoing thereafter, to Transport Canada to support safety-related infrastructure projects and upgrades, including those that support dual-use priorities, at local and regional airports. Funding will be delivered through the Airports Capital Assistance Program and will also support a priority project to extend the runway at the Transport Canada-owned Îles de la Madeleine Airport.
Preclearance Access Regime
- $14.8 million over four years, starting in 2026-27, with $1.1 million in 2030-31 and $20.6 million in remaining amortization to Transport Canada to develop and implement a new preclearance access regime, ensuring a more secure transportation system for Canadians.
- Funding will also enable Transport Canada to invest in digital solutions to maximize efficiency in security screening activities, supporting the timely onboarding of employees in transportation facilities across Canada. This will complement the opening of the new preclearance facility at Billy Bishop Airport, for which the Government invested $30 million into in 2023.
Improving VIA Rail Service in the Corridor
- $8 million over five years proposed for VIA Rail Canada to implement technologies to improve on-time performance on its corridor services.
Renewing the Canada Strong Pass
- $116.3 million over two years, starting in 2025-26, to renew the Canada Strong Pass for the holiday season, from December 12, 2025, to January 15, 2026, and then again for summer 2026. Reduced-cost access over this holiday season is already in place through several Canada Strong Pass partners, including for eligible VIA Rail travel.
FIFA Men’s World Cup 2026
- $100 million over two years for Canadian Heritage, the Royal Canadian Mounted Police, CBSA, Immigration, Refugees and Citizenship Canada, the Canadian Air Transport Security Authority and the Canadian Food Inspection Agency to bolster federal activities that will support the hosting of the FIFA Men’s World Cup 2026 in Toronto and Vancouver.
Comprehensive Expenditure Review – Transport Canada Implications
- To meet up to 15 per cent in savings targets over three years, Transport Canada will implement a more modern and flexible regulatory and oversight regime that will allow the department to respond to rapid technological change, modernize services, facilitate regulatory compliance, and allocate resources more efficiently. These actions will help Transport Canada deliver for Canadians, including through the new Trade Diversification Corridors Fund – a fund of $5 billion over seven years, starting in 2025-26, to strengthen supply chains, unlock new export opportunities and build a more resilient, diversified economy.
Comprehensive Expenditure Review – Canadian Air Transport Security Authority
- To meet up to 15 per cent in savings targets over three years, the Canadian Air Transport Security Authority (CATSA) will deliver efficiencies without impacting the public, air travelers and stakeholders. CATSA will reduce its day-to-day expenses by minimizing spending on professional services, leveraging technology to automate certain processes and functions, and modernizing its organizational structure.
Grain Supply Chain
- The Government will continue ongoing work to assess the challenges facing different stakeholders within the supply chain and how changes in one area may impact others. This work includes longstanding issues, such as transportation forecasting and planning, and infrastructure capacity.
Leveraging Technology for More Productive Public Service
- Use artificial intelligence and automation to optimize back-office activities and reduce costs of dedicated resources assigned to repetitive tasks and realign service delivery models with a greater focus on self-service and technology-enabled solutions.
Fines and Penalties
- Undertake a review of fines and penalties to ensure charges are sufficient to incent compliance and appropriate behaviours. The review could focus on organizations with larger fines and penalties, such as Transport Canada.
Building High-Speed Rail Faster
- Introduce legislation to accelerate the development of Alto high-speed rail.
Legislative Amendments to the Aeronautics Act and the Canada Transportation Act
- Amend the Aeronautics Act to further strengthen Canada’s aviation safety and security regime, and amend the Canada Transportation Act to make temporary orders respecting international standards or obligations within all modes of transportation.
Supporting Facts and Figures
- Budget 2025 was released on November 4, 2025, and focuses on building major infrastructure, homes, and industries to drive long-term economic growth and prosperity; protecting our communities, our borders, and our way of life; and empowering Canadians with better careers, strong public services, and a more affordable life. It enables $1 trillion in total investments over the next five years through targeted public spending and stronger capital investment.
- Budget 2025 reallocates spending toward businesses, workers, and infrastructure, targeting $60 B in savings and $280 B in new investments over five years, with an estimated fiscal deficit of $78.3 billion, 2.5% of GDP, for 2025-26, falling to 1.5% of GDP by 2029-30. The federal debt-to-GDP ratio is expected to remain relatively stable across the horizon. Canada maintains the lowest net debt-to-GDP ratio in the G7 (13.3%)