Our take: Six key highlights for Indigenous Peoples in Canada’s 2025 Federal Budget

Budget 2025 represents incremental progress yet fails to fundamentally transform Canada’s colonial fiscal approach. The federal government must realign its fiscal policy with its commitments to Reconciliation and Nation-to-Nation relationships.

The 2025 Federal Budget, presented under the theme of “A Strong Canada,” focuses on long-term economic growth through new investments in infrastructure and business development. The government reaffirms its intent to work with Indigenous Peoples on self-determination, infrastructure, and economic participation.

However, the budget offers few new dollars – and falls short of the transformative fiscal change required to achieve true reconciliation and close persistent socioeconomic and infrastructure gaps faced by Indigenous communities.

Six key highlights include:

1. Funding Cut for Indigenous Services Canada (ISC) and Crown-Indigenous Relations and Northern Affairs (CIRNAC)
2. Infrastructure and Housing
3. Major Nation-Building Projects
4. Health Care Assessment in the North
5. Emergency Management
6. Indigenous Tax Jurisdiction Framework 

1. Funding cut for ISC and CIRNAC

Despite targeted investments, the federal government announced 2% funding cut from Indigenous Services Canada (ISC) and Crown-Indigenous Relations and Northern Affairs (CIRNAC), totalling $2.3 billion by 2030. This directly undermines progress toward fiscal reconciliation.

There are no new funds for Indigenous-specific programs or education agreements, and several Indigenous-led initiatives are soon set to expire without renewal.

2. Infrastructure and Housing

Budget 2025 commits $2.3 billion over three years for the First Nations Water and Wastewater Enhanced Program.

It also maintains $2.8 billion for Indigenous housing, but no new money was added.

A total of $15.1 billion in capital transfers spanning five years is dedicated to Indigenous community infrastructure, alongside smaller investments ($25.5 million to CIRNAC and $41.7 million over four years to CanNor) to improve northern regulatory and consultation processes.

While these funds may sustain existing programs and begin to address drinking water concerns, they fall far short of the estimated $425 billion needed to close the infrastructure gap.

3. Major Nation-Building Projects

$213.8 million will support the Major Projects Office and its Indigenous Advisory Council.

An additional $10.1 million over three years is set aside for Indigenous consultations under the Building Canada Act, supporting major projects like Port of Churchill Plus.

These investments help advance large-scale development, but these measures fall short of enabling Indigenous-led governance and benefit-sharing in major developments. Faster timelines for national projects may also threaten meaningful engagement with Indigenous Nations.

4. Health Care Assessment in the North

The budget recognizes ongoing health inequities in northern and Arctic regions and commits to a comprehensive assessment of northern health systems.

The goal is to reduce medical travel and increase access to care close to home.

Success will depend on working directly with Indigenous governments to ensure health services are culturally grounded and sustainable.

5. Emergency Management

To strengthen national wildfire response, $257.6 million over four years will be used to lease four aircraft for provincial and territorial firefighting.

While this increases national capacity, it does not support Indigenous-led emergency management or local climate adaptation, which are key to long-term resilience.

6. Indigenous Tax Jurisdiction Framework

Budget 2025 proposes a new framework enabling Indigenous governments to opt into value-added tax arrangements on commodities such as fuel, alcohol, cannabis, tobacco, and vaping products.

This could help Nations grow their own-source revenues and strengthen fiscal autonomy over time.

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What needs to change:

To advance Reconciliation, Canada must:

• Ensure stable, predictable, long-term funding for Indigenous governments.
• Renew Indigenous-led programs before they expire.
• Co-develop fiscal frameworks rooted in Indigenous sovereignty.
• Invest strategically to close the socioeconomic and infrastructure gaps.

In summary:

Budget 2025 represents incremental progress yet fails to fundamentally transform Canada’s colonial fiscal approach. The federal government must realign its fiscal policy with its commitments to Reconciliation and Nation-to-Nation relationships. 

When all voices are heard, the path forward becomes clearer.

Connect with Waapihk – let’s shape your response to Budget 2025 together.