In brief
On Nov. 5, the Canadian Finance Ministry rolled out Budget 2026, aiming to ignite an "investment supercycle" with a $400 billion capital‑investment package and the lowest new‑business tax rate among major economies at 6.4%. The budget targets energy, defense, Indigenous reconciliation, housing, and homelessness while promising fiscal discipline.
Canada unveiled its 2026 federal budget on 5 Nov in Ottawa, with the Finance Ministry announcing a $400 billion capital‑investment drive designed to launch an "investment supercycle" and strengthen economic sovereignty.
Termed "Masters of our destiny," the package is meant to mobilise global capital and boost productivity over six years, with the federal government earmarking 400 billion CAD for capital investment.
One of the key measures is a "productivity mega deduction" that cuts the marginal effective tax rate on new business investment from 13 percent to 6.4 percent, the lowest rate among major world economies, and allows businesses of all sizes to fully deduct the cost of most new investments.
Energy policy will see 50 billion CAD invested to double Canada’s electricity grid capacity by 2050, alongside increased funding for nuclear energy and critical minerals.
Defense spending will rise under a targeted industrial strategy and a new defense drone programme, sending military expenditure to 4 percent of GDP within this decade and 5 percent by 2035.
Indigenous reconciliation receives more than 50 billion CAD over ten years, providing stable funding for core programs and advancing longstanding goals of reconciliation.
Housing and affordability receive additional support, with a 22 billion CAD allocation aimed at improving rent and housing affordability.
Fiscally, the budget projects a 62.3 billion CAD deficit for 2026‑27, with deficits above 50 billion CAD expected each of the next four years. Nonetheless, the government pledges to balance operating spending with revenues by 2027‑28, ahead of schedule, and to keep the debt‑to‑GDP ratio on a declining path. A 10‑year plan to end homelessness and 22 billion CAD in new affordability measures are also included.
