In brief
Canada reveals Budget 2026, packaged with low effective tax rates for new business investment and substantial spending on energy, defense and Indigenous reconciliation. The plan earmarks $400 billion CAD over six years for capital projects, projects a $62.3 billion CAD deficit in 2026‑27 and aims to map out a 10‑year end‑to‑homelessness plan.
On Thursday, the Canadian Finance Ministry unveiled Budget 2026, announcing a suite of measures aimed at spuring an "investment supercycle" designed to strengthen economic sovereignty and global competitiveness.
The plan earmarks 400 billion CAD (≈285 billion USD) for capital investment over six years, a move intended to attract global capital and boost productivity across the economy.
A flagship tax reform cuts the marginal effective tax rate on new‑business investment from 13 percent to 6.4 percent, the lowest rate among major world economies, allowing businesses to fully deduct almost all costs of most new investments.
Energy and defense spending are also spotlighted: 50 billion CAD will fund a doubling of the country’s electricity grid capacity by 2050 and boost nuclear and critical‑minerals development, while a defense industrial strategy and drone program target raising military spend to 4 percent of GDP within this decade and to 5 percent by 2035.
The budget allocates more than 50 billion CAD over ten years for Indigenous reconciliation and provides 22 billion CAD in new affordability measures, alongside a 10‑year plan to end homelessness.
On the fiscal side, the government projects a 62.3 billion CAD deficit for the 2026-2027 fiscal year, with deficits above 50 billion CAD expected in each of the following four years. It pledges to balance operating spending with revenues by 2027‑2028 and to keep the debt‑to‑GDP ratio on a declining path.
