Canada has unveiled a federal budget aimed at easing the cost of living and reducing the country's economic dependence on the United States, projecting a deficit of C$62.3 billion (US$44.2 billion) for the 2026–27 fiscal year.

Finance Minister François-Philippe Champagne tabled Budget 2026, titled "Masters of Our Destiny", in Parliament on Thursday 5 November. It proposes C$142.1 billion in new spending and tax measures over five years, with major investment in infrastructure, business development and household affordability.

An "investment supercycle"

The centrepiece is a productivity mega deduction allowing businesses to write off the full cost of eligible capital assets immediately, on a permanent basis. The measure cuts Canada's marginal effective tax rate on new business investment from 13 per cent to 6.4 per cent, which the government says will make Canada more tax competitive than the United States. It will cost about C$36 billion over five years.

The budget also introduces a Canada Growth Incentive, a capital gains exemption of up to $15 million for qualifying individuals selling shares in certain corporations, and C$181.4 million over four years to expand Invest in Canada, the agency that attracts foreign investment.

Deficits above C$50 billion for four years

The projected deficit is C$3 billion lower than previously anticipated, but the government has not committed to balancing the overall budget. Instead, Ottawa aims to balance its operating budget by 2027–28, while deficits are forecast to exceed C$50 billion in each of the next four fiscal years. Federal debt stands at about C$1.3 trillion, and debt servicing is expected to consume roughly 10 cents of every tax dollar, according to CTV News.

Conservative leader Pierre Poilievre called it a "costly credit card budget" and said his party would vote against it. The measures now face parliamentary scrutiny.