Canada’s federal government released a budget on Thursday, November 5, proposing C$142.1 billion in spending and tax measures over five years while projecting a C$62.3-billion deficit for 2026–27. That deficit is C$3 billion lower than the spring forecast.

Finance Minister François-Philippe Champagne’s plan combines business-investment incentives, infrastructure commitments and household benefits. Prime Minister Mark Carney’s government says it wants to strengthen productivity and reduce Canada’s dependence on the United States amid continued trade uncertainty.

Higher commodity prices, particularly oil, and stronger economic activity have improved the government’s revenue outlook since the spring update. The C$142.1-billion total covers measures in this budget from 2026–27 through 2030–31; it excludes separate policy actions announced between the spring update and the budget.

For businesses, the plan includes a proposed Canada Growth Incentive offering a tax exemption on up to C$15 million in capital gains from eligible investments. It also includes C$930 million to expand the Scientific Research and Experimental Development tax-incentive program to certain commercialization expenses. The previously announced Productivity Mega Deduction would allow immediate deductions for a broader range of qualifying investments.

For households, Ottawa proposes a one-time supplement to the Canada Groceries and Essentials Benefit in early 2027. Finance Canada says it would increase the 2026–27 benefit by 50 per cent, providing up to C$339 for a single person without children or C$679 for a couple with two children. The plan also proposes a refundable caregiver credit worth up to C$1,260 for 2027.

The government projects that day-to-day operating spending will be covered by revenue in 2027–28, one year ahead of its earlier target. That is distinct from balancing the overall budget: deficits are projected to continue, reaching C$52.9 billion in 2030–31.

Economists questioned how much of the improved outlook would reduce borrowing. BMO Capital Markets senior economist Shelly Kaushik told Reuters that the government had chosen to spend most of the additional fiscal room rather than let it flow through to a smaller deficit. She described the spending as focused on attracting investment.

The fiscal figures remain forecasts. The government’s own economic scenarios show that persistent supply disruptions and inflation could leave deficits higher than its central projection.

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