OTTAWA, ONTARIO / ConSynSer / – Canada’s federal government tabled a budget on Thursday that projects a C$62.3 billion deficit for 2026-27 and creates the country’s first sovereign wealth fund. Finance Minister François-Philippe Champagne presented the plan, titled “Masters of Our Destiny.” Prime Minister Mark Carney’s government said the budget aims to strengthen economic independence and reduce reliance on the United States. It was tabled in the House of Commons on November 5.
The C$25 billion Canada Strong Fund will invest in Canadian companies and major national projects. Through Canada Strong Notes, Canadians will be able to invest directly in the fund and gain a stake in nation-building projects. The fund will take ownership stakes in major projects and businesses. The budget also outlines an economic transformation to tackle weak productivity growth and falling private-sector investment. Champagne said the budget is about building on Canada’s strengths and shaping its own future.
The 2026-27 deficit is smaller than the C$65.3 billion projected in the spring economic update, according to the budget documents. Deficits are forecast to narrow gradually to C$52.9 billion in 2030-31. The federal debt-to-GDP ratio is expected to hover around 40% for the next five years. Ottawa said operating spending will balance with revenues in 2027-28, a year earlier than planned. The 2025-26 deficit is estimated at C$39.3 billion.
Productivity push and capital investment
The budget introduces a Productivity Mega Deduction, allowing most new business investments to be fully expensed immediately. Finance Canada said it lowers the marginal effective tax rate on new investment from 13% to 6.4%. A new Canada Growth Incentive exempts up to C$15 million in capital gains from eligible investments. The government plans about C$400 billion in capital investments over six years. The government said the deduction could create up to 80,000 jobs.
More than C$22 billion over five years is earmarked for new affordability measures. The Canada Groceries and Essentials Benefit will rise by 50% for one year, with payments in early 2027. A National Heat Pump Rebate of more than C$2 billion will support up to 820,000 households. Housing measures worth C$44.7 billion over 11 years aim to end homelessness within a decade. The Canada Caregiver Credit will become fully refundable from 2027, worth up to C$1,260 a year.
Budget responds to U.S. trade pressure
The budget calls U.S. tariffs unjustified and says C$44 billion has been provided to support affected workers and businesses. Canada has broadened its own tariffs on U.S. imports in response. Exports of goods to non-U.S. markets rose C$33 billion in 2025, with another C$57 billion gain expected this year. The government aims to double non-U.S. exports by the end of 2035. Canada has 15 free trade agreements in force covering 51 countries.
On defence, the budget says Canada has met NATO’s 2% of GDP target and is on track to reach 4% this decade and 5% by 2035. It also commits C$7.6 billion over five years to Operation REASSURANCE. Cultural measures include C$300 million over two years for CBC/Radio-Canada. The budget comes after a federal deficit that widened last year. Champagne urged all MPs to vote for it. Canada will also host the 2028 Francophonie Summit.