Prime Minister Mark Carney arrives in the House of Commons before the tabling of the federal budget. Justin Tang/The Canadian Press The Liberal government is using a federal balance sheet bolstered by stronger-than-expected revenues to pursue a long-term investment agenda, betting that increased borrowing will deliver future economic gains. Through tax cuts and other business supports, the budget aims to boost private-sector investment and major nation-building projects, including doubling the capacity of Canada’s energy grid. It also announces tens of billions of dollars for housing, First Nations infrastructure and other social supports, including a one-time top-up to the Canada Groceries and Essentials Benefit (CGEB). Finance Minister François-Philippe Champagne’s 2026 budget reveals a major revenue windfall since Ottawa’s spring update, driven largely by soaring global oil prices. The government plans to spend nearly all of it, leaving its bottom line largely unchanged with a deficit of $62.3-billion in 2026-27 and projected annual deficits in the $50-billion to $60-billion range over the next five years. All told, the federal budget outlines $151.5-billion in new spending over five years compared with the spring economic update. That is more than offset by a $158.3-billion improvement in the government’s revenue and expense forecasts. The budget is the second delivered since Mark Carney became Prime Minister. It adds details to his major policy priorities, including plans to use Crown corporations and federal investment funds to “catalyze an investment supercycle.” The government says economic growth could improve if its investment plans deliver as hoped. But the annual cost of servicing a growing debt load is projected to climb to $85.5-billion by 2030-31 from $60.2-billion this year, a trend that the Parliamentary Budget Officer has flagged as a concern. In his speech to the House of Commons, Mr. Champagne portrayed the budget as a comprehensive response to global uncertainty driven by international conflicts and trade tensions with the United States. “In the face of adversity, we’re seizing opportunities and working together to rebuild stronger,” he said in French. “I sincerely believe that in a few years, Canadians will see this moment as another turning point in our history.” The Liberal government is arguing that tax changes, cultural supports and billions of dollars aimed at stoking investment in Budget 2026 will give Canada the freedom to shape its own… Full Caption Ottawa benefited from a stronger economic starting point than projected in the spring economic update, as well as a slightly improved growth outlook. This time last year, economic growth was flatlining, and many economists expected Canada’s tariff-battered economy to fall into recession. Growth picked up through the middle of this year, while a surge in global oil prices, driven by the war in the Middle East, boosted Canada’s nominal GDP – the largest measure of the country’s tax base. With that stronger baseline, the budget projects $23.9-billion more in annual revenues on average over the next five years than the spring update, with more money coming into federal coffers from corporate and personal income taxes as well as goods and services taxes. It also trimmed its outlook for direct program expenses by an average of $12.4-billion per year over the forecast horizon, as a result of ongoing efforts to shrink the size of the civil service and find other efficiencies. The projected federal debt-to-GDP ratio was revised down by almost about 1.5 percentage points over the forecast horizon compared with the spring update. It remains essentially flat at around 40 per cent over the next five years. The deficit-to-GDP ratio rises to 1.8 per cent this year from 1.2 per cent last year, which is at odds with the government’s pledge to maintain a declining ratio. It then falls gradually to 1.3 per cent over the following five years. Ottawa says it has met its ot
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