Federal Budget 2026: Highlights

1. The Productivity Mega Deduction, at $36,055 million, is 25 per cent of the net five-year cost of all Budget 2026 measures (calculated: 36,055 / 142,013 million).
2. Six of the 14 largest lines go to First Nations and Indigenous communities, worth $29,281 million together (calculated), and four of the six pay nothing until 2027-28.
3. Budget 2026 spends 96 per cent of the $158.3 billion improvement in the outlook since the spring on new measures and policy actions (calculated: 151.5 / 158.3 billion).

The budget puts net support from measures introduced since the Spring Economic Update at "about $151 billion" over five years, on an accrual basis (Budget 2026, Economic and Fiscal Overview). The deficit rises to $62.3 billion in 2026-27 from $39.3 billion in 2025-26 (Annex 1, Table A1.8). Costs below are net over 2026-27 to 2030-31, in millions. The fiscal picture is in the Budget 2026 overview.

By Money

1. Productivity Mega Deduction*, $36,055 million (Chapter 1, s. 1.1). Businesses can permanently write off more assets at once, and the budget says the tax rate on new investment falls from 13% to 6.4%. The cost rises from $2,015 million in 2026-27 to $9,255 million in 2030-31, 4.6 times the first year (calculated). It was announced on September 15, 2026. Details are in the tax measures guide.
2. Supporting Canadian workers and businesses*, $11,324 million (Chapter 2, s. 2.3). One row books tariff measures announced on four dates from May 4 to October 21, 2026. The chapter's list of support since the spring includes $6.1 billion for Ontario's steel, auto and critical minerals supply chain. None of the row is new on budget day, and the cost peaks at $4,363 million in 2027-28. See steel and aluminum.
3. Putting Canada on a path to end homelessness*, $11,224 million (Chapter 3, s. 3.2). The budget proposes $11.2 billion over four years from 2027-28 and $17.8 billion in future years, for supportive housing and 10-year renewals of Reaching Home. Nothing flows in 2026-27, and provinces are expected to pay for operations. See housing.
4. Powering Canada Strong*, $8,747 million (Chapter 1, s. 1.2). The Clean Technology and Clean Electricity investment tax credits are extended to the end of 2040, and nearly $4 billion over 10 years goes to electricity infrastructure. The extension and wider transmission eligibility cost $2.4 billion from 2027-28 to 2030-31 and $36.1 billion from 2031-32 to 2041-42, 15 times as much after the horizon (calculated). See electricity and nuclear.
5. First Nations housing and infrastructure, 10-year commitment*, $7,913 million (Chapter 4, s. 4.3). The $32 billion commitment from 2027-28 includes $18.5 billion for a new First Nations On-Reserve Infrastructure Program and $11 billion to stabilise core housing funding. The five-year table books 25 per cent of the headline (calculated), and none of it in 2026-27. See Indigenous economy and reconciliation.
6. Securing the future of Canada-wide early learning and child care, $5,416 million (Chapter 3, s. 3.1). Up to $5.4 billion over two years, announced in June 2026, keeps child care affordable while governments rework the system. When the top-up ends, child care transfers fall from $11.0 billion in 2027-28 to $8.2 billion in 2028-29 (Annex 1). See child care.
7. Supporting Indigenous children and families*, $5,253 million (Chapter 4, s. 4.3). Most of it is Jordan's Principle, which gets $6 billion over six years from 2026-27. The rest renews the Inuit Child First Initiative and funding to implement the First Nations, Inuit and Métis child and family services Act. The net figure is after $798 million from existing resources, and the table books nothing until 2027-28.
8. Supporting student success in First Nations communities, $4,796 million (Chapter 4, s. 4.3). The budget proposes $5.8 billion over five years from 2027-28 for on-reserve schools. The fifth year, 2031-32, falls outside the cost table, so the table and the promise cover different years.
9. Providing more help with groceries and everyday essentials, $4,665 million (Chapter 3, s. 3.1). A one-time 50% top-up of the Canada Groceries and Essentials Benefit, paid in early 2027, is worth up to $339 for a single person. Of the total, $4,055 million falls in 2026-27, and the rest maintains Nutrition North Canada. See the tax measures guide.
10. First Nations clean water infrastructure and legislation*, $4,611 million (Chapter 4, s. 4.3). The money was announced on June 16, 2026, and the government has introduced Bill C-37, the proposed First Nations Clean Water Act. It rises from $180 million in 2026-27 to $1,898 million in 2030-31, so 76 per cent arrives in the last two years (calculated).
11. Strengthening health and safety in Indigenous communities*, $3,998 million (Chapter 4, s. 4.3). It includes $2.9 billion over three years from 2027-28 for the Non-Insured Health Benefits Program, plus policing. The line drops from $1,364 million in 2029-30 to $324 million in 2030-31 when the health benefits money ends, and the budget books no successor. See health care.
12. Mackenzie Valley Highway*, $3,100 million (Chapter 2, s. 2.1). Ottawa would fully fund about 800 km of all-season gravel road from Wrigley to the Dempster Highway in the Northwest Territories. The chapter gives no total project cost, and only $38 million is booked in 2026-27. See infrastructure and transit.

* Includes funding the budget classifies as capital investment.

Next come the fuel excise extension at $2,870 million and First Nations emergency preparedness at $2,710 million (Chapter 3, s. 3.1 and Chapter 5, s. 5.4). The largest offsets are projected EI premium revenue at -$2,188 million and tax compliance at -$1,063 million (Chapter 3 and Chapter 6, s. 6.3). A negative figure means offsets or revenue exceed the gross cost, a net gain to the budgetary balance.

By News Value

1. Operating balance in surplus a year early (Annex 1, Table A1.6). The day-to-day operating balance moves from -$3.5 billion in 2026-27 to +$11.2 billion in 2027-28, a year ahead of the 2028-29 anchor. That surplus counts $16.8 billion of estimated forgone revenue from capital tax incentives as revenue. Without it, 2027-28 would show a $5.6 billion operating deficit (calculated). More in the fiscal deep dive.
2. One federal development bank from BDC and EDC (Chapter 6, s. 6.3; Annex 3). A specially constituted board will oversee the merger while existing products continue, and the Canada Growth Fund's mandate widens. The budget sets no completion date for the merger. More on the Crown corporations page.
3. Canada Strong Fund as a Crown corporation, with a retail product (Chapter 2, s. 2.1; Annex 3). The fund gets an initial $25 billion over three years to co-invest with private investors, and principal-protected Canada Strong Notes tied to its returns are to go on sale in 2027. The $25 billion was announced in the spring update on a cash basis. Neither document's cost tables carry a line for it, which suggests it sits outside the budgetary balance.
4. Airports offered to private operators (Chapter 1, s. 1.1; Annex 3). The four largest airports would go to 40- to 50-year operating concessions, with the first operator chosen by early 2029. The budget spends $37.6 million on the process and gives no estimate of the proceeds. See transportation and logistics.
5. A $15 million capital gains exemption for growth shares (Tax Measures: Supplementary Information, Personal Income Tax Measures). The Canada Growth Incentive covers shares of private Canadian companies with assets up to $100 million, issued from Budget Day and held 36 months. Its cost is $80 million in 2029-30 and $485 million in 2030-31, so the $565 million five-year total shows only the start. See the tax measures guide.
6. Build Canada Workers Benefit replaces the Canada Workers Benefit (Chapter 3, s. 3.1). From 2027 the earnings threshold falls from $3,000 to $500, and maximum benefits rise to $1,859 for single people and $3,143 for families. Ending advance payments saves $3,082 million against $2,060 million for the richer benefit, a net saving of $1,022 million. Low-income workers get more but wait until they file to receive it.
7. Fuel excise tax suspension extended (Chapter 3, s. 3.1). The suspension on gasoline, diesel and aviation fuel, in place since April 20, 2026, runs to the end of January 2027, with half rates until April 1, 2027. With the groceries supplement, it is $6,925 million of one-time relief, 46 per cent of the 2026-27 cost of all Budget 2026 measures (calculated). See the tax measures guide.
8. Stamps rise to $2.00 (Chapter 6, s. 6.3). The single-stamp price goes to $2.00 in 2027 and then rises 7% a year, which the budget says costs a consumer about $6 a year. Canada Post also gets $1.4 billion over two years for operations and $1.2 billion over seven years to end urban door-to-door delivery. More on the Crown corporations page.
9. A smaller public service and a new IT department (Chapter 6; Annex 3). The public service has fallen from about 368,000 at the 2023-24 peak to about 332,000 in August 2026, about 36,000 fewer (calculated). Operating budgets are cut by $400 million over four years where early retirements exceed planned reductions. Digital Transformation Canada will replace Shared Services Canada, and pension accrual returns to 2% of salary combined with the CPP or QPP. More in the expenditure review explainer.
10. Deposit insurance rises to $250,000 (Annex 3). Eligible deposits in registered and tax-free accounts would have no limit, and the equity size at which a bank must become widely held rises from $12 billion to $25 billion. Payday loans would need a minimum 42-day term with instalment repayment. See financial services.
11. Foreign buyer ban extended to 2029, for existing homes only (Chapter 3, s. 3.2; Annex 3). The ban on purchases by non-Canadians runs two more years, to January 1, 2029, and new homes are exempted. The exemption opens new construction to foreign buyers while existing homes stay closed. See housing.
12. Defence Investment Agency as a Crown corporation (Chapter 5, s. 5.1). Bill C-40, introduced in October 2026, would make the agency a Crown corporation for defence procurement. Canada will also host a new multilateral Defence, Security and Resilience Bank. Combined defence and security funding is 3.7% of GDP in 2026-27 and 4.1% from 2027-28 (Budget in Brief, Chart 0.17). See defence industry.

What Was Not Announced

• Which programs account for $12.4 billion a year of lower spending. Annex 1 cuts projected direct program expenses by about 4.5%, mainly for updated timing and take-up of existing spending. It says the cut "is not attributed to particular departments, programs, or policy decisions". Over the five planning years it is about $62 billion (Table A1.7), 39 per cent of the improvement since the spring (calculated).
• The rest of the review savings. The balance "to be identified at a future date is $0.5 billion in 2027-28, and an average of $1.8 billion annually from 2028-29 to 2030-31" (Chapter 6). The new Chapter 6 savings of $2,053 million fill a placeholder Budget 2025 had already booked, so they do not lower the deficit.
• A debt anchor. The budget keeps the two Budget 2025 anchors and adds none for debt. Federal debt-to-GDP goes from 39.9% in 2026-27 to 40.4% in 2028-29 (Annex 1, Table A1.8).
• Tax rate changes. No measure in the Tax Measures: Supplementary Information changes a personal income tax rate, the general corporate income tax rate or the GST/HST rate.
• Defence figures past 2030-31. The budget says Canada has a funded plan to reach 4% of GDP this decade and is on track for 5% by 2035, but prints its spending path only to 2030-31.

Net Assessment

By money, Budget 2026 is an investment tax cut and an Indigenous services budget. The Productivity Mega Deduction and the six Indigenous lines total $65,336 million, 46 per cent of the net cost of all Budget 2026 measures (calculated). The money is back-loaded. Measures cost $15.2 billion in 2026-27 and $33.8 billion in 2027-28 (Table 1), and one-time relief carries nearly half of the first year. Much of the improvement that pays for them is an unallocated forecasting cut.

By news value, the lasting changes are to federal institutions, from a merged BDC and EDC to private airport operators and a defence Crown corporation. Most need legislation. Watch the Budget Implementation Act, Bill C-40 and the 2027-28 Main Estimates, which will show the early-retirement cuts.