Finance Minister François-Philippe Champagne tabled the 2026 budget on Thursday, the second introduced under Prime Minister Mark Carney’s government.
Titled Masters of our Destiny, it shows a slightly lower than originally forecasted deficit for this year.
The government coffers were bolstered by an expected windfall thanks in part to oil revenues. But the Liberals have largely opted to put that money back into the economy.
The budget outlines billions in new spending, but mostly on non-permanent measures. Here are some takeaways.
The budget projects a $62.3-billion deficit for this fiscal year, down from the $65.3-billion projection from April.
The projections also keep the federal-debt-to-GDP ratio hovering around 40 per cent for the next five years. Still, public debt charges are projected to rise over the next five years and will account for nearly 13 per cent of government spending by 2031.
Carney’s 2nd budget earmarks billions for affordability and Canadian sovereignty
Budget 2026: Ottawa bets on investment, major projects to boost Canada’s economy
In terms of new spending, the budget announced $142 billion in new measures — on top of $9.5 billion announced since the spring economic update.
A portion of those new measures are geared at affordability, including another 50 per cent top up to the GST rebate set to be delivered early next year.
The budget promises to take steps “toward helping create the conditions to end homelessness within 10 years.”
The plan is being backed by a $11.2-billion commitment over the next four years, including $3.6 billion to build supportive and transitional housing and $1.8 billion toward mental health, addictions and social supports.
The government is also committing $2 billion over the next two years to build mental health and addictions facilities.
The Trudeau government had promised to reduce chronic homelessness by 50 per cent by 2030, though the Parliamentary Budget Office reported in 2024 that the government was falling short of that goal. That report acknowledged the pandemic likely presented unexpected challenges.
A person sleeps on the street in downtown Montreal, on Monday, Sept. 10, 2026. (Christopher Katsarov/The Canadian Press)
A portion of the budget shows the government is putting some financial backing behind Canadian arts and culture.
One key aspect is a new tax exemption for artistic earnings. This measure promises an annual total $45,000 exemption on “business income derived from original and creative artistic works.”
The government is also proposing to make a portion of the Canada Strong Pass permanent, allowing free access to national museums for those under the age of 25.
And it proposes $1.5 billion over nine years to go toward the construction and expansion of community ice rinks and recreational facilities.
Like last year, Carney’s government has used the budget to unveil its immigration targets for the next few years.
Even though the prime minister has floated the idea that his government is starting to consider when it could increase immigration targets again, the numbers in Thursday’s budget show the targets are remaining flat.
Canada is aiming to admit 370,000 temporary residents and 380,000 permanent residents per year over the next three years. These targets line up with the numbers released in last year’s budget.
A new Canadian citizen holds a folder during a citizenship ceremony to mark Citizenship Week in Surrey, B.C., Monday, May 13, 2024. (Ethan Cairns/The Canadian Press)
The government is proposing giving taxpayers a little extra time to file their tax returns and pay any taxes owing.
As it stands, most individuals need to file their income tax return every year by April 30. In other cases, such as trust filing, the due date is at the beginning of April.
The 2026 budget promises to create a single tax filing date of May 15, starting in 2028 for the 2027 tax year.
The government estimates that this will help Canadians avoid $230 million in interest and penalty payments over a five-year span.
The government is proposing to allow Canadians to keep their RRSPs — the registered accounts where they can grow their retirement fund with pre-tax income — after the age of 71.
RRSPs currently need to be withdrawn or converted into a Registered Retirement Income Fund, or RRIF, the year someone turns 71.
Billing this new measure as an “RRSP for life,” the budget proposes merging tax rules governing both RRSPs and RRIFs, removing the requirement to convert.
The budget says the measure “would also allow a surviving spouse or partner to become a successor holder of an RRSP and simplify tax-free transfers to qualified survivors after the death of the account holder.”
An RBC financial planner looks over spousal RRSP and RRIF forms in Ottawa on Thursday, Feb. 2, 2023. (Sean Kilpatrick/The Canadian Press)
Carney announced during September’s investment summit that the government plans to open up Canada’s four largest airport operations to private investors. Budget 2026 hints at what the next steps in that process will be.
The government is aiming to announce its first concession agreement with a private operator by early 2029, the budget document says.
But first the feds say they plan to introduce legislation to govern how the operating agreements will work. The government is also promising to set “clear rules to protect travellers from unreasonable increases.”
