OTTAWA — Prime Minister Mark Carney’s government is planning $142.1 billion in new spending, tax breaks and incentives over the next five years to boost the economy, help Canadians with rising costs and address homelessness.
Finance Minister François-Philippe Champagne presented the 2026 federal budget in the House of Commons on Thursday.
The government expects a $62.3-billion deficit this year, about $3 billion lower than forecast in the spring. However, deficits are expected to remain above $50 billion annually for the next four years.
The budget focuses on business investment, affordability, infrastructure and Indigenous communities. It also includes $9.4 billion in additional spending announced since the spring economic update.
One of the largest measures is a $36.1-billion tax incentive designed to encourage businesses to invest in equipment, buildings and other projects in Canada.
To help with affordability, the government plans to spend an additional $4.6 billion on grocery rebates. It is also committing $11.2 billion over five years toward efforts to end homelessness within a decade.
Another $26.6 billion is being set aside for Indigenous communities, including funding for housing, clean drinking water, education and support for children and families.
However, the growing national debt is raising concerns. The budget estimates that debt interest payments will reach $60.2 billion this year, exceeding the $57.4 billion set aside for health transfers to provinces.
Economist Don Drummond of Queen’s University warned that the growing debt could limit the government’s ability to spend money in the future.
The budget also includes $89.4 billion for Old Age Security this year, with costs expected to rise to $109.5 billion by 2030-31.
Opposition parties criticized the government’s spending plans.
Conservative Leader Pierre Poilievre called the budget too expensive and said his party would vote against it.
NDP Leader Avi Lewis argued that large corporations are receiving too much support while ordinary Canadians are not getting enough help with everyday expenses.
Green Party Leader Elizabeth May also criticized the budget for placing less emphasis on climate targets and preparedness.
