It was Budget Day, and of course, because it’s 1995 and will always be 1995, the headlines are always about the deficit. (Budget document here). It turns out that the deficit for the current fiscal year is about half of the earlier projection, thanks to increased revenues (in large part because of high oil prices), and it’s being kept steady for the next few years while the government once again took up the increased revenue to fund a bunch of things, most especially their Mega Deduction.
Budget 2026 in one graph
— Trevor Tombe (@trevortombe.bsky.social) 2026-11-05T22:18:11.388246+00:00
Budget 2026 sees federal debt dropping to 19% of GDP by 2060; I get ~48%. #cdnecon #cdnpoliTwo key differences: net debt doesn’t subtract non-financial assets (capital), and I assume we meet the new NATO target. Long-term fiscal challenges may be bigger than budget implies.
— Trevor Tombe (@trevortombe.bsky.social) 2026-11-06T00:55:34.329048+00:00
ok, here's what underlies the whole document. This is a HUGE windfall relative to the Spring Economic Update. Add up the extra and it is $186B. That's how they piled on so much extra spending AND lowered the deficit forecast.Easy to do with +$186B in your pocket!
— Kevin Milligan (@kevinmilligan.bsky.social) 2026-11-06T00:56:50.939Z
Some highlights of the coverage:
- $52 billion to double electrical capacity by 2050—and considering this a climate plan
- Plans to extend the open banking framework to other sectors, while still delaying the actual open banking implementation.
- More tax breaks for tech CEOs, because “innovation.” Also, EDC and BDC are merging.
- $400 million more for military drones, plus more funding for space launch capacity.
- A few more details on the “Canada Strong” sovereign wealth fund.
- New laws to “streamline” expropriations for the Alto high speed rail project.
- The hope is for the tax breaks and incentives to create an “investment super-cycle”
- There is $5 billion for culture, including CBC and journalism.
- There is a promise of $6 billion for CSIS, possibly the largest increase in funding ever.
- The budget aims to work with provinces to end homelessness in ten years.
- There is also $50 billion over ten years for Indigenous programmes and services.
- The budget doesn’t give any clues as to the future of health transfers.
- Immigration levels are to be kept largely the same, with plans to convert 200,000 temporary residents to permanent residents.
- There remain unanswered questions about the path to meeting NATO targets.
Reaction from the opposition has been pretty much as expected—Pierre Poilievre is howling that the deficits will fuel inflation (which is not what is happening with inflation), while Avi Lewis demands a wealth tax (that won’t generate the revenue he claims) and for it to be spent on “lowering the cost of groceries” (no, subsidizing a “public option” is not actually lowering the cost) and building more housing (for unrealistic amounts of money).
Budget commentary includes:
- Justin Ling delves into the promises for drone production.
- Kevin Carmichael points to the signals the budget sends to the bond markets.
- Susan Delacourt sees the government taking the cue about affordability.
My Latest:
My column looks at all of Mark Carney’s talk about “values” in foreign policy and wonders when we might actually see some—other than “making money.”