OTTAWA — Prime Minister Mark Carney's Liberal government is projecting a $62.3-billion deficit in 2026–27 while introducing nearly $142 billion in new spending over five years, with federal debt interest payments expected to reach $85.5 billion annually by the end of the decade.Finance Minister François-Philippe Champagne tabled the 2026 federal budget in the House of Commons Thursday, outlining a plan that would leave Ottawa running a $52.9-billion deficit in 2030–31.The budget, titled Masters of Our Destiny, includes nearly $159 billion in projected new revenue and savings over five years, largely from tax revenues, oil windfalls, and reductions to the federal public service.Federal debt charges are projected to rise from $60.2 billion in 2026–27 to $85.5 billion in 2030–31, an increase of more than $25 billion annually.Hours before the budget was tabled, Conservative Leader Pierre Poilievre accused the Liberals of manipulating the government's financial figures."He cooked the books on immigration, he cooked the books on debt," Poilievre told the House during Question Period..Poilievre accused Carney of dividing government spending across "not one, not two, but three different credit cards," arguing that the Liberals were using accounting practices unlike those employed elsewhere."If a company did it, they would be criminally charged for defrauding their shareholders," he said.The Conservative leader also cited Parliamentary Budget Officer projections that he said would see the government add more than $700 billion in federal debt over five years.Carney rejected the criticism, promising that Canadians would see a government capable of balancing its operating budget while continuing to invest in the economy."We will see a government that's balancing the operational budget," Carney said.The Liberals are distinguishing between day-to-day operating expenditures and capital investments, allowing the government to pursue an operating balance while continuing to run overall deficits..Champagne, meanwhile, devoted part of his budget speech to affordability measures, including additional grocery assistance, benefits for workers and financial support for caregivers."This winter, the new 2027 Canada Groceries and Essentials Benefit supplement will give more than 12 million Canadians a 50% boost to their benefit," Champagne told MPs.The one-time increase is expected to provide approximately $4.1 billion in additional assistance."We're also investing more than $610 million to strengthen and expand the Nutrition North program," Champagne said, referring to the federal initiative intended to lower food costs in northern and remote communities.The budget also proposes expanding the Canada Workers Benefit to reach 1.9 million workers, including another 180,000 recipients."We are making the Canada Caregiver Credit fully refundable," Champagne said."That means more than $1,000 a year in support for 585,000 caregivers," he added, including 180,000 Canadians who would receive the benefit for the first time.The Liberals are also extending the federal fuel excise tax holiday until January 2027, with Champagne saying motorists could save up to 10 cents per litre of gasoline and four cents per litre of diesel..Beyond affordability, the government is introducing tax incentives intended to encourage companies to invest in Canada.A permanent productivity mega-deduction would allow businesses to write off qualifying investments more quickly, at a projected cost exceeding $36 billion over five years.The Department of Finance estimates the measure could increase Canada's real GDP by approximately 0.5% by 2030.The budget also proposes a Canada Growth Incentive, offering a capital gains tax exemption on up to $15 million in qualifying gains reinvested from a successful startup into another Canadian business.Ottawa is also proceeding with plans to allow private investment in Canada's four largest airports through long-term operating concessions.The government is allocating nearly $38 million over three years to develop the framework and select an operator by early 2029.The budget also proposes reopening part of Canada's housing market to foreign buyers, while keeping restrictions on purchases of existing residential properties..As reported by iPolitics editor-in-chief Marco Vigliotti, Ottawa is moving to allow non-Canadians to purchase newly built homes, creating an exemption intended to attract investment into residential construction.The change would permit foreign buyers to participate in the new-build housing market without lifting the broader prohibition on purchases of existing homes.The foreign-buyer ban, introduced under former prime minister Justin Trudeau, was intended to discourage foreign speculation in Canadian residential real estate. It had been scheduled to expire at the beginning of 2027.Under the new budget proposal, the prohibition would continue until January 2029, with an exemption for newly built housing.Carney described the budget as another step toward reducing Canada's economic dependence on the United States."It's the next big step in our action plan to make this country more independent, more sovereign," Carney told reporters before the budget was tabled."It focuses on growth, on people and that sovereignty, so we can live our lives as we wish."The budget also maintains the government's immigration targets, with 380,000 permanent residents and 370,000 new temporary resident arrivals planned annually between 2027 and 2029..Ahead of the budget, Conservative immigration critic Michelle Rempel Garner warned that headline targets should be examined alongside additional permanent residency pathways and temporary resident permits.A Nanos Research survey commissioned by CTV News found that 52.3% of respondents wanted Canada to admit fewer immigrants and temporary residents in 2027.The Liberals must now secure sufficient support in the House of Commons to pass their budget.The Canadian Taxpayers Federation is criticizing Carney for increasing spending $14 billion overbudget and providing no plan to stop borrowing money in Budget 2026.“Budget 2026 shows government debt continues to spiral out of control because government spending continues to spiral out of control,” said Franco Terrazzano, CTF Federal Director. “Carney is spending $14 billion more than he said he would and taxpayers are losing more than $1 billion every week paying interest charges on the debt.”The government is borrowing more than $60 billion this year, according to Budget 2026. The debt will reach $1.37 trillion by the end of the year. The budget has no plan to stop borrowing money.Paying interest on the federal debt is the government’s “fastest-growing expense,” according to a recent Parliamentary Budget Officer report.The CTF has pushed Ottawa to simplify the tax code for years and Budget 2026 says the government is “launching the most ambitious effort in decades to simplify the tax system.” The government is also providing some capital gains tax relief, which will save taxpayers $715 million over four years, according to the budget. The government plans to begin increasing its gas tax shortly after Christmas.“The fastest, simplest and easiest way for the government to make life more affordable is to stop taking so much, but taxes are still way too high because the government is borrowing way too much,” Terrazzano said. “Carney needs to stop overspending so he can cut taxes further without ballooning the debt.”
