Canada Unveils 2026 Budget With C$45 Billion Housing Plan, Higher Borrowing and Slower Growth Outlook
- Canada's 2026 budget includes C$45 billion in housing affordability measures and C$25 billion to establish a new Canada Growth Fund
- Canada forecasts 2026 GDP growth of 1.0%, down from 1.1% previously, and 2027 growth of 1.7%, down from 1.9%
- Canada projects a 2027/28 budget deficit of C$62.5 billion, compared with C$63.1 billion forecast in April
- Federal debt-to-GDP ratio expected at 39.9% in 2026/27, rising to a peak of 40.4% in 2028/29, before easing to 40.1% by 2030/31
- Canada plans to borrow C$611 billion in 2027/28, up from C$587 billion in 2026/27, with 72% of total borrowing used to refinance maturing debt
- Canada plans C$316 billion in bond issuance and C$290 billion in Treasury bill issuance for 2027/28
- Canada to increase Treasury bill issuance by C$16 billion in the current fiscal year
- Public debt charges projected at C$60.2 billion in 2026/27, rising from 1.8% of GDP to 2.2% by 2030/31
- Canada maintains permanent resident immigration target at 380,000 annually for the next three years
- Budget includes tax incentives for successful startups and maintains commitment to regular green bond issuance
- Canada renews monetary policy framework with the Bank of Canada, reaffirming price stability as the primary objective while retaining flexibility to respond to shocks
- Canada assumes WTI crude oil prices averaging $87 per barrel in 2026 and $89 in 2027