Federal government to table 2026 budget on Nov. 5

OTTAWA · Finance Minister François-Philippe Champagne announced the government will present its 2026 budget on November 5. He made the statement during Tuesday's question period in the House of Commons. This marks the second budget under Prime Minister Mark Carney and continues the shift to a fall tabling schedule. The fiscal plan arrives as Canada's economy contends with pressures from collapsed trade talks and new tariffs.

"This plan will unlock investment, create high-paying jobs across our nation and strengthen our economy and our country for generations to come," Champagne said. The budget date falls two days after the United States holds its midterm elections on November 3. Last year's budget was also released in early November, breaking from the traditional spring schedule. The government says the fall timing aids provincial and municipal planning and gives federal departments more time to implement new measures.

The announcement coincided with a downgraded economic forecast from the Parliamentary Budget Office. The PBO now expects real GDP growth of 0.9 percent this year and 1.5 percent in 2027, down from its June projections of 1.1 and 1.6 percent. Parliamentary Budget Officer Annette Ryan cited "additional trade measures and ongoing uncertainty" for the revision. Since June, Canada-U.S. trade negotiations have failed and both countries imposed new tariffs on imports.

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The budget watchdog also projects a federal deficit of $63.3 billion for the 2026-27 fiscal year, rising to a peak of $70.2 billion in 2027,28. Compared to its June outlook, annual deficits are now forecast to be $3 billion higher on average over the following four years. Ryan's report noted that while higher oil prices provided a short-term revenue boost, new spending commitments have already consumed that fiscal room. The PBO expects stronger revenues will be more than offset by new expenditures.

Prime Minister Carney has pledged to balance the government's operating budget, which covers day-to-day spending. He initially targeted 2028 but moved the goal forward to 2027 last September. However, a PBO report last month projected Ottawa would not achieve an operating balance until fiscal 2029-30, a year later than Carney's original timeline. The watchdog has also noted inconsistencies in how departments classify operational versus investment spending.

Inflation has risen in recent months, with Statistics Canada reporting a 3.1 percent annual rate in September, up from August. The agency attributed the increase to higher fuel prices. The PBO assumes the Bank of Canada will begin raising its policy rate in early 2027 to anchor inflation expectations, reaching 2.75 percent by mid-year. It forecasts inflation will average 2.8 percent in 2026 before easing to 2.4 percent the following year.

Champagne's spring economic update in April showed an improved deficit picture for the previous fiscal year. The 2025 budget had forecast a $78.3 billion deficit for 2025-26, but the April update projected $66.9 billion. That update also projected deficits of $65.3 billion for the current year and $63.1 billion for the next. Since taking office, Carney has focused federal borrowing on infrastructure rather than daily government operations.

With files from The Canadian Press, CityNews and CBC News