Canada's 2026 Budget Seen Targeting Productivity Gains, Lowering US Reliance Against Rising Borrowing Needs

09:25 AM EST, 11/05/2026 (MT Newswires) -- Canada's federal budget takes center stage on Thursday, with government spending plans and their implications for economic growth in focus. Prime Minister Mark Carney's second budget is expected to prioritize productivity, private investment and reduced economic dependence on the United States, while balancing these goals against rising borrowing requirements and fiscal pressures. The budget is expected to be expansionary, with its flagship measure, the Productivity Mega Deduction, designed to attract domestic and international investment. Announced at September's Investor Summit, the measure is projected to cost CA$36 billion over five years. Finance Minister Francois-Philippe Champagne has also signaled plans to ease the tax burden on small and medium-sized businesses to support Canada's longer-term economic prospects. The budget is also expected to provide an update on the federal immigration-levels plan following recent cuts amid concerns about the impact of population growth on housing affordability. Deficits are expected to remain sizeable, although higher oil prices and stronger revenues could result in slightly smaller shortfalls than projected in April's economic update. Preserving Canada's relative debt advantage will depend on translating investment into higher productivity while keeping near-term costs under control, economists say. "Budget 2026 needs to show it continues to deliver on both growth and fiscal strategies," wrote Cynthia Leach, assistant chief economist at RBC Economics, in a budget preview published last week. Carney is scheduled to attend the tabling of Budget 2026 in parliament at 4 p.m. ET on Thursday, according to a statement from the Prime Minister's Office late Wednesday.