Federal Budget 2026

November 6, 2026

Yesterday, Finance Minister François-Philippe Champagne tabled Budget 2026, titled Masters of Our Destiny. The budget is Prime Minister Mark Carney’s second since taking office and the first since the Liberal government secured a House of Commons majority earlier in 2026. Presented amid continuing U.S. trade disruption and wider geopolitical uncertainty, the budget positions economic sovereignty as the organizing principle of the government’s agenda.

The budget seeks to shift Canada’s growth model toward greater business investment, productivity and domestic production, highlighting an ‘Investment Supercycle’ to be fuelled by the previously announced Productivity Mega Deduction, the new Canada Growth Incentive and an expansion of the existing SR&ED tax credit.  Other main elements include “Buy Canada” procurement, developing stronger domestic supply chains, trade diversification, and support for strategic industries. Infrastructure, housing, energy, defence, and workforce measures are presented as part of a broader effort to attract private investment and reduce Canada’s economic dependence on the United States. The Budget also includes record spending commitments for the Canadian creative and cultural sectors.

Many measures with real business impact are commitments to consult, legislate, or announce details later, including privacy and anti-fraud rules, tax simplification, the future of drug policy, and new housing deals with the provinces. The budget also pushes more cost onto provinces and cities: on housing and homelessness, Ottawa will pay to build but the provinces will be on the hook to cover operating costs. Overall transfers to provinces will continue to grow. With its majority the government can move its budget bills through the House without support from other parties. The open questions remain timing, final design, and how the provinces will respond.  

For their part, the Conservatives have already signalled their opposition to the Budget, just minutes after it was tabled.  Conservative Leader Pierre Poilievre quipped that "the title should be 'Mastered by Debt'" because of the $765 billion added to the federal debt. 

Highlights of Invstments in the Arts and Culture Sector

While the previous federal budget allocated $720 million to Canada’s cultural sector, amid warnings of significant cuts to federal funding, Budget 2026 marks the largest cultural investment in a non-pandemic year in Canada’s history.

This year’s budget proposes to invest $4 billion over 5 years for the arts and culture sectors through key measures to support the audio and audiovisual sectors as well as the journalism and book sectors; strengthen its Crown corporations including its national museums, the Canada Council for the Arts, CBC/Radio-Canada, and the National Arts Centre; revitalise cultural infrastructure and recreational facilities; and celebrate Canada’s culture through a Canada 160 funding initiative and the 2028 Francophonie Summit.

Budget 2026 also announces the government’s intention to establish the Canada Creative Credit, a new personal income tax credit to support artists as they foster creativity, artistic production, and cultural entrepreneurship in Canada. Details are listed below.

Key Items of Relevance

CANADA COUNCIL FOR THE ARTS

To support professional artists and arts organisations in the creation, production, and presentation of theatre, dance, music, and other live performances, Budget 2026 provides an additional $20 million over 3 years starting in 2027-2028 to the Canada Council for the Arts (p.250).

ONLINE STREAMING ACT & $600 MILLION

As anticipated, Budget 2026 does not provide additional details on the previously announced $600 million in immediate support for Canada’s audio and audiovisual sectors, though it is included in the $4 billion investment over 5 years to the arts and culture sector (p.46).

The budget indicates that the new policy direction for the Online Streaming Act will ensure that the framework supports Canadian creators and cultural industries while keeping Canadian content accessible and affordable for Canadians (p.230).

CANADA 160 & CULTURAL INFRASTRUCTURE

Budget 2026 proposes $300 million in 2027–28 for a suite of Canada 160 initiatives supporting Canadian stories, spaces and experiences. The Canada 160 Fund will support signature anniversary experiences, Heritage Minutes, the Trans Canada Trail and community spaces. This amount includes $100 million sourced from existing Build Communities Strong Fund resources (p. 225).

The budget also proposes:

• $10 million in 2027–28 for Building Communities through Arts and Heritage.
• $15 million in 2027–28 for the Canada Arts Presentation Fund.
• These investments support local festivals and performing arts events marking Canada’s 160th anniversary. They are one-year allocations, rather than permanent program increases (p. 226).

Together, the Canada 160 measures total $325 million, of which $100 million comes from existing resources, leaving a net fiscal increase of $225 million.

The budget identifies several cultural and community projects proposed for support through the Build Communities Strong Fund, including:

• Chinese Canadian Museum – Wing Sang Building Rooftop Garden Revitalization, Vancouver;
• ArtsCommon 118, Edmonton;
• Globe Theatre, Regina;
• Le Pantoum renovations and upgrades, Québec;
• Bright’s Grove Library expansion, Sarnia;
• Annie-Saint-Arneault Library renovations, La Tuque;
• Community Cultural Wellness Centre, Happy Valley-Goose Bay; and
• NorthWest Regional Recreation, Event and Emergency Protection Complex, Beauval.

The budget does not identify a new dedicated cultural infrastructure envelope or a specific replenishment of Direct Delivery funding for arts projects (p. 205–206).

Separately, Budget 2026 proposes $1.5 billion over nine years through BCSF for the construction, expansion, retrofit and rehabilitation of community recreational facilities and ice rinks. This includes $750 million for ice rinks and $750 million in additional funding for other community recreational facilities (p. 227).

TAX MEASURES FOR THE CULTURAL SECTOR

To complement the government’s broader efforts to support a strong and competitive Canadian arts, culture, and media sector, Budget 2026 announces the government’s intention to:

• Create a new Canada Creative Credit, which will be a non-refundable personal income tax credit that would, combined with the Basic Personal Amount, provide tax recognition on up to $45,000 of annual qualifying net business income derived from original and creative artistic works. Details will be announced in the Spring Economic Update 2027 (p. 227).

• Create a new Productivity Mega Deduction will help Canada’s producers and storytellers invest in the equipment and technologies they use to create, including cameras, lighting and sound equipment, mixing consoles, editing workstations, projection equipment, and stage infrastructure (p. 114).

NATIONAL MUSEUMS & CANADA STRONG PASS

To ensure that Canadians can explore and learn about Canada’s history, culture, and natural beauty, Budget 2026 includes the following measures (p. 228-229):

• $76 million in 2027-2028 for the renewal of the Canada Strong Pass which will be enhanced to expand discounted access to Indigenous-led museums and cultural centres;
• $46.3 million over five years starting in 2026-27 to permanently make admission to Canada’s national museums free year-round for children and youth under 25;
• $783.1 million over five years, starting in 2026-27, to support Canada’s national museums, the National Battlefields Commission, the National Arts Centre, and Library and Archives Canada;
• $60 million over four years, starting in 2027-28, to the National Gallery of Canada to expand opportunities for Canadians to access and engage with Canada’s arts, culture, and heritage, both in person and online.

CANADIAN STORIES, JOURNALISM & MEDIA

To support Canadian creators Budget 2026 includes the following measures (p. 229-330):

• $32.2 million over four years, starting in 2027-28, and $9.5 million in future years, to make it easier for Canadians to discover and borrow books by Canadian authors by establishing a free national digital collection.
• $20 million over four years, starting in 2027-28, and $5 million ongoing to renew the Canada Book Fund.

To strengthen local journalism and help people in rural, remote, and underserved communities access trusted news, Budget 2026 includes the following measures (p. 230):

• An additional $300 million over two years, starting in 2026-27, to CBC/Radio-Canada to strengthen its capacity to meet the evolving needs of Canadians across the country;
• $134 million over four years, starting in 2027-28, and $41 million ongoing to the Canadian Heritage for the Local Journalism Initiative, supporting independent, reliable, and diverse local news organisations across the country.

To help Canadians continue to access trusted local news and information through a wide range of media platforms, Budget 2026 includes the following measures (p. 231):

• $501 million over five years, starting in 2026-27, and $85 million ongoing to the Canadian Journalism Labour Tax Credit, including:

  • The renewal of temporarily enhanced 35% credit rate to the Canadian Journalism Labour Tax Credit for print journalism— for two more years, until December 31, 2028.

  • The extension of the Canadian Journalism Labour Tax Credit to qualifying private audio and audiovisual news organisations, in line with support provided to news organisations that produce written news. They would be eligible for the same temporarily enhanced credit rate of 35% and annual labour expenditure limit of $85,000 per employee. These changes would be effective for labour expenses incurred on or after Budget Day.

FRANCOPHONE CULTURE

To celebrate Canada’s linguistic and cultural diversity, Budget 2026 includes the following measures (p. 232):

• $393.2 million over three years, starting in 2027-28, to 10 federal departments and agencies to advance Canada’s Francophonie leadership objectives, as well as support the logistics and security required to host the 2028 Francophonie Summit.

COPYRIGHT & ARTIFICIAL INTELLIGENCE

As with last year’s budget, the government proposes to amend the Copyright Act to create an Artist’s Resale Right in Canada, ensuring Canadian visual artists benefit from future sales of their work (p.367). No other copyright changes are listed.

In the field of artificial intelligence, Budget 2026 includes the following measure (p. 272):

• $6.2 million over four years, starting in 2027-28, to Innovation, Science and Economic Development Canada to support Canada’s continued participation in the Global Partnership on Artificial Intelligence via the International Centre of Expertise in Montréal on Artificial Intelligence.

ADDITIONAL TAX MEASURES

To streamline the approval process prescribed by the Income Tax Regulations, Budget 2026 proposes to (p.422):

• Amend the Income Tax Act to allow the following matters to be designated by ministerial authority rather than prescribed by the Income Tax Regulations. Certain administrative requirements for charities and other qualified donees would be designated by the Minister of National Revenue, including the content of donation receipts and which organizations are considered as prescribed donees, effective 90 days after royal assent of the enacting legislation.

• Streamline the approval process for foreign charities by amending the Income Tax Act to remove the requirement that the Minister of National Revenue consult the Minister of Finance before registering a foreign charity as a qualified donee, effective on royal assent of the enacting legislation.

EMPLOYMENT INSURANCE

Major transfers to persons are projected to grow at an average of 4.1% per year from 2026-27 onward, increasing from $153.4 billion in 2026-27 to $180.2 billion in 2030-31 (p.333):

• EI benefits are projected to reach $32.9 billion in 2026-27, up 14.1%, and continue to increase by 1.6% on average annually. Higher EI benefits in 2026-27 largely reflect new tariff support measures that expanded access to EI benefits. Over the forecast horizon, growth in EI benefits is supported by growth in average weekly earnings and by new measures announced in this budget.

Overall Budget at a Glance

Budget Themes 

Budget 2026 is organised around the theme of economic sovereignty. The title, Masters of Our Destiny, reflects the government’s argument that Canada must build greater economic strength at home as established trade relationships and alliances become less predictable. The budget connects this objective to domestic production, critical supply chains, natural resources, energy and food security, defence capacity and the diversification of export markets. 

The government describes energy, economic, national and food security as increasingly interconnected. Its response combines the responsible development of natural resources with expanded domestic manufacturing, stronger critical supply chains, protection for strategic industries, and reduced dependence on individual export markets. 

Affordability remains a supporting theme. The budget offers a one-time boost to the Canada Groceries and Essentials Benefit in early 2027 ($4.1 billion), expands the benefit for low-income workers so more people qualify ($2.1 billion), and makes the caregiver tax credit full refundable so low-income caregivers can claim it ($845 million). The largest new affordability item is $11.2 billion over four years to end homelessness within a decade. That proposed money would fund new mental health and addictions facilities. The budget also includes measures on housing supply and immigration. The new immigration plans hold targets steady at 380k permanent residents and 370k temporary residents a year from 2027 to 2029, with a continued focus on economic immigration to fill regional and sector labour gaps. It also opens up a path for up to 200,000 temporary residents already in Canada to become permanent residents by the end of 2027.  

Legislative Items 

• Legislative changes to support the transition to the new operating concession model for Canadian airports.  
• Amendments to the Patent Act. 
• Amendments to the Canada Strong Fund, to authorize funding from general government revenues and to allow the sale of a retail investment product.
• Amendments to allow the Canada Revenue Agency to provide income verification services. 
• Prohibition on the issuing of stablecoins by federally regulated financial institutions. 
• Amendments to the Copyright Act to create an Artists’ Resale Right. 
• Legislation to establish Digital Transformation Canada as a successor organization to Shared Services Canada.  

Fiscal Position 

Budget 2026’s fiscal and economic projections are largely aligned to those delivered in the Spring Economic Update. GDP growth projections differ only slightly, with growth for next year projected at 1.7%, down from 1.9% in the spring. The deficit for 2026-27 is projected at $63.3 billion, down slightly from the $65.3 billion forecast in the spring. Deficit projections for future years have fallen slightly, but the Budget contains no forecast for a return to surplus. Debt-to-GDP ratio is at 41.5% for this year and will remain above 41% for the coming years.  

View Full Budget

PAA and PACT are reviewing the budget in detail to assess its impact on our members and identify opportunities for continued advocacy. PACT will be issuing its response to the 2026 Federal Budget in the days ahead. 

PACT Town Hall - November Edition

On Thursday, November 12 at 1:00pm ET our friends at PAA will go over the budget and answer any quesitons at our November Town Hall. This session is open to all! 

Register Now

Related News