Carney budget to focus on tax reforms for growth
Prime Minister Mark Carney’s second budget, due 5 Nov, will prioritise tax measures aimed at innovation, competitiveness and small‑business relief, signalling a shift from the Trudeau era.
Ottawa sources say the upcoming budget will focus on tax reforms designed to boost investment and raise Canadians’ standard of living. A senior government source described it as a "growth and competition budget" intended to create an "investment super‑cycle in Canada."
Tax measures and the productivity mega‑deduction
The plan is expected to formalise the productivity mega‑deduction announced at a Toronto investors’ summit, which the government estimates will cost $36.5 billion over five years and cut the projected tax rate on new investment to about 6.4 percent from 13 percent. Business Council of Canada CEO Goldy Hyder called the deduction "a major step forward for competitiveness and investment."
Impact on small and medium‑sized firms
Sources say the budget will also target red‑tape reduction and possible changes to capital cost allowance rules, helping firms write off machinery, equipment and buildings more quickly.
Fiscal context
Finance Minister François‑Philippe Champagne has said Canada’s strong fiscal position allows room for growth‑oriented spending, even as the 2025‑26 deficit is projected at $66.9 billion, down from $78.3 billion after a windfall from higher oil prices.