Canada unveils 2026 budget with C$45 billion housing plan, higher borrowing and slower growth forecast Canada's 2026 budget includes C$45 billion in housing affordability measures and $25 billion to establish a new Canada Growth Fund.
Canada expects GDP growth of 1.0% for 2026, down from 1.1% previously, and 1.7% growth in 2027, down from 1.9%.
Canada projects a 2027/28 budget deficit of C$62.5 billion, compared to a forecast of C$63.1 billion in April.
The federal debt-to-GDP ratio is expected to reach 39.9% in 2026/27, rising to a peak of 40.4% in 2028/29, before falling to 40.1% in 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 bad debt.
Canada plans to issue C$316 billion in bonds and C$290 billion in Treasury bills for 2027/28 Canada will increase its Treasury bill issuance by C$16 billion in the current fiscal year.
Public debt charges are projected at C$60.2 billion in 2026/27, an increase from 1.8% of GDP to 2.2% by 2030/31.
Canada maintains a permanent resident immigration target of 380,000 per year for the next three years.
The budget includes tax incentives for successful start-ups and maintains a commitment to issuing permanent green bonds.
Canada is renewing the monetary policy framework with the Bank of Canada, reaffirming price stability as the primary objective while maintaining flexibility to respond to shocks.
Canada assumes WTI crude oil prices will average $87 per barrel in 2026 and $89 in 2027.