Liberals table Budget 2026 with immigration plan, productivity measures Finance Minister Francois-Philippe Champagne tabled Budget 2026 on Thursday, the second budget under Prime Minister Mark Carney, including an immigration levels update and the productivity mega deduction. Finance Minister Francois-Philippe Champagne tabled Budget 2026 in the House of Commons on Thursday afternoon. The budget is the second tabled under Prime Minister Mark Carney and is named Maitres chez nous, or masters of our destiny. The Liberals are presenting the document as the next step toward fixing long-standing problems in Canada's economy. It includes new spending items alongside an update on the federal government's immigration levels plan. After the budget is tabled, members of Parliament will debate the legislation for weeks and could seek amendments or carve-outs from the wider document. With a majority government, the Liberals are in a strong position to get their budget approved.Boosting Productivity And InfrastructureUnder Carney, the Liberals have vowed to boost productivity, stoke private investment and build out infrastructure to help Canadian businesses reach new markets. Champagne said the budget is about changing Canada's growth model. Ottawa frames its higher defence and infrastructure spending as a response to U.S. President Donald Trump's trade aggression and other geopolitical volatility. The government argues the goal is economic sovereignty.Analysts expect the federal government to keep borrowing and run relatively deep deficits. The aim is to reduce economic dependence on the United States while supporting tariff-afflicted industries. An annual deficit is the additional debt a government takes on in a fiscal year to cover its spending commitments. Over time, growing deficits without a plan to reduce that debt can affect a country's sovereign credit rating, making borrowing even more costly.The parliamentary budget officer already predicts debt-servicing costs will be the fastest-growing expense on the government's balance sheet. Critics warn that high debt costs, if left unchecked, can crowd out other spending priorities and limit Canada's ability to respond to future shocks. The Liberal government regularly cites Canada's strong sovereign credit rating compared with many G7 peers to justify its borrowing plans.Poilievre Criticizes Government DeficitsConservative Leader Pierre Poilievre has been a vocal critic of the government's deficits and is calling on Carney to curb what he calls out-of-control spending in the budget. The Liberals have committed to reducing spending on day-to-day government operations so that eventually federal borrowing goes solely toward capital investments like major projects. They have also pledged to shrink deficits as a share of the economy.Most fiscal experts predict Ottawa will post slightly smaller deficits in the coming years than those projected in the spring economic update in April. Even after a raft of spending announcements over the summer, higher global oil prices from the war in Iran have meant higher federal revenues are offsetting those expenses. Despite near-term improvements, observers will be looking for evidence the government is not baking permanently higher costs into its fiscal horizon.In a budget preview, analysts from the Institute of Fiscal Studies and Democracy at the University of Ottawa argued that Budget 2026 needs to explain how a higher track for government borrowing will produce measurable economic results. A key goal in the Liberal plan is to attract more private investment from inside and outside Canada. Many business leaders have ramped up calls for tax reform to encourage that kind of investment.Major Spending Items And Tax DeductionsOne major spending item was already announced in September: the so-called productivity mega deduction. This expanded incentive encourages businesses to invest in new equipment and machinery in exchange for upfront tax writeoffs and is expected to cost 36 billion dollars over five years. In a speech to business leaders on Monday, Champagne indicated the government also plans to eliminate some tax pains for small and medium-sized businesses.For more than a decade, Canada's growth model has meant productivity levels that lag far behind the United States and other peer countries. Much of the Liberals' investment agenda is aimed at giving businesses the impetus to invest in better tools for their workers, a path most economists argue is a way to boost productivity.Bank of Canada senior deputy governor Carolyn Rogers, who sounded the alarm on the nation's productivity emergency two years ago, told MPs on Tuesday that the central bank was seeing signs of progress on the productivity front but there is more work to do. Ahead of the budget, Champagne toured a Pajar shoe factory in Montreal on Wednesday alongside owner Jacques Golbert, trying on a new pair of shoes as the government promoted its manufacturing agenda.Budgets detail a government's expectations for economic growth and the projected pace of spending and borrowing. They are also political documents that can serve as a launching pad for legislation and policy initiatives.