Top lines
- The Carney government can afford to invest in workers and public services.
- Instead, this budget paves the way to privatize what we’ve built together over generations, like health care and airports.
- The Carney government’s inadequate increases in health and social transfers won’t preserve existing services like health care and child care, let alone improve them.
- Life will get harder and less affordable for workers, while billionaire investors pocket hefty profits.
The trade war with the United States has hurt industries, workers and communities. But worst-case scenarios have not come to pass, leaving the federal government on stronger financial footing. The budget deficit and the federal debt are smaller than expected, when compared to the overall size of the economy. Despite colossal tax cuts, revenues are up and should grow by 3% more than expected next year.
That doesn’t mean Canada is out of the woods. There are potential economic storms on the horizon caused by global political instability, the climate crisis and the rapid spread of AI and other technological changes.
With an unexpectedly good balance sheet and concrete economic challenges ahead, the federal government had an obvious option: invest in the people who make Canada strong.
That’s not what Budget 2026 does.
Instead, it paves the way to privatize assets Canadians built and paid for over generations. It talks a lot about affordability, but only offers band-aid solutions. And it underfunds vital public services that create jobs and set our economy up for success.
Budget 2026 weakens our economy. While some measures in this budget are positive, on the whole it fails to invest in the workers and public services.
Privatization
Budget 2026 is a bonanza for billionaire investors. It advances plans to sell off control of Canada’s four major airports, with the revenue going into the Canada Strong Fund. The budget spends $37.6 million over the next three years on the blueprint to hand a first airport to private investors, including pension funds, in a 40- to 50-year deal that will be used to fund the Canada Strong Fund.
The budget signals a bigger privatization spree of federally owned assets is coming. The new sovereign “wealth” fund will largely be built by profiting off public infrastructure and other public assets to subsidize private profits and spark privatization. This fund siphons off public wealth to create an endless loop of privatization. It also opens the door wider to private investment from the life insurance industry in public infrastructure.
The budget announces a change to the Canada Infrastructure Bank (CIB) that could mean the end of its legal mandate to attract private investors. In which case, the CIB would no longer act as a driver of privatization. More details are needed.
Failing grade on child care, health care and post-secondary education
Budget 2026 doesn’t change the slow, partial and uncertain rollout of the federal child care program. Earlier this year, the government announced a two-year injection of $5.4 billion for the Canada-wide Early Learning and Child Care program. This fell far short of what is needed for the full implementation of the program, including improved working conditions for the workers who deliver it.
Budget 2026 recycles that announcement and delivers no new funding while allowing the child care infrastructure fund to expire. Without a long-term plan to recruit more workers and build new facilities, the program risks falling apart.
While announcing colossal tax cuts, Budget 2026 sticks to the plan to cut health care funding by $1.8 billion annually in the coming years. This will only ramp up pressure to privatize by further starving the system.
Budget 2026 ignores the funding crisis facing Canadian universities and colleges. While it includes new funding for some apprenticeship initiatives, these are once again treated as standalone programs rather than as efforts to expand public post-secondary capacity.
Productivity Mega Deduction
The Productivity Mega Deduction is a blank cheque for corporate Canada. It lets businesses deduct the full cost of capital investments from their taxes at once, rather than over time.
The government argues this will fuel more investment and create new jobs, but that’s wishful thinking. Capital-intensive industries, like oil and gas, will benefit most, while labour-intensive industries may not. Profitable firms will receive tax credits for investments they were already planning to make, and there is not even a requirement to buy Canadian.
In the absence of an industrial policy to shape investments and ensure job creation, this is a giveaway that may simply boost profit margins of national and international corporations operating in Canada. Over the next five years, this deduction will cost $36 billion. The annual cost of this deduction is more than double the annual increase in health care spending.
Housing
Budget 2026 takes noticeable steps toward tackling homelessness, investing $11.2 billion over the next four years in supportive housing, mental health and wraparound services, the veterans’ homelessness program and the renewal of the Canada Housing Benefit. Funding doesn’t start until 2027-28, an unjustifiable choice given the urgent need for action.
How the money is spent matters. At this point, there is no guarantee that these funds will go only to the municipal and not-for-profit service providers with the experience to tailor support programs to individuals and communities. Profit-seeking providers are less likely to deliver effective programs.
When it comes to building non-market housing, Budget 2026 continues the tradition of piecemeal funding and a lack of clarity about the definition of affordability. Also, it will be delivered through Build Canada Homes, which has mostly provided funding to housing projects already in the development pipeline.
Municipalities
Budget 2026 offers no help to municipalities. Infrastructure announcements suggest future funding will still be tied to the red tape of expensive and risky public-private schemes. It also earmarks $100 million over three years for AI adoption in housing permitting, which could lead to job cuts and the sidelining of vital planning expertise.
Electricity
CUPE has long called for an East-West electricity grid powered by clean energy. Budget 2026 makes important investments to help build out such a grid by increasing Canada’s electricity generation and deepening regional integration.
It expands the Clean Electricity Investment Tax Credit to include intra-provincial electricity transmission, an initiative that could increase our energy independence by strengthening our internal networks instead of relying on the U.S.
However, by neglecting to focus on investing in more publicly owned electricity infrastructure, Budget 2026 misses an opportunity to stop the fragmentation of public power corporations and to boost our energy sovereignty.
Communications
Budget 2026 recognizes the importance of radio and TV news organizations by making them eligible for the journalism tax credit. It also extends an increase in the credit from 25% to 35% for another two years. Unfortunately, it contains no measures to protect jobs in this industry from subcontracting overseas.
Migrant rights
Canada has 2.15 million people living here on work or study permits. Budget 2026 adds 200,000 new permanent residents — less than 10% of this group. CUPE has thousands of members in sectors including health care, long-term care, child care and education who already have been or will be forced to stop working because they cannot extend their work permit or access a route to permanent status. Many of these sectors are experiencing critical labour shortages.
Pensions
The attacks on workers in Budget 2026 include moving ahead with cuts to federal public service workers’ pensions, disingenuously presented as “modernization.”
Budget 2026 advances the interests of corporations, not of the workers, families and communities on whom the country’s economy truly depends.
