Canada's new budget boosts investment to reduce dependence on the U.S.

Canada's Ministry of Finance released the 2026 budget in the capital Ottawa on the 5th. This budget, themed "Seizing Our Own Destiny," introduces a series of measures, including substantially cutting the tax burden and launching the country's "investment supercycle," in order to enhance national economic autonomy and international competitiveness and reduce dependence on the United States. The budget declares that Canada-U.S. relations cannot return to the past and that Canada's economy cannot continue to be the U.S. market; although reducing dependence on the U.S. will take time, the transformation has already begun. According to the budget, in order to attract global investment and boost domestic productivity, the Canadian government plans to introduce major tax policy reforms such as the "productivity super deduction," sharply lowering Canada's marginal effective tax rate on new business investment from 13% to 6.4%, driving 400 billion Canadian dollars in capital investment over the next six years. According to the budget, the Canadian government plans to invest 50 billion Canadian dollars to double grid capacity by 2050; at the same time, it will increase investment in nuclear energy and critical minerals to consolidate its position as a global energy power. According to the budget, the federal government expects the fiscal deficit for the 2026-2027 fiscal year to reach 62.3 billion Canadian dollars, with annual deficits exceeding 50 billion Canadian dollars in each of the next four years. The budget will push Canada to implement two fiscal targets: achieving a balanced day-to-day operating budget in the 2027-2028 fiscal year, one year earlier than originally planned, while keeping the deficit as a share of gross domestic product on a continuous downward path.