Millions of Canadians could receive another one-time grocery benefit payment early next year under a federal budget that projects a $62.3-billion deficit in 2026-27.
The proposed payment would provide up to $339 for eligible single people without children and up to $679 for couples with two children.
Finance Minister François-Philippe Champagne tabled the budget Thursday, Nov. 5, outlining measures to reduce household costs, encourage business investment and support the Canadian economy amid U.S. tariffs and global uncertainty.
The deficit is about $3 billion lower than forecast in the federal government’s spring economic update.
The budget includes spending and financing commitments for housing, infrastructure, energy, critical minerals, defence and Indigenous communities.
Grocery benefit supplement and affordability measures
The budget proposes a one-time 50 per cent increase in the Canada Groceries and Essentials Benefit for the 2026-27 benefit year, with payments expected in early 2027.
The supplement would provide an estimated $4.1 billion in additional support to more than 12 million Canadians with low and modest incomes.
The benefit, which replaced the GST/HST credit, was increased by 25 per cent for five years beginning in July 2026. Eligible recipients also received a separate one-time supplement in June.
Combined with those earlier measures, the proposed 2027 payment would bring total support for the 2026-27 benefit year to approximately $1,290 for an eligible single person without children and $2,570 for a couple with two children.
The budget also incorporates affordability measures announced earlier this year, including more than $2 billion over eight years for the National Heat Pump Rebate Program.
The program is intended to help as many as 820,000 households install heat pumps and reduce heating costs.
Other previously announced measures include the temporary suspension of the federal fuel excise tax and a federal income tax rate reduction that the government says benefits nearly 22 million Canadians.
The budget also includes GST relief for eligible first-time buyers purchasing newly built homes.
Deficit projected at $62.3 billion
The federal government forecasts a deficit of $62.3 billion in 2026-27, followed by a slightly higher shortfall of $62.5 billion in 2027-28.
The deficit is projected to decline to $57.6 billion in 2028-29, $53.4 billion in 2029-30 and $52.9 billion by 2030-31.
Ottawa expects the annual deficit to decline from 1.8 per cent of gross domestic product in 2026-27 to 1.3 per cent by 2030-31.
The government also projects that its day-to-day operating spending, calculated separately from capital investments under its fiscal framework, will be balanced by revenues beginning in 2027-28. That is one year earlier than previously forecast.
However, the federal government expects to record overall deficits throughout the five-year forecast period.
The budget identifies U.S. trade restrictions, global supply disruptions and geopolitical uncertainty as risks to Canada’s economic outlook.
Ottawa also plans to reduce the growth of direct program spending.
Housing and homelessness
The budget proposes billions of dollars in housing investments aimed at expanding construction, supporting affordable housing and addressing homelessness.
Ottawa proposes an additional $13 billion over 10 years, on a cash basis, beginning in 2028-29 to expand Build Canada Homes, the federal agency responsible for supporting housing construction.
The government says the additional funding would help put the agency on a path to deliver 200,000 homes over the next decade, bringing its total capitalisation to $45 billion.
The budget also proposes $1.5 billion over four years, beginning in 2027-28, to prepare federal lands for residential development. The funding would help pay for roads, water systems, wastewater infrastructure and other services needed before housing can be built.
Ottawa is also setting a goal of ending homelessness within 10 years through partnerships with provinces, territories, municipalities and community organizations.
The plan proposes $11.2 billion over four years, beginning in 2027-28, with another $17.8 billion in future years for housing, homelessness prevention and related supports.
It includes supportive and transitional housing, assistance for people at risk of homelessness and projects connecting housing with health care, mental health and addictions services.
Jobs, business investment and forestry
The budget provides more details about the $25-billion Canada Strong Fund, announced in the spring economic update.
The proposed fund would invest alongside private investors in Canadian companies and major projects, with the goal of supporting domestic investment and generating long-term financial returns.
Ottawa plans to establish the fund as an arm’s-length Crown corporation, initially providing $25 billion over three years.
The budget also proposes $6.5 billion in spending and financing over six years, beginning in 2027-28, to support Canada’s forestry industry.
That includes $500 million to strengthen fibre supply chains, $2 billion to help forestry companies upgrade equipment and facilities and $4 billion in financing through Export Development Canada for larger industrial projects.
The measures are intended to improve productivity, expand manufacturing capacity and support the development of higher-value forest products.
Indigenous communities
The federal government proposes more than $32 billion over 10 years for First Nations housing and infrastructure.
The funding includes $18.5 billion for a new First Nations On-Reserve Infrastructure Program to support roads, bridges, schools, health facilities and water systems.
Another $11 billion would support the maintenance, repair and construction of housing in First Nations communities, while an additional $1.7 billion would help accelerate projects ready for construction.
The budget also proposes funding for Indigenous education, health, children and families.
That includes $5.8 billion over five years for First Nations elementary and secondary education, $6 billion over six years for Jordan’s Principle and $2.9 billion over three years for health benefits available to eligible First Nations and Inuit people.
Additional measures would support Indigenous policing, community safety and greater Indigenous participation in major economic projects.
Immigration
The federal budget sets immigration targets of 380,000 permanent resident admissions annually from 2027 through 2029.
The plan also targets 370,000 new temporary resident arrivals each year over the same period.
Ottawa proposes $56.9 million over four years, beginning in 2027-28, to help implement the immigration plan, with additional funding planned for later years.
The government also proposes measures that would allow as many as 200,000 temporary residents already in Canada to obtain permanent residency by the end of 2027.
The immigration plan is intended to balance labour market demands with pressures on housing, health care and public services.
Energy, critical minerals and infrastructure
Ottawa’s national electricity strategy includes more than $50 billion in investments and financing measures intended to expand electricity production, support clean technology and encourage private investment.
The government has set a goal of doubling Canada’s electricity grid capacity by 2050.
The budget proposes $518.5 million over five years, beginning in 2027-28, to implement a nuclear energy strategy focused on domestic supply chains, research, workforce development and regulatory capacity.
It also proposes $424.4 million over four years to renew the Canadian Critical Minerals Strategy and support mining, processing and domestic supply chains.
That builds on the $2-billion Canada Critical Minerals Accelerator announced earlier this year.
For electric vehicles, Ottawa proposes $587 million over five years to support the installation of more than 55,000 additional charging stations.
A further $45 million would support charging infrastructure research and development, while $2.2 million would assist with the transition of the federal vehicle fleet to zero-emission vehicles.
Defence and national security
Defence spending is another major component of the budget as Canada works toward higher NATO spending commitments.
Ottawa proposes $7.6 billion over five years, beginning in 2026-27, to extend and expand Operation REASSURANCE, Canada’s military deployment supporting NATO allies in Eastern Europe.
The funding would come from existing Department of National Defence resources.
The government also proposes $2.3 billion over five years, beginning in 2027-28, for a Defence Drone Initiative.
The initiative would support the development, acquisition and deployment of unmanned military systems and technologies designed to counter them.
Canada says it is working toward spending four per cent of GDP on defence within this decade.
The government has also committed to meeting NATO’s broader five-per-cent spending target by 2035, which includes conventional defence spending and related security and infrastructure investments.
The full budget, including detailed spending commitments, fiscal projections and proposed tax changes, is available through the Government of Canada’s Budget 2026 website.
