Help with cost of living expected to be Mark Carney’s top priority in federal budget - Toronto Star

A $36-billion business tax break is coming. Will the budget also help Canadians struggling to afford groceries?

Canada’s Finance Minister Francois-Philippe Champagne chooses a new pair of shoes with the help of Pajar CEO Jacques Golbert as part of a tradition observed the day before the federal budget presentation, at the Pajar facility in Montreal, Que. on Nov. 4, 2026. 

OTTAWA — Having just seen, in the U.S. midterm elections, the political price of a public struggling with the cost of living, the Carney government is expected to table an annual budget Thursday that seeks to reassure Canadians that Ottawa is here to help. 

The new fiscal blueprint is being packaged in advance as the vital next step in what Prime Minister Mark Carney has promised since he took office last year: to transform Canada into a beacon for business investment, with faster construction of major projects, less burdensome climate policies and federal regulations, and a stronger economy that no longer relies on the unpredictable United States for so much of its prosperity. 

However, the budget lands in a precarious moment. The Bank of Canada has just raised interest rates for the first time in three years, making mortgages and debt payments more expensive, as fuel costs that spiked after U.S. President Donald Trump’s war on Iran drive up inflation. The Salvation Army’s national poverty survey, published this week, suggested a growing number of Canadians are skipping meals or making them smaller because they can’t afford groceries. 

Donning a new pair of prebudget shoes on Wednesday, as is political tradition, Finance Minister François-Philippe Champagne told the cameras that helping people struggling with the cost of living is “priority number one” ahead of the new federal budget. 

Finance Minister Francois-Philippe Champagne gestures as he chooses a new pair of shoes with the help of Pajar CEO Jacques Golbert as part of a tradition observed the day before the federal budget presentation, at the Pajar facility in Montreal, Quebec, Canada, November 4, 2026. 

He cited how the Iran war has choked oil shipments from the Middle East, the impacts of Russia’s war on Ukraine, as well as steep tariffs imposed by the Trump administration. 

“This has put pressure on households,” Champagne said in French. “We’re still talking about the cost of housing, we’re talking about the cost of food, we’re talking about the cost of gas ... It’s clear that we are very conscious that the issue of affordability — it’s an important issue for all the households in the country.” 

Tuesday’s vote in the U.S. underscored those concerns in that country, as Democrats who argued that the war against Iran and Trump’s tariffs have jacked up prices took control of both houses of the U.S. Congress in a landslide election. 

On Parliament Hill Wednesday, Conservative Leader Pierre Poilievre took a similar tack against Carney. He blamed him for failing to reverse “Liberal inflation” that was seen when Justin Trudeau was in office. 

Conservative Leader Pierre Poilievre rises during Question Period in the House of Commons on Parliament Hill in Ottawa on Wednesday, Oct. 28, 2026.

“After a year and a half of Mark Carney, everything’s worse. You go to a grocery store, nothing costs less, even though he promised he would be judged by the prices of those grocery stores. Homebuilding is down, not doubled as he promised,” Poilievre said.

The Conservatives are demanding the government cut “wasteful” and “inflationary” spending, including plans to build the Alto high-speed rail line that could cost more than $100 billion. The party also wants to see all federal taxes on gas suspended, and a permanent end to the sales tax on top of the excise tax the government has already lifted until the end of January. 

“Never has it been so bad,” Poilievre said. “Mark Carney is out of touch.”

The Bloc Québécois, meanwhile, is demanding the Liberals double the existing “groceries and essentials” tax credit, boost funding for public transit and abandon plans to privatize the operations of major airports — a proposal that has raised concerns about increasing the cost of travel. 

Speaking to reporters Wednesday, NDP Leader Avi Lewis also took aim at the cost of living, accusing Carney of favouring corporate interests with climate policy rollbacks and tax breaks while regular people are “struggling desperately” to get by. 

NDP Leader Avi Lewis speaks in the in the Foyer of the House of Commons on Parliament Hill in Ottawa, on Wednesday, Nov. 4, 2026.

The NDP wants to see a new “wealth tax” imposed on people with assets worth more than $10 million, a tripling of federal spending on community housing to $18 billion over 10 years, a $12-billion increase of federal health transfers to provinces over five years, the creation of a national network of public grocery stores, and the extension of federal pharmacare coverage to all provinces (it currently only applies in three). 

“In VIP-only rooms, Prime Minister Carney has chased deal after big-money deal, dismantling public services and climate protections to secure them,” Lewis charged, before warning discontent similar to that seen in the U.S. election could come to scar Carney’s popularity.

“There are cautionary tales here for our own prime minister,” he said. 

One government source, who spoke about Thursday’s budget on condition of not being named, said new measures to address cost of living concerns will be revealed in the new fiscal plan, but the source would not disclose details. Maytree, an anti-poverty group in Toronto, said by email Wednesday that they expect new supports for low-income Canadians and efforts to reduce homelessness. 

Under the title “Masters of Our Destiny,” the budget will also focus on supporting cultural sectors, the government source said, again declining to provide specifics. 

The Bloc, however, is calling for the reinstatement of rules requiring major online streamers to put money into funds for Canadian content, which the government, in tariff talks with the Trump administration, placed under review this year. The opposition party also wants the Carney government to disburse $600 million to the audiovisual sector that the government promised months ago. 

On Wednesday, Culture Minister Marc Miller predicted that the cultural sector would be satisfied with Thursday’s budget, but he did not reveal any details. 

Another section of Thursday’s budget will deal with “growth,” the government source said. It’s a perennial theme for the Carney Liberals, who have promised to double exports to non-U.S. countries and make Canada the fastest-growing economy in the G7. However, the budget is also coming as groups like the Canadian Federation of Independent Business (CFIB) express hope the government will shift away from policies that the CFIB’s head has said seemed tailored to help larger corporations. 

A major chunk of new spending expected in Thursday’s budget will be for the “productivity mega deduction” that the prime minister announced in September while hosting a global investment summit in Toronto. At $36 billion over five years in anticipated forgone revenue, the policy will allow a wide range of businesses — from oil production to heavy manufacturing — to more quickly get tax breaks for making capital investments. 

The budget is also expected to include new details for how the “Canada Strong Fund” will work. The government vowed to create the fund earlier this year, but has not yet explained key aspects of the initiative, including a promised method for the general public to put their own money into the investments the fund is supposed to make, as well as how it might be involved in privatized airport operations. 

Robert Glasgow, a partner in trade and customs at KPMG Canada, said those measures have fuelled expectations of a “pro-business budget,” even if it doesn’t include a host of new measures beyond those already announced in recent months. 

Earlier this week in Toronto, however, Champagne hinted there is more to come, referring to the complexities of Canada’s tax system and stating the budget would “simplify the life of small- and medium-sized businesses.”

The Canadian Chamber of Commerce, meanwhile, is looking for a “big swing on tax,” with vice-president of government relations David Pierce saying the organization hopes for a slew of changes. These include increased capital cost allowances — tax deductions on long-term assets that businesses own — and steps to make compliance with the Canada Revenue Agency less onerous, Pierce said. 

Robert Asselin, chief executive officer of the association of universities U15 Canada, said he hopes the government will broaden its focus to spur “innovation” through measures like linking top researchers with defence companies as part of Carney’s Defence Industrial Strategy. 

“He inherited a situation where business had lost a lot of confidence in our ability to create growth,” Asselin said, referring to perceptions when Justin Trudeau was in power. 

“To the extent that the federal government can do anything about these things, I think he’s done almost everything he could do. The question, the reasonable question is, is that enough in itself?”

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Alex Ballingall is the Deputy Ottawa Bureau Chief for the Star. Reach him via email: aballingall@thestar.ca

Tonda MacCharles is Ottawa Bureau Chief and a senior reporter covering federal politics. Follow her on Twitter: @tondamacc.