Key Takeaways
Canada’s 2026 federal budget introduces new and expanded funding programs and tax incentives aimed at encouraging business investment, improving productivity and supporting growth.
Key areas of investment include innovation, clean technology, housing, infrastructure, agriculture, natural resources and creative industries.
Alongside new budget measures, existing government programs continue to offer funding and financing opportunities for businesses looking to grow, modernize and compete.
Canada’s 2026 federal budget puts business investment, productivity and innovation in the spotlight, with new and expanded funding programs and tax incentives designed to encourage growth across the country. From support for clean technology and research and development to major investments in housing, infrastructure and natural resources, the budget introduces opportunities for businesses across a range of industries.
For Canadian business owners planning their next move, the budget offers new opportunities to explore funding and support growth.
Budget in Brief
Canada’s 2026 federal budget arrives against a backdrop of modest economic growth, ongoing trade uncertainty and a weakening labour market. With business investment and productivity central to Canada’s economic outlook, the government is looking to encourage private investment and stimulate economic activity.
Analysis from RBC Economics: Canadian Budget 2026: Windfall fuels spending, not savings
The budget projects a $62.3 billion deficit for 2026-27, followed by a $62.5 billion deficit in 2027–28. While deficits are expected to gradually decline in subsequent years, they are projected to total nearly $289 billion over five years.
To encourage growth, Budget 2026 introduces and expands a range of measures, including the Productivity Mega Deduction, new incentives for investment in Canadian businesses, and additional support for research and development. It also directs significant funding toward housing, infrastructure, clean energy and other priority industries.
These measures reflect the government’s ambition to encourage investment and create the conditions for stronger, more sustainable economic growth.
“The 2026 federal budget presents a timely opportunity for Canadian businesses looking to invest, innovate and grow,” says Mike Janke, Partner, Credits & Incentives, BDO Canada LLP/BDO GrantMatch Corp. “For small and medium-sized businesses, now is an important time to assess planned investments, understand which incentives they qualify for, and consider how tax incentives and available grants can work together. For larger or rapidly growing businesses, the budget will help to accelerate capital investment through the Productivity Mega Deduction and unlock new sources of growth through programs like the Canada Growth Incentive.” The goal is not simply to spend sooner, but to invest strategically and make the most of the support available.”
Here are some of the key grants, funding programs and incentives announced or expanded in Budget 2026, along with existing programs Canadian businesses can continue to explore.
1. Business growth, investment and workforce support
New and existing measures to help Canadian businesses invest in growth, navigate trade challenges and build the skills needed to compete.
Business investment and tax incentives
Productivity Mega Deduction: A permanent measure allowing businesses to immediately deduct the full cost of a broader range of eligible capital investments, including machinery, equipment and technology. The measure has an estimated fiscal cost of $36 billion over five years.
Canada Growth Incentive: A proposed new tax exemption on up to $15 million in capital gains from eligible investments in Canadian businesses, along with expanded tax-deferral opportunities for investors who reinvest in qualifying small businesses.
Scientific Research and Experimental Development (SR&ED) Tax Incentives: $930 million over five years to expand support for eligible research and development activities, including certain commercialization expenses such as regulatory testing, certification and intellectual property protection.
Trade and workforce support
Tariff Relief and Support Programs: The budget highlights approximately $44 billion in tariff relief measures and support programs made available to Canadian industries and workers since March 2025. These include financing and other support to help affected businesses adapt to changing trade conditions.
Workforce Tariff Response: $170 million in 2027-28 for targeted training initiatives developed in partnership with provinces and territories to help workers affected by tariffs and changing economic conditions develop new skills.
Regional Development Agencies: Greater flexibility for federal regional development agencies to tailor funding and support to the needs of smaller businesses and regional economies.
Existing programs to explore
Several existing programs continue to support Canadian businesses looking to access financing, adapt to trade challenges and expand into new markets.
Regional Tariff Response Initiative: Funding to help eligible tariff-affected businesses adapt operations, boost competitiveness and diversify markets.
BDC Pivot to Grow: Financing to help eligible businesses affected by tariffs manage challenges and pursue growth opportunities.
EDC Trade Impact Program: Financing, insurance and other solutions to help Canadian businesses manage trade-related risks and pursue international opportunities.
CanExport SMEs: Funding to help eligible Canadian businesses explore and develop new international markets.
Early and Growth Stage Investment Strategy: Up to $750 million in investments, announced in Budget 2025, to support innovative early-stage and growing Canadian businesses.
2. Innovation, technology and clean energy
Funding to help Canadian businesses develop new technologies, improve energy efficiency and invest in cleaner, more productive operations.
Strategic Response Fund: An additional $1 billion over six years, starting in 2028-29, to support large-scale research and development and innovation projects in Canada, including in areas such as artificial intelligence, agri-food, biomanufacturing and clean technology.
NRC IRAP Clean Technology Renewal: Renewed support through the National Research Council’s Industrial Research Assistance Program to help Canadian small and medium-sized businesses develop, demonstrate and bring clean technologies to market.
Strategic High Efficiency Industrial Facilities Program (SHIFT): $400 million over seven years to help industrial facilities and manufacturers reduce greenhouse gas emissions, improve energy efficiency and adopt clean technologies. The program was previously known as the Green Industrial Facilities and Manufacturing Program.
Deep Retrofit and Accelerator Program: $107 million over three years to support major energy retrofits of eligible commercial and multi-residential buildings, helping owners improve energy efficiency and building performance.
Zero-Emission Vehicle Infrastructure Program: $500 million over five years to support the installation of approximately 55,000 electric vehicle charging stations across Canada.
Clean Technology and Clean Electricity Investment Tax Credits: Proposed extensions of these tax credits to 2040, alongside consultations on additional incentives for eligible Canadian-made components.
Municipal AI Adoption: $100 million over three years through the Federation of Canadian Municipalities to support the use of artificial intelligence in municipal review and approval processes, potentially creating opportunities for Canadian technology providers.
Existing programs to explore
IP Assist: Support to help eligible Canadian businesses develop intellectual property strategies and protect their innovations.
ElevateIP: Support for Canadian startups looking to protect, manage and commercialize their intellectual property.
3. Housing, construction and infrastructure
Major federal investments in housing, energy and community infrastructure may create opportunities for Canadian builders, manufacturers, contractors and suppliers.
Build Canada Homes: An additional $13 billion in capital over 10 years, bringing the agency’s total capital to approximately $45 billion to support housing construction and its goal of 200,000 homes.
Strategic Response Fund – Modern Construction: $300 million over three years to accelerate the adoption of modern construction methods and help lower construction costs, supporting innovation and productivity in the housing sector.
National Electricity Strategy: More than $50 billion in support for expanding Canada’s electricity system, with the goal of doubling grid capacity by 2050. This includes $4 billion over 10 years for electricity infrastructure expansion and electrification initiatives.
Airport Capital Assistance Program: Expanded eligibility to include smaller airports within the National Airports System, helping support infrastructure improvements and regional transportation needs.
Canada Strong Fund: A proposed $25 billion national sovereign wealth fund to invest in nation-building projects and high-growth Canadian companies, alongside private investors.
While some of these investments may create contracting and supplier opportunities, they are not all direct grants to businesses. Eligibility and procurement opportunities will depend on the individual program or project.
4. Agriculture, forestry and natural resources
Programs and investments to help Canada’s agriculture and resource-based industries modernize operations, boost production and pursue new opportunities.
Agriculture and food production
National Food Security Strategy: Approximately $3.2 billion in programs and funding announced over 10 years to strengthen Canada’s food security, support domestic production and improve the resilience of the agriculture and agri-food sectors.
Wine Sector Support Program: $176.9 million over three years to renew support for Canada’s wine sector, helping eligible producers adapt to industry challenges and build competitiveness.
Forestry
Forest Sector Transformation Strategy: $6.5 billion over six years to help modernize Canada’s forest sector, improve productivity, strengthen fibre supply and expand the production of higher-value forest products.
The strategy includes:
Forestry Modernization Support: $2 billion through Natural Resources Canada to help forestry businesses modernize facilities and equipment, improve productivity and expand production.
Forest Accelerator Program: $4 billion over six years through Export Development Canada to support large-scale investments in new facilities and the transformation of existing operations, including biorefineries and biofuel facilities.
Critical minerals and nuclear energy
Critical Minerals Strategy: $2.3 billion in new funding to strengthen domestic critical mineral production and processing, support strategic investments and build more resilient supply chains.
Mineral Exploration Tax Credits: Five-year extensions, through 2032, of the Mineral Exploration Tax Credit and Critical Mineral Exploration Tax Credit to encourage investment in mineral exploration.
Nuclear Energy Strategy: $518.5 million over five years to bolster Canada’s nuclear research, domestic supply chains, workforce and regulatory capacity. This includes funding through Natural Resources Canada for supply chain development, research and reactor readiness.
Existing programs to explore
AgriStability: An existing federal-provincial-territorial program that helps agricultural producers manage significant declines in farm income.
AgriMarketing: Funding to help eligible Canadian agriculture, agri-food, fish and seafood businesses promote their products and develop new markets.
Advance Payments Program: Cash advances to help eligible agricultural producers manage cash flow throughout the production cycle.
5. Indigenous communities and economic development
Investments to support housing, infrastructure and economic development in Indigenous communities, including potential opportunities for Indigenous-owned businesses and companies working in partnership with First Nations.
First Nations Infrastructure: $32 billion over 10 years, including $12.7 billion for housing and infrastructure, to support development in First Nations communities.
First Nations On-Reserve Infrastructure: $18.5 billion over 10 years for infrastructure investments, including $675 million for initiatives to improve the delivery and management of infrastructure projects.
Emergency Management Assistance Program: $865.8 million over 10 years to support emergency preparedness and response on reserves, alongside $446.2 million for future emergency response and recovery efforts.
These investments may create opportunities for Indigenous-owned businesses and other companies working in partnership with First Nations communities on housing, construction, transportation and related projects.
6. Arts, culture and creative industries
Funding and incentives to support Canada’s creative economy, including artists, publishers, festivals and cultural organizations.
Canada Creative Credit: A proposed new personal income tax credit on up to $45,000 of annual qualifying net business income to support Canadian creators, artistic production and cultural entrepreneurship.
Canada’s 160th Anniversary: $300 million in funding for programs and initiatives celebrating the anniversary, including support for community spaces and cultural activities, under the new Canada 160 Fund and the Building Communities Strong Fund.
Communities Through Arts and Heritage Program: $10 million in 2027-28 to support community arts, cultural events and heritage initiatives.
Canada Arts Presentation Fund: $15 million in 2027-28 to support local festivals, performing arts organizations and cultural programming.
Canada Book Fund: $20 million over four years to renew funding for Canadian publishers and support the development and promotion of Canadian books.
For a deeper dive into active programs, tips for navigating the application process and expert analysis of how government priorities are shaping the business landscape, explore our grants and incentives content.
5 Steps to Help Win Business Grants and Government Funding in 2026
How to Access Large-Scale Government Grants: 3 Strategies for Commercial Businesses
How Canadian Businesses Can Navigate the New Tariff Response Funding
Looking at Government Grants for Your Business? Read These Tips Before You Apply
How GrantMatch can help
To get started with GrantMatch, RBC business clients can visit the Beyond Banking website for complimentary and exclusive access to the GrantMatch Funding Assessment & Strategy Tool [F.A.S.T], a short questionnaire that, once submitted, instantly generates a curated list of relevant, available grant and incentive opportunities.
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