Champagne Anchors Next Budget On Affordability and Cultural Sovereignty
Thursday’s federal budget will focus on affordability and Canadian sovereignty, and advocates are hopeful it will include an expanded cost-of-living support through the Canada Groceries and Essentials Benefit.
The budget will also stretch beyond purely fiscal measures, with a focus on strategic independence in a volatile world, according to three sources with knowledge of the government’s thinking and preparations on the budget.
Two of the sources expected to see space policy addressed in the budget, noting the government’s concern about reliance on other countries.
The Globe is not identifying the sources because they were not authorized to comment on the budget before its release.
Speaking on the eve of tabling his second budget as Finance Minister, François-Philippe Champagne said sovereignty – including cultural sovereignty – will be a key theme.
Mr. Champagne took part in the tradition of buying a new pair of shoes before the budget. At the factory of Montreal shoemaker Pajar, he was asked what Canadians can expect.
“Affordability is top of mind,” he said. “If we go in the streets, it’s the price of rent, the price of foods, the price of gas. That’s a reality for Canadians.”
Mr. Champagne said the government has already taken a number of steps “to support Canadians with affordability.” He did not say whether the budget would include additional measures.
Anti-poverty advocate Alexi White, policy director with the Toronto-based human rights group Maytree, said his organization is optimistic the budget will increase the Canada Groceries and Essentials Benefit.
The tax-free quarterly payment is aimed at low-and-modest income Canadians and was previously called the GST/HST credit.
“We are hopeful that there will be further investments in refundable tax credits that would immediately help families,” he said in an interview.
The government announced in January that it was increasing the benefit by 25 per cent for five years. It also approved a one-time payment equal to a 50 per cent increase, which was issued in June.
Maytree, as well as the Canadian Construction Association, which represents contractors and manufacturers, also said the budget’s affordability focus could include new support for low-income housing.
“We are expecting some news on that,” said CCA president Rod Gilbert in an interview. “I think we need more housing altogether.”
Many of the budget’s big-ticket items have already been announced in recent weeks, including a Productivity Mega Deduction, worth $36-billion over five years, which expands the ability of businesses to immediately write-off investments in eligible capital assets.
Mr. Champagne also recently announced an extension of the federal gas tax cut until the end of March, at a fiscal cost of about $2.9-billion. Further, the government announced a $2-billion program last month to provide rebates for homeowners who install electric heat pumps.
Canadian consumers are facing a combination of rising inflation, driven in part by higher oil prices, and increased borrowing costs after the Bank of Canada raised its benchmark interest rate last week for the first time in three years.
Since becoming Prime Minister early last year, Mark Carney has framed his economic agenda as an effort to boost growth through domestic and international policies so that Canada is less dependent on U.S. trade in light of President Donald Trump’s tariffs.
While Mr. Trump’s Republican Party lost control of both the House of Representatives and the Senate in Tuesday’s midterm elections, Mr. Champagne and other ministers were reluctant to comment directly on the vote’s potential impact on Canada.
Mr. Champagne pointed out that the budget’s title is Masters of Our Destiny.
“Whatever happens south or somewhere else in the world, we need to be more resilient. We need to be more independent. We need to open up new markets. We need to build one Canadian economy. We need to buy Canadian,” he said.
An industry source expects the budget will include changes to the Canadian Exploration Expense, a tax deduction for junior mining companies that currently covers costs incurred while determining the existence, location and quality of a mineral or natural gas resource.
The Globe is not identifying the industry source because they were not authorized to comment publicly on the matter.
In their 2025 campaign, the Carney Liberals pledged to expand the list of eligible expenses to cover engineering and feasibility studies used to assess if a project is worth building.
The commitment followed a B.C. Supreme Court ruling in favour of Seabridge Gold, which successfully challenged a Canada Revenue Agency decision denying exploration tax credits. However, the federal government reversed course in its 2025 budget, explicitly stating that such studies do not qualify under the incentive.
The Association for Mineral Exploration has spent months lobbying for the change, securing letters of support from seven provincial and territorial governments. An EY report commissioned by the association estimated the measure would reduce federal tax revenues by roughly $6.6-billion over 10 years. Finance Canada officials have told industry representatives their own estimate is closer to $10-billion.
The budget’s cover page, released last week, features hydroelectric transmission lines. The government has promised major new spending as part of a National Electricity Strategy to double Canada’s grid capacity by 2050.
Cultural groups are looking to the budget for new details on previously announced funding.
Marc Miller, Minister of Canadian Identity and Culture and the Minister responsible for Official Languages, announced $600-million a year in new funding for Canada’s audio and audiovisual sectors in June. However, no further details have been released.
The policy was touted as an alternative to an earlier plan to force large online streamers such as Netflix and Amazon to increase their contributions to Canadian culture through Bill C-11, the Online Streaming Act.
Washington has expressed strong opposition to Bill C-11, which it views as unfairly targeting American tech companies.
Mr. Miller told reporters Wednesday on his way into caucus that for culture groups, the budget will be “very positive.”
Conservative Leader Pierre Poilievre said affordability and cost-of-living issues should be a budget priority.
“Job one for the budget is to save you money,” he said. “That’s our mission as Conservatives, and it’s our demand for the budget.”
The fiscal plan is expected to provide new details related to some major announcements the government has made in recent months.
For instance, in April, the Prime Minister announced the Canada Strong Fund, which would be the country’s first national sovereign wealth fund, worth $25-billion. It would make investments alongside the private sector in areas such as clean and conventional energy, critical minerals, agriculture and infrastructure.
At a prebudget event in Toronto Monday, Mr. Champagne suggested the budget would provide more details on the fund, which has yet to launch. He also promised more information related to opening public assets, including airports, to more private investment.
He said the budget will include new measures to support small- and medium-sized businesses and suggested it could involve efforts to simplify some tax matters.
Mr. Carney recently said the government plans to release a technical paper related to the sovereign wealth fund “in the not-too-distant future.”
Last year’s budget, which was also released in the first week of November, unveiled the government’s annual update to its immigration levels plan. A similar update is expected Thursday.
Budget watchers will also be looking closely for any word on federal defence spending.
A recent report by the Parliamentary Budget Officer said Ottawa has not been clear about the year-by-year timing of how it will meet its NATO commitments to significantly increase defence spending.
As for Ottawa’s overall bottom line, economists expect the budget will show a short-term boost in revenues largely because of higher energy prices. But they do not expect much improvement for federal deficit projections over the next few years.
The budget officer projected the federal deficit, before any new budget measures, will be $63.3-billion in the current fiscal year and $70.2-billion next year. Those projections are slightly higher than what Mr. Champagne estimated in his spring economic update, which projected deficits of $65.3-billion this year and $63.1-billion next year.
With a report from Aya Dufour
This article was first reported by The Globe and Mail
