Toronto Region Board of Trade responds to Federal Budget 2026

Federal Budget 2026 arrives at a defining moment for Ontario, which accounts for 40 per cent of the national economy and for the past two years has been in the crosshairs of the trade and tariff war with the United States. Against a backdrop of global turmoil, shifting supply chain relationships and an increasingly competitive race for investment, the Carney government is continuing its drive to create a more resilient, self-reliant national economy.

“Whatever happens beyond our borders, this budget is rightly about building up our economy at home,” said Giles Gherson, President & CEO, Toronto Region Board of Trade. “Canada has had an underperforming economy for more than a decade. This is a government that understands the critical importance of making long-term bets that will deliver prosperity for the next generation. Having said that, an important test of this budget will be how quickly it can galvanize significant new business investment generating improved productivity.” 

The Board welcomes the budget’s inclusion of the Canada Growth Incentive, including a new exemption on up to $15 million in eligible capital gains and enhanced rollover provisions to encourage reinvestment in Canadian businesses. Long-overdue expanded SR&ED support of $930 million for commercialization can help turn Canadian innovation into market-ready products while an enlarged mandate for the Invest in Canada agency can help attract much needed global capital. As part of its levels plan, the government has also signalled it will prioritise economic immigration and plans to better align the Temporary Foreign Worker Program with labour market needs.

Building on the game changing Productivity Mega Deduction—announced at September’s investment summit in Toronto, investments in a national electricity strategy, critical minerals and defence will also support growing the productive capacity Ontario needs to compete. Still to be answered is the degree to which the government’s new $50 billion national energy strategy will be available to support Ontario’s ambitious, but necessary large-scale nuclear reactor build out.

Ahead of the budget, the Board called for a comprehensive review of Canada's tax competitiveness and a Regulatory Modernization Commissioner with real authority at the centre of government to drive a "regulate for growth" agenda. The budget makes positive steps, but the promise of tax simplification must be accompanied by comprehensive tax reform to achieve the government’s growth ambitions. Moreover, government should move quickly to explain how businesses can claim supports and use the Canada Growth Incentive’s exemption and rollover provisions. 

"Building a more economically resilient Canada shouldn’t simply be a response to today's geopolitical disorder," Gherson added. "Canada's productivity challenge has been years in the making. Regardless of who occupies the White House or where the next global disruption stems from, with some urgency we need to create the conditions to build, invest, innovate and grow here at home."