Budget 2026 plans about $404 billion of federal capital investment over six years, and the annual figure more than doubles, from $37.4 billion in 2025–26 to $78.2 billion in 2030–31. For owners, the risk is not the money itself. It is competing with it for contractors, trades and long-lead equipment.
What happened
Finance Minister François-Philippe Champagne tabled Budget 2026 on November 5. Under the capital budgeting framework Ottawa introduced last year, spending is sorted into capital investment and day-to-day operations, and the capital side is where the growth is. On an accrual basis, federal capital investment rises from $37.4 billion this past fiscal year to $78.2 billion by 2030–31. On a cash basis, which tracks money actually going out the door, it climbs from $60.2 billion to a peak of $131.4 billion in 2028–29.
View the data
| Fiscal year | Accrual basis | Cash basis |
|---|---|---|
| 2025–26 | $37.4B | $60.2B |
| 2026–27 | $58.8B | $103.3B |
| 2027–28 | $73.7B | $126.0B |
| 2028–29 | $77.9B | $131.4B |
| 2029–30 | $78.0B | $130.9B |
| 2030–31 | $78.2B | $124.7B |
Not all of it is concrete and steel. The framework counts tax expenditures as capital, and the budget says the Productivity Mega Deduction accounts for a significant share of the increase. Of the 2030–31 total, about $64.0 billion is direct spending and $14.2 billion is estimated forgone tax revenue. Even so, direct spending alone roughly doubles from $31.1 billion.
View the data
| Fiscal year | Direct spending | Forgone tax revenue | Total |
|---|---|---|---|
| 2025–26 | $31.1B | $6.3B | $37.4B |
| 2030–31 | $64.0B | $14.2B | $78.2B |
The measures behind it are construction-heavy: $44.7 billion over 11 years for housing and homelessness; $32 billion over 10 years for First Nations housing and infrastructure; more than $50 billion towards doubling grid capacity by 2050; $1.5 billion over nine years for rinks and recreation facilities; $3.6 billion for national parks and historic sites; and full funding for the 800 km Mackenzie Valley Highway. Scotiabank’s analysis also counts a $13 billion, 10-year top-up for Build Canada Homes. Core defence spending rises from $75.1 billion in 2026–27 to $99.2 billion in 2030–31, on a path to 5% of GDP by 2035.
What it means for owners
You are now bidding against Ottawa for the same trades. When public programs ramp up, contractors with bonding capacity, and the electricians and mechanical trades behind them, follow the largest and steadiest work. Federal cash outlays peak in 2028–29, so projects tendering between 2027 and 2029 will feel it most. Scotiabank’s read is that capacity constraints make disciplined delivery critical, and that the budget did little about skilled labour shortages.
Escalation and financing pressure will not fade quickly. Scotiabank warns the investment build-out could add near-term inflation pressure. After the Bank of Canada’s 25-basis-point hike on October 28, it expects another 75 basis points over the next few quarters, with the 10-year Government of Canada yield running about 20 basis points above its April baseline. That raises carrying costs on any project financed through construction.
Electrical equipment is the pinch point. Grid expansion, EV chargers and heat pump retrofits all draw on the same transformers, switchgear and electrical contractors that a commercial fit-out or a new building needs.
Announced is not delivered. Budget dollars usually go out more slowly than planned. Desjardins’ Jimmy Jean called the budget “very ambitious” and warned that debt metrics suffer if execution falters. Owners should not assume the public wave arrives on schedule, or that it passes on schedule either. Plan with ranges, not a single date.
What to do now
- Pull procurement forward on 2027–2029 projects. Use early contractor involvement to secure a builder and key trades before public tenders crowd the market.
- Re-run your escalation allowance. Widen the range for projects with midpoints in 2027–2029, and show the board the high case. Our escalation allowance guide has a worked example.
- Order long-lead electrical gear now. Confirm current lead times for transformers and switchgear, and consider pre-purchasing them. See long-lead equipment procurement.
- Add a market-capacity test to your stage gates. Before approving a tender, check the expected number of bidders, their bonding headroom and their current public workload.
- Share index risk instead of paying for it twice. A clear escalation clause on steel and electrical packages usually costs less than the contingency a bidder prices in without one.
The bottom line
Budget 2026 is a bet that public investment will pull private investment along with it. For owners, the practical question is simpler: who builds your project when everyone is building? If you want to pressure-test your 2027–2029 pipeline, book a 30-minute call.
Sources: Budget 2026, Annex 1: Details of economic and fiscal projections, Tables A1.5 and A1.6 (November 5, 2026); Department of Finance Canada, Budget 2026: Key Measures (November 5, 2026); Department of Finance Canada, Government of Canada releases Budget 2026 (November 5, 2026); Scotiabank Economics, Canada’s 2026 Federal Budget: A Big Savings, Big Spend Budget (November 2026); Global News, Carney’s ‘ambitious’ but ‘risky’ budget (November 2026). Cover graphic: Benjamin R. Consulting, using Budget 2026 data.