OTTAWA
Finance Minister François-Philippe Champagne tabled a federal budget Thursday that proposes tax incentives for major power lines, a one-time grocery benefit top-up and projects a $62.3-billion deficit for 2026-27.
The budget proposes making high-voltage provincial transmission lines eligible for the Clean Electricity investment tax credit, which refunds up to 15 per cent of some capital costs.
Only the lines with the highest voltage in each province will qualify, targeting powerful lines that cover long distances to service large-scale generation, nuclear and mining projects.
In Quebec and Newfoundland, the threshold will be lines built to operate at a minimum of 735 kilovolts, while in Alberta, Ontario, Manitoba and British Columbia, it will be 500 kilovolts.
The proposed North Coast Transmission Line in B.C., for example, would be a 500-kilovolt line built to power energy projects such as Ksi Lisims LNG and the Golden Triangle mining area.
The budget also proposes $37 million to advance cost-benefit studies and cost-sharing discussions for interprovincial transmission projects.
It extends the Clean Technology and Clean Electricity investment tax credits beyond the initial 2035 date, targeting projects that will come online before 2041.
The Clean Technology tax credit, which refunds up to 30 per cent of capital costs, would be reduced to 15 per cent in 2040.
Ottawa is also exploring a domestic content bonus, ranging from five to 10 percentage points depending on the tax credit, to be consulted on over the next 60 days.
The federal government estimates these changes will cost $38.5 billion.
It also proposes a five-year extension of mining tax credits that were set to expire in 2027, including the Critical Mineral Exploration Tax Credit, and adds antimony to the list of eligible minerals.
The budget proposes a one-time 50 per cent increase in the Canada Groceries and Essentials Benefit for the 2026-27 benefit year, with payments expected in early 2027.
The supplement would provide an estimated $4.1 billion in additional support to more than 12 million Canadians with low and modest incomes.
It would provide up to $339 for eligible single people without children and up to $679 for couples with two children.
Combined with earlier measures, the proposed 2027 payment would bring total support for the 2026-27 benefit year to approximately $1,290 for an eligible single person without children and $2,570 for a couple with two children.
The budget also incorporates previously announced affordability measures, including more than $2 billion over eight years for the National Heat Pump Rebate Program.
The federal government forecasts a deficit of $62.3 billion in 2026-27, about $3 billion lower than forecast in its spring economic update.
The deficit is projected to decline to $52.9 billion by 2030-31.
The government projects that its day-to-day operating spending will be balanced by revenues beginning in 2027-28, one year earlier than previously forecast.
The budget identifies U.S. trade restrictions, global supply disruptions and geopolitical uncertainty as risks to Canada’s economic outlook.
It proposes billions in housing investments, including an additional $13 billion over 10 years to expand Build Canada Homes and a goal of ending homelessness within 10 years.
The budget also provides more details about the $25-billion Canada Strong Fund, which would invest alongside private investors in Canadian companies and major projects.
It proposes $6.5 billion in spending and financing over six years to support Canada’s forestry industry and more than $32 billion over 10 years for First Nations housing and infrastructure.
The budget sets immigration targets of 380,000 permanent resident admissions annually from 2027 through 2029.
The budget suggested some of the fiscal costs for tax credits are partly offset by a lower-than-anticipated use of the clean economy investment tax credits and battery manufacturing supports.
A government official, speaking on background, said this amounts to a couple billion dollars in savings over the next few years, but that the uptake of the program fluctuates depending on multiple factors, including U.S. policy on clean technologies.
This story was written by the e2gold.ca newsroom from reporting by The Globe and Mail and My Lakeland Now. Quotes are checked word for word against that reporting.