Carney Government Tables 2026 Budget
Bogus Masters of Our Destiny Distractions to
Hide Who the Economy Serves
Rally of Brampton postal workers in defence of their rights and against the destruction of the public post office, May 31, 2025
The federal budget presented to Canada's parliament on November 5 by the financial oligarchy in control of Canada's political and economic affairs is named the Masters of Our Destiny Budget 2026. The promo claims that Budget 2026 "builds a sovereign, more affordable Canada." This is the kind of silly-speak we have come to expect from those who parade as ministers whose real role is that of distraction burglars. Their aim is to cover up what the financial oligarchs who have seized control of the state are up to. The oligopolies fighting to control the productive forces and the wealth they produce could not be happier.
Whose "destiny" is the excited Minister of Finance and Minister of National Revenue François-Philippe Champagne talking about? It is not the destiny of the working people who produce the social wealth that the budget uses for expenditures and who rely on the revenue for much of their well-being. They have no say over how the money is expropriated from the economy or where it is spent. The budget exists within the confines of the executive prerogative of the global financial oligarchy in control, not the working class and peoples. Prime Minister Carney and his closest Cabinet members dictate the terms of the budget in accordance with the demands of the global oligarchy. Even Parliament is marginalized with its role reduced to rubber-stamping the budget presented to them and joining the chorus of distraction burglar tweeters.
The release of the budget is mostly banal theatre as the government attempts to present itself as doing something to solve the country's problems. The budget goes on and on with project after project, reducing the serious problems Canadians and the economy face. This includes falling wages, the affordability crisis, unemployment, increasing impoverishment and crises of all kinds as the price to be paid to make the oligarchs richer.
This year the Carney government has lifted the title for the budget, Masters of Our Destiny, from the Quebec slogan for independence "Maîtres chez nous," first raised by Quebec Liberal Prime Minister Jean Lesage during the 1962 provincial election. It was used as a rallying cry for the Quiet Revolution, most notably to champion the nationalization of the province's private hydroelectric companies under Hydro-Québec. It is used by the Carney government to completely obfuscate that it is not the people in control of their destiny but supranational oligopolies.
The peoples across the country are well aware that all major decisions in Canada derive from the considerations of the global financial oligarchy and their lust for maximum private profit and greater control. Carney's "Masters" are oligopolies which operate as cartels which both contend and compete with one another in a manner that treats the economy as a casino. Through insider trading and control of executive powers, they make windfall profits as if money grows on trees, in a manner that is in no way linked to the productive powers of the working class and people. Carney is going all out to organize "middle powers" to form a presumably rising hegemon against the presumably declining hegemon represented by the U.S. It is not a geographical equation -- Europe versus the United States -- since the oligopolies are supranational and make whatever play serves their immediate interest and, most of the time, they play all sides at once. They are all rabidly anti-working class as evidenced with Carney's Bill C-39 introduced on September 21 which has now completed witness testimonies and is headed for adoption in the House of Commons. This bill is crucial to the government's budget as it seeks to change Section 107 of the Canada Labour Code to increase restrictions on the right of workers to defend themselves through strikes and other actions they deem necessary. This fully exposes how positions of privilege and power are used to control "our destiny."
Carney's posturing as "Masters" in opposition to the crude manoeuvres of Trump and his ilk have little to do with any changes or proposals in the budget. In fact, the main parameters of the budget remain much the same. Most major expenditures are locked into amounts that change little from year to year while revenue remains much the same especially as overall economic growth or GDP has mostly stalled. Any increase in one expenditure, such as in the military this year, means other expenditures receive less or deficits rise. The continuing deficits mean debt interest charges also grow.
Unless revenue is increased, any upward changes in expenditures rely on taking money from one department and giving it to another or increasing the debt by playing on the money markets. This appears to be the case with this budget as the economy is stagnant with revenue projected to rise only because of price inflation while higher oil and gas prices have boosted fuel taxes.
The two major expenditures soaking up revenue are the military and debt interest charges which puts huge pressure on social programs. As a long-time servant of the financial oligarchy, Mark Carney and his government ministers are never more pleased with themselves than when they come up with programs which claim to vindicate paying interest to private moneylenders. So too when it comes to spending on war preparations which are promoted as necessary to protect Canadians from looming threats to their sovereignty.
Any government worth its salt and proclaiming to be "masters of our destiny" would put spending on social programs in first place, direct revenue to meeting the claims of the peoples on the society they depend on for their living and launch a moratorium on servicing the outstanding debt and an investigation into its legitimacy. In aggregate, the federal, Quebec and provincial governments doled out $94.4 billion in interest payments to private owners of government debt in the 2025-26 fiscal year. Almost half of that scandalous amount is sent outside the country, mostly to U.S. oligarchs.
The federal government alone spent a projected $54.0 billion on debt servicing charges in 2025/26, which is roughly equivalent to what the government spent on the Canada Health Transfer ($54.7 billion), and significantly more than the expected amount for childcare benefits, $38.1 billion. The new budget projects federal interest payments will rise to $60.2 billion in 2026-27 and to $85.5 billion in 2030-31. The increase puts payments to private creditors much higher than money invested yearly in the Canada Health Transfer and other social programs.
Governments should cancel all new borrowing from private sources and borrow only from the government's and the economy's own resources backed by future new value the working class produces. This would also be accompanied with changes to how payment for material and human infrastructure would be made to reflect actual prices of production to be paid by the corporate interests that consume the material and human use-value. The watchword for infrastructure should be: Stop the big corporations from stealing the use-value of the people's material and human infrastructure!
Revenue and Expenditures
Demonstration in Vallefield Quebec against expansion of military production at General Dynamice plant, May 50, 2026
The budget consists of two main categories: revenue and expenditures. Revenue represents the social wealth expropriated from the value working people produce while expenditures are how the expropriated social wealth is distributed. Expenditures can grow only if revenue or deficits expand or certain expenditures are reduced. Increasing expenditures for the military, which Carney has pledged to do according to the demands of the war producers and the aggressive U.S./NATO military alliance, requires reducing expenditures on other items, directly affecting the people or greatly expanding the deficit. War funding and debt payments both harm the economy, draining money out of it rather than putting funds into it.
Government Revenue
Almost all the revenue the government expropriates from the economy arises from the work of Canadians and Quebeckers producing social value. The federal government through its administrative arm the Canada Revenue Agency (CRA) expropriates in various ways the social wealth working people produce. Revenu Québec fulfills much of this role in Quebec. The state claims value directly from new value workers produce through income and payroll taxes, and indirectly from already produced old value through consumer and property taxes.
Federal taxation expropriates social wealth from various sources of which income tax on the wages of the working class is by far the greatest amount. Other sources include corporate income taxes, payroll taxes, property taxes, taxes on personal investments and savings, sales taxes, import taxes such as tariffs, excise taxes on specific items and fees for government services and rights.
As of 2024, the federal, Quebec, provincial, territorial and local levels of government expropriated 34.9 per cent of the social wealth Canadians and Quebeckers produced. The per cent expropriated was calculated on the country's total Gross Domestic Product (GDP) and is a percentage similar to that of all the industrialized imperialist countries dominated by the global financial oligarchy. GDP is an imperialist measurement of the market value of goods that are exchanged within the country and does not measure the actual price of production of the use-value working people produce in the socialized economy or the full amount of social wealth produced.
Government revenue for the 2025-26 budget was projected at $507.5 billion with expenditures of $585.9 billion. Carney's new budget presented November 5 continues the 2025-26 budget projections into the 2026-27 budget year. It projects revenue of $540.3 billion with expenditures of $602.6 billion making a deficit of $62.3 billion.
Revenue is growing somewhat not because of economic growth but mainly from a rise in oil and gas prices and government revenue derived from fuel taxes. This is offset by the plan to make the corporate productivity mega deduction permanent. This allows companies to write off investments in a tax-advantaged way. Employing dozens and often hundreds of tax experts, big corporations can find ways to reduce corporate tax payment to zero. The result is a continuation of large yearly deficits, greater debt to moneylenders and interest payments soaring to $85.5 billion by 2030, reaching 12.9 per cent of federal expenditures.
The following chart shows the effective income tax rate for companies following the 2026 budget and the mega deduction. The government says the mega deduction alone will cause federal revenue to fall $36 billion over five years making the Canadian business tax regime the lowest in the imperialist world.
Government Expenditures
Government expenditures consist of several broad categories: productive expenditures, unproductive expenditures, and those areas that can be considered pro-social spending and others that directly pay the rich such as the recent government announcement to make a $1.6 billion equity investment in Cohere Inc. This is an artificial intelligence (AI) company said to be Canadian that builds enterprise-grade large language models (LLMs) and security-first AI tools for businesses and governments. Following the announcement, Cohere's valuation rose to approximately $35.7 to $36 billion, up from the previous $7 billion. Public-private partnerships (P3s) are another means for the oligopolies to gain control and secure funding, while the working class and peoples lose. The Cohere investment includes the global oligarchs of NVIDIA, Bell and Schwarz Group.
Despite government silly-speak that the investment represents an equity stake in the company by the people of Canada, a Globe & Mail report indicates that the higher valuation has "significantly increased the on-paper wealth of Cohere's founders, early venture capital backers, and pension funds." Besides the fact that what makes a company "Canadian" besides its legal incorporation, is left out, another report points out: "Controversy has also surfaced regarding prominent Canadian tech figures with dual ties to the federal government and early-stage Cohere investment funds who stand to benefit from the enhanced valuation."
This is another example of unproductive expenditures which finance the institutions the state needs to protect itself and the rule of the global financial oligarchy and its private wealth, power and privilege. The major unproductive expenditures are for the military and war production, police, prisons, judiciary, government bureaucracy, servicing the state debt and now also AI.
A large portion of the handouts to big companies is through material infrastructure and the supply of healthy and educated human use-value for which companies do not pay.
The government budget fleshed out its widely opposed plan to privatize Canada's four largest airports through long-term operating concessions. The budget put aside $38 million over three years to develop the framework to allow the private takeover by 2029.
On the issue of providing infrastructure to enterprises, the budget announced several "nation-building" projects including $50 billion for the public electricity grid. Providing electricity to businesses below the price of production has long been a pay-the-rich scheme in Canada.
The budget funds its Canada Strong Fund as a Crown-controlled P3. The government is deploying an initial $25 billion to take P3 ownership in major private projects and businesses similar to the Cohere Inc. P3.
The budget announced a "Canada growth incentive" to allow investors to avoid taxes on up to $15 million in capital gains if the funds are reinvested in Canada.
AI for All is a $2.7 billion P3 that has already begun. The government will give businesses money to adopt AI by 2034. Also already in operation is the P3 National Food Security Strategy to hand out $3 billion to the monopolies and oligopolies in the food sector.
Military expenditures are a major part of the budget. These include new investments in U.S./NATO attempts to isolate Russia in eastern Europe, in particular in Latvia. The military expenses also include more cash to procure military drones for Ukraine and others.
The legacy media describe the defence budget as "exponentially larger than in the recent past and moving higher still." It projects direct annual military spending to reach $157 billion by the end of the decade. This will dwarf all other spending as Carney hurtles down his warmongering path.
Much of the military spending is within the Defence Industrial Strategy Strategic Partnership Framework. One aspect of this is spending for the Canadian Patrol Submarine Project with Germany, which is said to be the largest military procurement in Canadian history.
Social spending in the budget reflects a small percentage of the total expenditures such as the top-up to the GST, the Workers Benefit for low wage earners and Nutrition North. These are measures that can be properly seen as a boon to the retail industry, in particular the big grocery chains. Workers' wages continue to fall in comparison with price inflation with many unable to afford even the basics. The government programs hand out money to low wage workers who immediately spend it on essentials. Indication of how low wages have dropped is revealed in the estimate of 12 million Canadians who have such low incomes they qualify for the GST rebate. The unemployment rate has been at 6.5 per cent or higher for years.
Homelessness has become a national shame as estimates now say over 65,000 Canadians live without permanent shelter. The Carney budget announced $11.2 billion to build shelters for those without homes but the bulk of the money is going to profit-making construction companies with no public construction and maintenance enterprises considered.
Details of spending are scarce in the budget as these appear much later in the year in the financial accounts. The following breakdown of expenditures from 2024 gives an indication of where government money is spent. It is prudent to keep in mind that the actual amounts vary somewhat from year to year: Consolidated per capita spending by selected Canadian Classification of Functions of Government, 2024.
![[Tyee]](https://thetyee.ca/design-article.thetyee.ca/ui/img/yellowblob.png){kind=small}