Champagne previews Thursday's budget: small-business tax relief in focus as Ottawa pitches a plan "about Canada, not Trump"

Thursday's federal budget will look to make life easier for Canada's small- and medium-sized businesses, Finance Minister François-Philippe Champagne said Monday, offering business leaders a preview of the government's fiscal plan at a Canadian Club Toronto breakfast.

The budget — the second to be delivered under Prime Minister Mark Carney — is expected to support the Liberal government's push to reduce Canada's reliance on the United States by building up the domestic economy, the Canadian Press reported.

What Champagne promised

Champagne acknowledged that one of the barriers to investment, particularly among Canada's small businesses, is the complexity of the tax code. He would not offer specific examples of what the government is proposing in Thursday's budget, but said the plan will prioritize domestic investment, economic independence and affordability.

One of the big-ticket measures already accounted for in the budget is the productivity mega-deduction, which the government announced in September and has continued to highlight as a cornerstone of its investment policy. It is estimated to cost $36 billion over five years.

What business is asking for

The Canadian Federation of Independent Business has called on Ottawa to use the Nov. 5 budget to lower the small business tax rate and fix gaps in the federal tariff relief regime that box out smaller firms, according to the Canadian Press report.

Champagne framed the budget as the next step in the government's plan rather than a reaction to Washington. A senior government source told CBC the document will include new affordability measures, business tax incentives, and investments in infrastructure, defence and culture, and that the government expects to frame it as ambitious but fiscally sound.

The economic backdrop

The budget lands against a weakening picture. The Parliamentary Budget Office's Oct. 20 outlook projected Canadian real GDP growth of just 0.9 per cent in 2026 and 1.5 per cent in 2027, both lower than its June forecasts, and estimated that trade measures introduced since early 2025 could leave Canada's economy about 1.4 per cent smaller over the medium term than it would otherwise have been, assuming they remain permanent.

The Parliamentary Budget Officer has also projected higher deficits than previously forecast and raised questions about the timeline for meeting certain fiscal anchors. The government has said the budget is not a reaction to the U.S. midterms.

What happens next

Champagne tables Budget 2026 on Thursday, Nov. 5. Canadians will then be able to compare the government's economic ambitions with its updated spending plans, revenue forecasts and borrowing requirements — and small businesses will learn whether the promised tax relief is real or rhetorical.