Chapter 2: 
A more competitive and connected Canada

Focusing on what we can control

The world is in an era of great power rivalry, and the global economy is changing rapidly. Deep integration with the great powers was once a source of strength for middle powers like Canada. More recently, it has become a threat to our sovereignty.

Over the past two decades, a series of crises in finance, health, energy, and geopolitics has demonstrated the risks of increased global integration. Over the last few years, conflicts in Europe and the Middle East have underscored that vulnerability.

Canada cannot control global uncertainty. But Canada's new government is focused on what we can control: our response.

A world that is changing rapidly is an opportunity if you have the right plan. Canada's plan is simple. We are building our strength at home and diversifying our partnerships abroad to increase prosperity for all Canadians.

We are building a stronger, more connected, more competitive Canadian economy. One that is less reliant on a single trading partner and more resilient to global shocks. We are building at the speed and scale that this moment requires to ensure Canadians capitalise on this opportunity. As we do so, we are providing a boost to the Canadians who need one.

We are helping workers, businesses, and industries respond to the challenges created by trade disruptions. Budget 2026 moves major projects forward, strengthens supply chains, and supports businesses and workers affected by unjustified U.S. tariffs.

Canada's new government is building a strong and confident Canada. One where Canadians chart their own course in a changing world.

Taking action in Budget 2026

Budget 2026 advances our government's plan to build the trade corridors, infrastructure, and market access to power Canada's new era of economic growth. These measures include:

• Getting more major projects built faster and unlocking new investment across Canada.
• Giving Canadians more ways to invest in and benefit from the projects and companies shaping Canada's future.
• Providing new opportunities for Canadian businesses to compete in fast-growing markets around the world.
• Offering stronger protection against unfair trade and better financing tools to help Canadian exporters compete abroad.
• Delivering more support for workers and businesses affected by tariffs, so they can adapt, invest, and grow.
• Removing internal trade barriers so Canadian workers and businesses can take full advantage of our national market.

• These measures build on work already underway to create a more competitive and connected Canadian economy: The Major Projects Office is advancing 28 nation-building initiatives across the country, including 18 projects representing more than $194 billion in new investment and supporting an estimated 200,000 jobs per year during construction, and 10 transformative strategies designed to unlock broader regional and sectoral opportunities.
• Major projects will move forward faster under Bill C-39, the Building Canada Strong Act, through a "one project, one decision, one year" approach to federal approvals.
• The Canada Strong Fund—Canada's first sovereign wealth fund—will give Canadians a direct stake in nation-building investments.
• Through 15 free trade agreements across 51 countries, Canadian businesses have preferential access to 1.5 billion consumers representing nearly two thirds of global gross domestic product (GDP), and we are on track to double that reach to more than 3 billion consumers worldwide, including with the Association of Southeast Asian Nations and India.
• Significant investments in trade infrastructure are reducing bottlenecks and helping Canadian goods reach new markets.
• The Productivity Mega Deduction is solidifying Canada's position as the most tax-competitive jurisdiction in the G7 for new business investment.

2.1 Building a stronger, more sovereign economy

Canada faces a pivotal moment, one that demands bold action. Our future will be shaped by the choices we make today—what we build, who owns it, and how Canadians benefit from it. Our waterways, critical minerals, vast energy reserves, and transportation corridors are a source of resilience. Canada's ambition is catching up with our potential. A confident Canada is ready to build.

By getting major projects built, giving Canadians a direct stake in their success, and expanding opportunities for Indigenous ownership, we are building a stronger, more strategically autonomous country for all Canadians.

Moving major projects forward faster

For too long, nation-building infrastructure in Canada was bogged down in red tape, leaving enormous investments on the table. The path to approval was confusing and overlapping, and the onus was on the proponent to navigate the system.

In August 2025, Canada's new government changed that by establishing the Major Projects Office to streamline and accelerate regulatory approval processes and help structure and coordinate project financing.

The Major Projects Office is working. Canada is working. Since September 2025, 28 nation-building initiatives have been referred to the Major Projects Office that position Canada for growth in broad sectors like electricity, nuclear energy, liquefied natural gas, critical minerals, and transportation infrastructure. The Office is doing this in full partnership with Indigenous Peoples, and while protecting the environment.

The 18 projects referred to the Major Projects Office have clear proponents and require federal coordination and support to succeed; collectively, these represent more than $194 billion in new investments, estimated to support 200,000 jobs per year during the construction phase. The 10 transformative strategies are early-stage initiatives that would strengthen Canada's economy.

To advance these efforts, we introduced Bill C-39, the Building Canada Strong Act, in September 2026. It establishes a "one project, one decision, one year" approach to federal approvals. Consultations will be coordinated through a single federal process, reducing duplication and consultation fatigue while supporting more meaningful, rights-based dialogue. That is how we get projects built faster and strengthen Canada's trade corridors and ports, supporting our workers in Canada's federally regulated sectors.

Our plan gives Canada one of the most streamlined and predictable major project approval processes among peer economies. It keeps us a country of high standards, one that is committed to consultation and upholding Indigenous rights. The new timelines do not change section 35 rights, the duty to consult, or treaty obligations. Faster decisions will come from better federal coordination and less duplication. Speed, certainty, and predictability are, themselves, competitive advantages. With these reforms, Canada can once again get big things built, for all Canadians.

The next steps in Budget 2026

Budget 2026 proposes to establish a major projects management entity to ensure approved projects can access the expertise and resources required to move quickly. This purpose-built organisation would have specialised technical and project development expertise to support certain projects, manage risks, and keep them on track.

• Budget 2026 proposes to provide $187.4 million over five years, beginning in 2026-27, and $24.2 million in future years to launch and operate a major projects management entity and begin support for the Mackenzie Valley Highway and the Taltson Hydro Expansion project.
• Our plan is working and delivering projects at generational speed. With the Major Projects Office and new measures in Budget 2026, we are creating a faster, more efficient, and more predictable system for building Canada Strong.

Figure 2.2 – Building Canada Strong Act (Bill C-39)

Supporting major projects across the country

As we continue to move major projects forward faster, we are supporting projects at different stages of development. Projects referred to the Major Projects Office benefit from dedicated federal coordination and support. Those later listed as projects of national interest benefit from a streamlined federal approval process offering greater certainty and advancing them even faster.

For example, in October 2026, the Pacific Link and Roberts Bank Terminal 2 were listed as projects of national interest under the Building Canada Act.

Pacific Link and the Pathways Project

The government is taking a balanced approach to growing Canada's energy sector while lowering its emissions. Pacific Link, a new pipeline to the West Coast, is now a project of national interest, while the Pathways Project would reduce emissions through large-scale carbon capture and storage infrastructure. Together, these projects would:

• Expand market access, with Pacific Link providing capacity to transport one million barrels per day to the West Coast and expanding access to international markets for Canadian energy products.
• Increase the value of Canada's resources by enabling greater access to premium prices in growing Asian markets and helping to reduce the price discount on Canadian oil relative to U.S. oil.
• Reduce emissions, with the Pathways Project and other emissions reduction commitments from the Oil Sands Alliance, achieving 16 million tonnes of emissions reductions per year.
• Support investment and long-term economic growth, creating high-paying new jobs while lowering the emissions intensity of Canadian oil production.

On August 17, 2026, the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor was referred to the Major Projects Office. This transformative strategy unlocks the Labrador Trough's full economic potential, harnessing the region's clean, hydroelectric power and high-purity iron ore while building the necessary transmission lines to realise the region's true economic potential. The Major Projects Office will coordinate and structure federal financing, accelerate permitting requirements, and work with Indigenous Peoples, including the Innu people, to forge meaningful partnerships.

Churchill Falls and the Labrador Trough Corridor

The Labrador Trough, stretching across Newfoundland and Labrador and Québec, is a world-class mining region with significant hydroelectric capability and high-purity iron ore. To harness this strategic asset and create high-paying careers for Canadian workers, the government announced the referral of the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor to the Major Projects Office. When complete, Labrador Trough will represent the largest clean investment in North American history. This development would:

• Expand clean electricity generation, through the expansion of Churchill Falls and development of Gull Island, creating 14,000 megawatts of clean, renewable power and nearly tripling Churchill Falls' current generating capacity;
• Increase transmission capacity, through new transmission infrastructure to deliver electricity to the Labrador Trough;
• Unlock mining and industrial development, by increasing clean power capacity in the region; and
• Support low-carbon growth, by helping Canada produce the electricity needed to double its capacity by 2050 and increasing the supply of high-purity iron ore for low-carbon steel supply chains.

With Canada positioned to become the leading supplier of clean and conventional energy, both to ourselves and to the world, projects like Pacific Link and strategies like the Labrador Trough Clean Power, Critical Minerals and Infrastructure Corridor prove the benefits of the national, collaborative approach laid out in the Building Canada Act.

Since July 2026, the Major Projects Office has been assessing three additional potential projects of national interest alongside consultations with Indigenous communities and provincial and territorial governments (see Figures 2.3 – 2.7).

Among those three projects is the Mackenzie Valley Highway, which will create a new all-season economic corridor in the Northwest Territories connecting Wrigley to Inuvik. The Highway will provide year-round connectivity to nearly 2,000 residents in the three currently isolated communities of Norman Wells, Tulita, and Fort Good Hope and give the nearly 6,000 residents of the Beaufort Delta a 1,200 km shorter route to Yellowknife. The communities of Colville Lake and Deline will also benefit from shorter winter road construction and more reliable travel windows.

To unlock this economic corridor:

• Budget 2026 proposes to fully fund the construction and certain maintenance costs of the Mackenzie Valley Highway.

Projects listed or considered for listing under the Building Canada Act

In addition to projects being considered for listing under the Building Canada Act, we are advancing a broader portfolio of nation-building projects through funding, coordination, and support from the Major Projects Office. A few of these projects are already well underway. These include:

• LNG Canada Phase 2, Kitimat, British Columbia: In September 2026, LNG Canada began construction on the Phase 2 expansion of its site in Kitimat, which will double its production capacity to a total of 28 million tonnes of LNG per year. This project will provide employment opportunities in local communities, including around 6,000 direct construction jobs, and up to 240 operations jobs across the LNG plant and the Coastal GasLink pipeline.
• Contrecoeur Terminal Container Project, Contrecoeur, Québec: In August 2026, the Montreal Port Authority announced the start of in-water construction work for the Contrecoeur Expansion Project, marking the beginning of a major new construction phase for the future container terminal. This will support up to 8,000 direct and indirect jobs during construction.
• Red Chris Mine extension, northwestern British Columbia: In July 2026, we announced a federal contribution of $500 million to support the Red Chris Mine extension, which will increase Canada's annual copper production by more than 15% while reducing greenhouse gas emissions by more than 70%. This project will employ roughly 1,500 workers during operation, with a peak of approximately 1,800 workers during construction.
• Nouveau Monde Graphite's Matawinie Mine: In May 2026, the Government of Canada and Nouveau Monde Graphite announced the start of construction on the Matawinie Mine in Saint-Michel-des-Saints, Québec, which will be the largest graphite mine in North America and in the G7. Together with the planned active anode material plant, this project will become a vital part of Canada's first integrated graphite operation and bolster the emerging battery hub in Bécancour, Québec, employing over 1,000 people during construction.

Supporting Indigenous ownership in Canada's major projects

Building Canada Strong means building so that everyone participates, growth is shared, and prosperity reaches every region, every community, and every family. Ensuring that Indigenous communities can fully participate in, and benefit from, the major projects shaping Canada's future is an important step toward economic reconciliation. Indigenous participation in major projects can create generational wealth and long-term prosperity, supporting stronger communities and a better quality of life for Indigenous Peoples.

The Darlington New Nuclear Project shows what this can look like in practice. Through a $715 million federal-provincial loan guarantee, seven Williams Treaties First Nations are investing in the project and will collectively acquire a significant minority interest in the project, giving them a direct stake in a world-leading Canadian nuclear technology project and the long-term economic opportunities it will create.

The Government of Canada has also begun discussions with eligible Indigenous groups in British Columbia and Alberta regarding the purchase of an ownership stake in the Trans Mountain Pipeline. The September 2026 offer to 128 Indigenous groups for a collective 15% ownership share in Trans Mountain Corporation marks an important milestone in fulfilling that commitment. The government also remains committed to pursuing a similar opportunity in relation to the Pacific Link project as it moves forward.

Through these initiatives, along with ongoing and expanded support under the Indigenous Loan Guarantee Program, we are working in partnership with Indigenous leadership to help address historical barriers that have limited access to economic opportunities for Indigenous Peoples.

Giving Canadians a stake in what we build

Through its plan to build Canada Strong, Canada's new government is prioritising nation-building projects that create jobs, attract investment, strengthen economic sovereignty, and position Canada for long-term growth.

Canadians deserve a stake in this ambitious agenda. In the 2026 Spring Economic Update, we announced the Canada Strong Fund, Canada's first national sovereign wealth fund. This Fund is a powerful new tool for supporting our economic sovereignty while building long-term national wealth for Canadians. Once running, the Canada Strong Fund will invest alongside private sector investors in strategic, nation-building Canadian companies and projects.

Canadians can also benefit directly from the Canada Strong Fund's investments through the issuance of Canada Strong Notes, an investment product tied to the Fund's performance. These notes will enable Canadians to share in the Fund's returns, giving them a direct stake in the nation-building projects and companies in which the Fund invests.

Where projects or companies have received federal support, the Canada Strong Fund will typically have co-investment opportunities on terms equivalent to those offered to private sector investors. The Fund will also have a mandate to selectively make strategic investments in high-potential projects and companies.

The government will provide an initial $25 billion over three years to seed the Fund, which will grow over time through reinvested returns and other assets that may be allocated to it. Operating at arm's length and guided by a mandate to generate commercial returns, the Fund will help build a lasting pool of national wealth that supports Canada's long-term prosperity.

• Budget 2026 announces the government's intention to bring forward legislation in the coming months to establish the Canada Strong Fund as an arm's-length and standalone Crown corporation. In the interim period, the Canada Strong Fund will be incorporated as a wholly-owned subsidiary of the Canada Development Investment Corporation, with its own dedicated Board of Directors and Chief Executive Officer.

Independence and professional management will ensure the Fund makes long-term, financially sound investment decisions in the best interests of Canadians. This governance structure strengthens transparency, credibility, and long-term performance.

Canada Strong Notes

In 2027, the government intends to launch Canada Strong Notes, a retail investment product linked to the Canada Strong Fund that will give Canadians the opportunity to invest alongside the Fund and share directly in its returns.

Designed to be broadly accessible, the Notes will be available to purchase through participating financial institutions. Canada Strong Notes will be easy to purchase, hold, and redeem. The Notes will provide principal protection, safeguarding Canadians' initial investment while allowing them to benefit from the Fund's performance.

To execute its mandate, the Fund will develop a pipeline of investible opportunities through two main streams:

• Under Stream 1: Co-investments, the Fund will work closely with federal entities providing support to projects or companies (e.g., a loan from the Canada Infrastructure Bank, a contribution agreement with the Strategic Response Fund). Though the pathways may look slightly different for each individual circumstance, the provision of federal support – through another federal financing vehicle or the Major Projects Office – would normally include an opportunity to make a minority co-investment on terms that mirror those of private sector participants.
• Under Stream 2: Strategic Investments, the Fund will make selective investments on a commercial basis in high-potential projects and companies offering attractive long-term returns and supporting Canada's economic strength and resilience.

2.2 Diversifying trade and deepening ties with reliable partners

In an increasingly complex world with shifting trade dynamics, Canada is well placed to succeed. Canada has established trade relationships around the world with preferential access to 1.5 billion consumers, and in the past year alone, we have signed more than 20 trade and security deals across five continents. Canada's new government is diversifying Canada's trade to create certainty, security, and prosperity for Canadians. Exports to markets beyond the United States have now reached their highest share in four decades: a strong foundation from which to expand our global reach.

Budget 2026 builds on that advantage by strengthening supply chains and trade infrastructure, protecting Canadian industries from unfair trade practices, and giving exporters more tools to compete internationally.

Managing Canada's trading relationship with the United States

For decades, Canada and the United States built one of the world's most integrated economic relationships, one that supported predictable access to each other's markets, major cross-border investment, and millions of jobs on both sides of the border. That relationship has fundamentally changed.

We have recognised that the United States is altering all of its trade relationships, putting tariffs on its closest allies and charging for access to its vast market. Canada and the United States will not return to our old relationship.

We have worked in that context to strike a fair deal that would provide the best access to the U.S. market and greater certainty to Canadian businesses and workers. Throughout, our goal has been to secure the best deal for Canadians, never a deal at any price or on any deadline.

When the United States asked too much and offered too little, we chose to walk away rather than compromise Canada's sovereignty or put Canadian jobs at risk.

In the face of these unjust tariffs, we are stepping in to protect and support our businesses and workers. We have provided nearly $44 billion in tariff relief support to industries and workers across Canada through a suite of programs including the Regional Tariff Response Initiative, the Strategic Response Fund, and support through the Business Development Bank of Canada.

To protect Canadian interests and ensure our businesses compete on a level playing field, on September 8, 2026, Canada also announced proportional countermeasures on products targeted by the United States with rates matching U.S. tariffs. Other existing counter-tariffs against the United States, including on autos, remain in place.

Canada's new government continues to believe that a mutually beneficial trade agreement is achievable. In seeking that path forward, our position is clear: any trade deal must respect Canada's sovereignty and the right of Canadians to determine our own economic future.

Opening new markets and strengthening reliable partnerships

Canada is a reliable global partner. We benefit from one of the most extensive networks of free trade agreements in the world, with preferential access to 1.5 billion consumers across 15 free trade agreements. This means Canada now has a market for our goods representing nearly two thirds of global GDP. But we recognise that long-term growth depends on reaching more customers in more markets. That is why we are working hard to further expand opportunities for Canadian exporters around the world.

The government is on track to double Canada's market access and unlock preferential access to more than 3 billion consumers worldwide. To that end, it recently concluded trade agreements with Ecuador, Indonesia, and the United Arab Emirates, and is advancing efforts to complete new trade agreements in the coming months with the Association of Southeast Asian Nations, the Philippines, India and Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay). The government has also recently begun free trade negotiations with Thailand and Türkiye.

Canada will also look to build on existing agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Canada-European Union Comprehensive Economic and Trade Agreement. We are helping Canadian businesses take greater advantage of these agreements through trade missions, investment attraction efforts, and other initiatives to reach new customers.

In recent months, Canada has launched negotiations on new tax treaties with Qatar and the Kingdom of Saudi Arabia, and negotiations to update and modernise its tax treaty with Australia. These agreements will strengthen Canada's network of 93 tax treaties, reducing barriers to trade and investment with our key partners. Moving forward, the government will look to expand Canada's network of tax treaties to ensure that Canada remains a competitive location for future investments by pension funds and sovereign wealth funds.

Canada-EU cooperation – Alliance for the Future

Canada and Europe are stronger together. As European Commission President Ursula von der Leyen said, "We share one ocean, one set of values, one way of seeing the world." Deepening this partnership will help Canada and Europe secure greater strategic autonomy, build more resilient economies, and create substantial new opportunities for Canadians.

The government has worked to strengthen Canada-EU relations and find opportunities for closer cooperation. Since Canada's new government was elected in spring 2025, Canada has become the first non-European participant in Security Action for Europe (SAFE), improving Canadian companies' access to joint defence procurement supported by the EU's €150 billion loan facility. We have also signed a Joint Declaration on Critical Minerals Collaboration to strengthen cooperation and multilateralism in support of more secure supply chains, bilateral investment and trade, and joint Canada-EU industrial competitiveness. These actions, alongside other agreements and negotiations, have laid the groundwork for this year's Canada-EU summit.

At the Canada-EU summit in October 2026, the EU and Canada launched the Alliance for the Future — a new partnership of nations that will leverage the strategic capabilities of Canada, the EU, and a variable geometry of like-minded nations to address common issues, including strengthening our collective defence, giving us the deepest partnership possible short of accession. Additionally, Canada and the EU will work together in the coming months to make Canada the European Union's first Associate Member, and will discuss the scope and scale of this form of membership.

At the Summit, Canada and the EU announced a series of measures to advance our strategic cooperation and deepen our partnership:

Create new opportunities for Canadians

• More opportunities for Canadians to study, live, and work in Europe. Canada is launching negotiations to expand its participation in Erasmus+, Europe's flagship student and skills exchange program.
• Strengthen competition. Canada and the EU concluded negotiations on an updated Competition Cooperation Agreement, supporting fair competition, giving businesses a more level playing field, and helping protect consumers.
• Faster payment systems. Canada and the EU will support connecting Canada and the EU's instant payment systems to enable Canadians to send money to people and businesses in the EU seamlessly. 

• More choice in banking and insurance. Canada and the EU will launch a Joint Working Group to explore opening their markets further to each other's banks, insurers, and fintech companies.

Build more resilient economies

• Increase LNG exports. Canada and the EU will examine market conditions, infrastructure requirements, and other factors to assess the viability of increased exports. 
• New ways to trade. Canada and the EU concluded negotiations on a landmark Digital Trade Agreement, reducing barriers, making our economic relations more resilient and future-ready, and reinforcing our cooperation. This agreement ensures that our trade relationship remains modern and reliable, and maintains strong safeguards for our peoples and their rights.

Secure greater strategic autonomy

• Stronger critical minerals supply chains. Canada signed a new treaty framework with the European Investment Bank (EIB) to allow the EIB to invest in Canadian critical minerals projects that will provide the materials needed for defence and the energy transition. The government is also launching work to explore a raw materials stockpiling and investment framework to build more secure critical minerals supply chains.
• More options for navigation services. By partnering with the EU's Galileo program and the European Space Agency, Canada will strengthen positioning data and navigation services across Canada and the Arctic.
• Connect Canada and Europe through secure digital infrastructure. We are taking the first steps toward a new transatlantic data cable that would give Canada and Europe a direct, secure route for rapid data exchange—reducing reliance on a single provider.
• Increased production of Canadian-made waterbombers. Up to $2.5 billion in financing for Alberta-based De Havilland to dramatically increase waterbomber production capacity. This financing will help European partners and Canada fight wildfires and support thousands of jobs in Wheatland County, Alberta.
• Better connection for responding to disasters. Canada and the EU will explore cooperation on IRIS², one of the world's most advanced satellite systems. This satellite network will provide secure connectivity for governments, defence, and emergency services during crises. 

The new Alliance for the Future is built for people—Canadian and European. It helps students looking to study abroad, researchers collaborating to push the boundaries of what is possible, and entrepreneurs looking to reach new markets. Together, Canada and Europe are building a better, closer, more resilient future for our peoples, and we will continue to build ever-closer ties.

Modernising trade systems

Canada's economy grows and competes when businesses can reliably get their goods and services to customers and when workers have access to good, high-paying jobs and opportunities. Recent consultations with industry, Indigenous partners, workers, and employers highlighted the importance of reliable supply chains, efficient trade corridors, and a modern labour relations framework: one that supports both economic resilience and workers' rights.

To support investments in trade-enabling infrastructure and deliver on commitments made under the Trade Infrastructure Strategy announced in Budget 2025, the government launched the $5 billion Trade Diversification Corridors Fund and the $1 billion Arctic Infrastructure Fund. By reducing bottlenecks along key trade corridors, these investments will support more resilient supply chains, facilitate trade, and enhance competitiveness.

As outlined in Section 2.1, Bill C-39, the Building Canada Strong Act, will also strengthen trade corridors and transportation networks, help prevent disruptions to critical infrastructure, and support workers in federally regulated sectors.

Modernising trade infrastructure extends beyond just building new ports, roads, and railways. It also means modernising the digital systems that vitally support trade and keep goods moving efficiently through supply chains. These systems allow businesses to exchange documents electronically, track shipments in real time, meet customs requirements, and arrange financing and insurance. Canada has made important progress in moving away from paper-based documentation, but we continue to lag many of our trading partners in using digital tools to move goods. To close this gap:

• Budget 2026 proposes to provide $55.3 million over two years on a cash basis, starting in 2026-27, to Transport Canada to advance digital trade processes. This funding would bring government and industry together to guide the work, update legislation and regulations, test new digital tools, and help businesses adopt them for a more competitive and productive trading environment.

The threats posed by unfairly traded imports also risk harming our industries and workers. To protect Canadians, our trade remedy system allows duties to be imposed on unfairly priced or subsidised goods that are sold here in Canada. In 2025, these duties applied to approximately $3.3 billion in imports across industries employing more than 43,000 Canadians. As global trade patterns continue to shift, Canada needs a trade remedy system that can respond effectively to emerging unfair competition. To strengthen Canada's ability to respond to unfair trade:

• Budget 2026 announces the government's intention to launch public consultations on potential legislative and regulatory changes to strengthen this system and make it more efficient.

Enhancing Canada's trade finance toolkit

In the face of shifting global trade and uncertainty, the government is helping Canadian businesses reach new markets and reduce their reliance on any single trading partner. We are deploying federal financing tools to help businesses expand internationally, unlock new opportunities, and overcome barriers to growth.

One of these important tools is the Canada Account—a financing mechanism administered by Export Development Canada that supports high-impact projects and export transactions in our national interest. To ensure that the Canada Account continues to meet the needs of Canadian businesses:

• Budget 2026 proposes to introduce legislative amendments to increase the Canada Account limit and modernise its governance framework, providing greater flexibility to streamline approvals and support strategic, high-value transactions.

Another tool is the Canadian Commercial Corporation (CCC), which helps Canadian businesses sell their goods and services to international government buyers, creating more export opportunities across our economy. To better support Canadian exporters:

• Budget 2026 announces the government's intention to amend the Canadian Commercial Corporation Act, Export Development Act, and Financial Administration Act to make the CCC a subsidiary of Export Development Canada. This will better bring together two organisations dedicated to supporting Canadian exporters and allow for better alignment with federal priorities.

These changes will ensure Canadian businesses have the financing and trade support they need to pursue opportunities abroad and grow in new markets.

2.3 Helping Canadians and their businesses navigate change

Tariffs and trade disruptions are creating new challenges for Canadian workers, businesses, and industries. From small businesses facing rising costs to workers worried about job losses and plant closures, Canadians across the country are feeling the effects of a rapidly changing global economy. But the government has a plan and is here to help.

We are responding with targeted support for workers, businesses, and sectors affected by damaging tariffs to help workers access income and training supports, help businesses invest and grow, and support key sectors as they adapt to changing global markets.

Budget 2026 builds on these efforts, helping small businesses and key sectors navigate immediate pressures while strengthening their ability to adapt, diversify, grow, and compete over the long term. That is how we can help Canadians navigate this period of profound change and come out of it with a stronger, more diversified, and more competitive economy.

Supporting Canadian workers and businesses

Historically, economic integration with great powers was a source of Canada's strength. More recently, it became a vulnerability, with tariffs being used as a tool of economic leverage. That is why we are building a stronger, more competitive Canadian economy at home and diversifying our partnerships abroad. We are reducing our reliance on one partner, and ensuring Canadian businesses can be more resilient in the face of global shocks.

In Canada, we take care of each other. In times of crisis, we leave no one behind. That is why we are taking action to help Canadian workers and businesses withstand these pressures and emerge stronger. Workers affected by trade disruptions can access income and training supports to help them through difficult periods and prepare for new opportunities. Businesses of all sizes can get support to modernise their operations, improve their productivity, and access new markets.

For companies that must import products from the United States, the government continues to provide a path to tariff relief through the United States Surtax Remission Order (2025).

Many businesses can qualify for relief automatically, without submitting an individual request. This includes:

• goods used by identified public health, public safety, and national security entities
• steel goods used in auto and aerospace manufacturing
• non-steel goods used in Canadian manufacturing, processing, food and beverage packaging, and agricultural production

Relief is also available to any importer of more than 500 products that have been determined not to be produced in Canada.

Companies not covered by this existing relief can apply to the Department of Finance Canada for individual remission. We continue to prioritise these requests and are dedicating additional resources to respond to heightened demand.

Figure 2.10 – The Government of Canada has announced almost $44 billion in support for workers and businesses affected by tariffs since March 2025

Since the Spring Economic Update 2026, $16.6 billion of support has been announced for workers and businesses. In addition to targeted support for food security, forestry, and metals, this includes:

• An additional $6.1 billion to protect Ontario's steel industry, fortify its automotive industry, and build out Ontario's critical minerals supply chain, including in the Ring of Fire.
• An additional $1.5 billion through the Regional Tariff Response Initiative to provide cash and working capital to small- and medium-sized businesses, helping them maintain Canadian operations and retain employees in the face of tariffs.
• A new $500 million financing stream under the Business Development Bank of Canada (BDC)'s Pivot to Grow program to help businesses manage immediate cash-flow pressures.
• Broader access to the BDC's tariff-related programs by lowering the minimum revenue requirement to $1 million, allowing more businesses to qualify for support.
• An additional $2 billion investment through the new Canada Strong Diversification Fund to help tariff-affected businesses move forward with shovel-ready projects, including those that will help repair, replace, or restore existing equipment and buildings.
• A new $3.5 billion package of Rapid Response Supports for Workers and Employers to help Canadians affected by tariffs. These include help to access income support through more flexible Employment Insurance rules and extended benefits for eligible workers, as well as improvements to JobBank.gc.ca, which helps workers find new opportunities. Employers can also access support through the new Workforce Retention and Retraining Program to help keep workers on the job and provide training during difficult periods.
• New flexibilities for the Large Enterprise Tariff Loan Facility, administered by the Canada Enterprise Emergency Funding Corporation, including increasing the amount of support available to firms and the maximum term of loans.

Supporting small- and medium-sized businesses through trade disruptions

Small- and medium-sized businesses are the backbone of Canada's economy. In every region and in every town of our country, they create jobs, support local economies, and make our communities good places to live. Today, faced with disruptive and unjustified tariffs, many small- and medium-sized businesses are fighting to protect jobs, maintain operations, and stay in business.

The government has responded to these challenges by making its programs more accessible and responsive to the needs of small- and medium-sized businesses. This includes simplifying the application process for the Business Development Bank of Canada (BDC)'s Pivot to Grow program, which has provided approximately $250 million in financing support through nearly 200 business loans to date, and lowering the minimum annual revenue requirement for BDC's direct tariff-related programs to $1 million so that more small businesses can access it.

To help businesses cover payroll costs and defend Canadian jobs, industries, and supply chains, we have also enhanced the Regional Tariff Response Initiative (RTRI), delivered by Canada's regional development agencies.

The RTRI provides two main forms of support. First, it supports investments that help businesses improve productivity and competitiveness, and reduce exposure to future trade disruptions, making them better equipped to succeed in a changing economy. Second, businesses can also use the RTRI to access liquidity assistance—financing to help maintain operations and keep workers on the job while they respond to trade disruptions and plan for the future.

Since fall 2025, the RTRI has supported nearly $1.2 billion in investments for approximately 1,200 businesses, helping leverage an additional $2 billion from private and partner investments and supporting almost 25,000 jobs across Canada. Investments have been targeted to sectors most impacted by tariffs, including the steel and automotive industries. For example, regional development agencies have exceeded their targets for the steel and automotive sectors, investing more than $340 million in steel and almost $170 million in automotive, compared with targets of $150 million and $100 million, respectively.

Building on this momentum, investments in the RTRI have reached nearly $3.5 billion. This includes additional support for sectors most affected by trade disruptions, including forestry, steel, copper, and aluminum, as well as sectors that help strengthen Canada's food security.

Regional Tariff Response Initiative: project examples

1. Yukon
Cobalt Construction
Invest in 3D grade control to improve productivity, reduce training time, and improve safety
RTRI: $389,285

2. Nunavut
Nunavut Fisheries Association
Research, identify, and evaluate new opportunities for northern Canadian seafood exports
RTRI: $933,586

3. British Columbia
COTA Aviation Ltd
Expand aerospace and defence manufacturing capacity
RTRI: $1,000,000

4. Alberta
RAM Elevators & Lifts
Modernise manufacturing base, expand dealer networks, and strengthen Canadian supply chains
RTRI: $1,000,000

5. Saskatchewan
Saskatchewan Trade and Export Partnership
Help Prairie small- and medium-sized businesses access new domestic and international markets
RTRI: $5,100,000

6. Manitoba
Premium Products Inc.
Expand value-added flax processing in Manitoba and strengthen export readiness
RTRI: $516,000

7. Northern Ontario
Pilot Diamond Ltd.
Advance manufacturing technologies to support mineral exploration and mining
RTRI: $969,000

8. Southern Ontario
Kumi Canada Corporation
Invest in automotive parts manufacturer specialising in plastic injection-molded interior components to adopt new advanced technologies to modernise operations
RTRI: $9,375,000

9. Québec
Fjordal Aluminium Inc.
Aluminum manufacturing productivity improvements and expanded production capacity
RTRI: $1,000,000

10. New Brunswick
Ocean Steel & Construction Ltd.
Invest in automation and advanced fabrication technologies
RTRI: $750,000

11. Nova Scotia
Tri-Star Industries Ltd.
Manufacturing modernisation and digital technology adoption
RTRI: $375,000

12. Prince Edward Island
P.E.I. Mussel King Inc.
Acquire automated equipment
RTRI: $363,250

13. Newfoundland and Labrador
Green Seafoods Ltd.
Product diversification and processing upgrades
RTRI: $237,500

Delivering more responsive regional support for businesses

Canada's regional development agencies are an important channel for supporting businesses and communities facing unique regional economic circumstances. They provide targeted support that protects jobs, strengthens local industries, and helps businesses respond to economic and trade-related disruptions. However, existing program parameters can limit the ability of regional development agencies to respond to the specific needs of businesses, including smaller firms. Greater flexibility would allow regional development programming to better respond to local economic conditions and emerging pressures.

• Budget 2026 announces that the government will be providing flexibility for regional development agencies to tailor support to smaller businesses and organisations across Canada, while maintaining appropriate fiscal oversight and accountability.

Supporting a more competitive wine sector

From grape growing and wine making to retail sales and tourism, Canada's wine sector supports Canadian careers and growing businesses in rural communities across Canada, from Niagara to the Okanagan Valley, and from the Eastern Townships to the Annapolis Valley. The sector is facing serious headwinds, including rising costs, labour shortages, tariffs, and severe weather events.

Originally launched in July 2022, the Wine Sector Support Program provides financial support to licensed Canadian wineries to help them adapt to these challenges and remain competitive. To further strengthen Canada's wine sector:

• Budget 2026 proposes to provide $176.9 million over three years, starting in 2027-28, to Agriculture and Agri-Food Canada to renew the Wine Sector Support Program. 

2.4 Building one Canadian economy

Canada is stronger when Canadians can buy, sell, and work anywhere in the country. Removing barriers between provinces and territories can create new opportunities for workers and businesses, strengthen domestic supply chains, and help Canada make the most of our own market.

Faced with outside threats to our economy and to our sovereignty, Canadians from all over the country have stood together. We are choosing to buy Canadian steel, lumber, and alcohol, and we are choosing Canadian services. Yet different skill recognition frameworks, regulatory barriers, and other internal barriers prevent Canada from acting as one Canadian economy.

The Atlantic Economic Panel's recent blueprint, Bolder Ambitions: Greater Prosperity for All, highlights the benefits of greater cooperation among the four Atlantic provinces, including by working together as one economic region to achieve greater scale, unlock investment, and drive growth. These priorities reflect a broader imperative to strengthen economic integration and build a stronger Canadian economy. Budget 2026 advances initiatives in key areas highlighted by the Panel, including accelerating major project development, strengthening electricity infrastructure, developing Canada's natural resources, and building the skilled workforce needed to support growth.

The International Monetary Fund estimates that eliminating internal trade barriers could increase Canada's GDP by as much as 7%, or up to $210 billion annually. That is why the government is making it easier for Canadian businesses to reach customers from coast to coast to coast, and in turn, easier for Canadians to be our own best customers. We are creating a more united Canada by:

• Continuing to work with provinces and territories to make it easier for service providers and businesses licensed or certified in one jurisdiction to operate in another.
• Making it easier for Canadian workers to take their skills anywhere in the country by introducing a new 30-day service standard for credential recognition and the development of digital credential verification tools for skilled trades.
• Supporting more than 2,000 businesses through 30 domestic trade missions and market-development initiatives, helping them find new customers and opportunities across Canada.
• Advancing practical reforms to remove internal trade barriers in various sectors:
• Aligning approval processes for new building materials and prefabricated homes, helping manufacturers and builders use modern construction methods across the country.
• Making it easier for construction workers to work anywhere in Canada by recognising key health and safety training requirements, reducing the need to repeat comparable training.
• Helping Canadian food producers reach new customers across the country by providing tailored support to provincially licensed businesses seeking the federal licence required to sell food across provincial and territorial borders.
• Giving Canadians greater access to Canadian wine, beer, and spirits through direct-to-consumer alcohol sales in participating provinces and territories.

Governments across Canada have also signed the Canadian Mutual Recognition Agreement on the Sale of Goods, making it easier for businesses to sell products across provincial and territorial borders. Building on this momentum, first ministers have agreed to work toward an agreement in principle on the model mutual recognition legislation. In practice, this means that governments would adopt common rules so that if a product can be sold, a service can be provided, or a worker is qualified in one province or territory, the same can be done in another province or territory by default. This provides clearer and more predictable rules for businesses and workers to access markets and job opportunities across Canada.

Making internal trade work for Canadian businesses

Internal trade barriers are not abstract. They can prevent a local business from serving nearby customers or make it harder for a growing company to find customers and suppliers elsewhere in Canada. In Lloydminster, straddling the Alberta–Saskatchewan border, a retailer on the Alberta side previously could not sell prepared foods such as sandwiches to a store only metres away on the Saskatchewan side without a federal food licence. Changes to the Safe Food for Canadians Regulations now allow provincially regulated food businesses to trade across Lloydminster, a reform that a survey found could benefit nine out of 10 local food businesses such as food processors, distributors, and those participating in farmers' markets.

The Domestic Trade Commissioners Network is also supporting internal trade by helping Canadian businesses look across provincial and territorial borders for their next opportunities to grow. For example, with support from PrairiesCan and its regional partners, Prairie businesses have joined targeted missions across Canada, from connecting with major defence contractors and shipbuilders in Halifax, to exploring export diversification opportunities through the Port of Churchill, to meeting new customers and suppliers at major agricultural events. These connections are helping businesses tap into opportunities across Canada and grow in the Canadian market.

A more integrated economy requires capital to move efficiently across Canada. Canada's capital markets are strong, yet securities regulation remains fragmented across 13 provincial and territorial jurisdictions. This creates unnecessary costs, duplication, and uncertainty for outside investors. Ontario's planned participation in Canada's national securities regulatory passport system is an important step toward a more integrated national capital market, making it easier for businesses to raise capital across Canada and reach a broader base of investors.

Removing internal trade barriers is only part of the solution. The government is also investing in the conditions needed for businesses and workers to take full advantage of a more integrated national market. Through support for tariff-affected sectors, investments in skills and labour mobility, actions to accelerate nation-building projects, and strategic procurements under the Buy Canadian Policy to strengthen Canadian industrial capacity, the government is helping businesses expand production and build scale across Canada.

Together, these measures will strengthen domestic supply chains, boost productivity, and ensure Canadians can benefit from the opportunities created by building one Canadian economy.

Spotlight on gender and diversity impacts

Budget 2026 strengthens Canada's competitiveness by making trade easier for Canadian businesses by:

• Laying the groundwork for broader use of digital trade processes by bringing government and industry together to guide implementation, updating legislation and regulations, testing new digital tools, and supporting their adoption. These efforts will help make cross-border trade simpler and more efficient for importers and exporters, customs brokers, transportation and logistics providers, and financial institutions, while helping Canadian businesses reach new markets.

Further information on the expected gender and diversity impacts of Budget 2026 measures across a range of population groups is provided in Annex 4.