By Fareed Khan
A version of this article can be found on Substack.
When Mark Carney campaigned in the 2025 federal election for the support of Canadian voters, many believed they were electing a Liberal prime minister who, in addition to standing up against Donald Trump, would place affordability, public services, climate action, and social investment at the centre of government policy. After years of economic anxiety, soaring housing costs, a strained health care system, and growing inequality, voters expected a government willing to use the power of the state to improve the lives of ordinary people.
Budget 2026 suggests something very different.
Although the Carney government continues to employ Liberal language about inclusion, fairness, and nation-building, its economic priorities increasingly resemble those of former Conservative Prime Minister Stephen Harper. Like Harper, Carney argues that prosperity begins with investment, that governments should focus on creating favourable conditions for corporations, and that economic growth generated by businesses will eventually benefit everyone else. The assumption underpinning this approach is familiar—help investors and corporations first, and the benefits will ultimately trickle down to workers, families, and communities.
The problem is that Canadians have heard this argument before, in the form of theories about “trickle down economics,” a theory that has been thoroughly discredited.
For decades, governments have justified corporate tax cuts, subsidies, and investment incentives on the grounds that they would increase productivity, raise wages, and improve living standards for everyone. Yet many Canadians today find themselves less economically secure than previous generations. As corporate share values have increased, CEO salaries have skyrocketed, and the wages of average people have stagnated, housing costs have exploded, household debt has surged, food-bank usage has reached record levels, and growing numbers of people struggle to access basic health care. Against that backdrop, Budget 2026 raises a fundamental question. If public resources are available on such a large scale , why is the government's most ambitious initiative directed toward helping corporations that take in billions of dollars in revenue, rather than toward solving the problems that affect ordinary Canadians every day?
The budget's defining priority
The clearest indication of any government's priorities is where it chooses to spend public money. Budget 2026 contains significant commitments for housing, Indigenous programs, affordability measures, defence, and infrastructure projects. Yet the single largest initiative in the entire budget is not aimed at expanding health care, accelerating housing construction, reducing poverty, or improving affordability for struggling families. Instead, it is the Productivity Mega Deduction (PMD), a corporate tax measure that will direct billions of dollars in public support to private corporations.
The distribution of those benefits is particularly revealing. According to independent analysis, nearly 40 per cent of the tax deduction's value is expected to flow to oil, gas, and mining companies. These are not industries facing a crisis of profitability. Canada's oil and gas sector alone has generated more than $180 billion in profits since 2021 while already benefiting from preferential tax treatment, publicly funded infrastructure, export financing programs, and a wide range of government investment incentives accumulated over decades. Despite these substantial advantages, the Carney government has chosen to provide billions more in support to some of the country's most profitable corporate sectors.
At an estimated cost of $36 billion over five years, the PMD dwarfs many of the budget's major social investments. Direct affordability measures total roughly $14 billion, while housing initiatives account for approximately $16 billion. In other words, a single corporate tax measure exceeds either of these priorities individually and surpasses them collectively. Supporters of the policy argue that stimulating private-sector investment will boost productivity, strengthen economic growth, and ultimately benefit Canadians. Perhaps it will. However, the more important question is not whether corporations will benefit. They almost certainly will.
The real question is whether ordinary Canadians facing unaffordable rents, stagnant wages, overcrowded emergency rooms, rising grocery bills, and an increasingly uncertain economic future should have been a lower priority than highly profitable corporations. Judging by the allocation of resources in Budget 2026, the answer appears difficult to avoid. When the government's largest commitment is directed toward corporate tax relief rather than addressing the challenges affecting millions of Canadians, it sends a clear signal about whose interests occupy the centre of its economic vision.
Harper’s doctrine in Liberal clothing
Stephen Harper's economic philosophy was built on the belief that governments create prosperity primarily by supporting business investment, lowering taxes, reducing regulatory barriers, and allowing markets to drive growth. Budget 2026 reflects many of those same assumptions. The language in Carney’s budget may be somewhat different—Harper spoke about competitiveness and free markets while Carney speaks about nation-building, economic resilience, and an investment supercycle. Yet beneath the rhetoric lies a remarkably similar strategy—public support for private capital as the primary engine of national prosperity. The resemblance becomes even clearer when examining who receives the largest benefits.
Major resource extraction industries—oil, gas, and mining corporations—emerge as the biggest winners. These sectors already enjoy numerous tax advantages, infrastructure supports, financing tools, depreciation provisions, and various public incentives that have accumulated over decades, and yet the federal government has chosen to provide billions more in assistance. This is not the economic approach many voters expected from a Liberal government. It is far closer to the corporate-centred development model that defined the policies of the Conservative government of more than a decade ago.
Where are the investments in health care?
Perhaps the most striking omission in Budget 2026 is what it does not contain.
Health care remains one of the most urgent concerns facing Canadians. Millions lack access to a family physician. Emergency rooms continue to experience staffing shortages and closures. Health-care workers report growing burnout. Provincial governments have repeatedly warned that growing pressures are threatening the long-term sustainability of the system. And yet health care received no transformational funding commitment.
Despite a nationwide shortage of family physicians and growing strain across the health-care system, the budget provides no major increase to the Canada Health Transfer, no comprehensive strategy to recruit and retain doctors, no meaningful expansion of medical school capacity, and no national plan to ensure Canadians can access primary care. Instead, it offers targeted funding for mental health services, Indigenous health programs, and community care initiatives. Although these investments are positive, they are not commensurate with the scale of the crisis. When contrasted with the billions directed toward corporate tax incentives and business support measures, the disparity in the government's priorities becomes impossible to miss.
When businesses sought investment incentives, Ottawa found tens of billions of dollars. When Canadians sought access to family doctors and functioning health-care systems, they received incremental measures and modest commitments. That imbalance reveals much about the government's priorities.
Affordability without transformation
The government deserves credit for recognizing that affordability remains one of the defining challenges facing Canadians. Measures such as the expanded Groceries and Essentials Benefit, enhancements to the Canada Workers Benefit, caregiver tax credits, child-care supports, and home energy retrofit programs will provide meaningful assistance to many households. For families struggling to balance rising costs with stagnant incomes, these initiatives offer welcome relief and may help ease some of the immediate financial pressures weighing on household budgets.
However, the scale of that support remains modest when measured against the severity of the affordability crisis facing the country. Canadians are not simply experiencing a temporary period of elevated prices. They are confronting a deeper structural problem that has been years in the making. Food prices remain high and are unlikely to decline significantly while transportation costs continue to be driven by elevated fuel prices. The cost of purchasing a home remains beyond the reach of many Canadians, rents are consuming an ever-increasing share of household income, and transportation and energy costs continue to strain family finances. At the same time, wage growth has often failed to keep pace with the rising cost of living, leaving many workers feeling as though they are falling further behind despite working just as hard as ever.
Most of the budget's affordability measures are designed to help lower and modest-income Canadians manage these pressures rather than fundamentally alter the economic conditions that have produced them. That distinction is important. Providing targeted assistance to households experiencing financial hardship is both necessary and worthwhile, and for those who receive it the benefits will be real. Yet addressing the underlying forces driving unaffordable housing, rising living costs, and growing economic insecurity would benefit a much broader segment of the population while producing more durable and lasting results.
Viewed through that lens, Budget 2026 is largely a strategy for managing the consequences of the affordability crisis rather than resolving its causes. Enhanced benefits and targeted tax credits may help Canadians cope with rising expenses, but they do little to address the structural factors that continue to push the costs of housing, food, transportation, and other necessities beyond the reach of many households. Helping someone afford groceries this month is unquestionably important. Creating the economic conditions in which they no longer require emergency supports is even more important. On that measure, the budget focuses far more on alleviating symptoms than on implementing the kind of transformative reforms needed to improve affordability and economic security for millions of Canadians over the long term.
Housing progress without scale
Housing is arguably the strongest social-policy element of the budget. The commitment of approximately $16 billion toward housing, homelessness reduction, supportive housing, and non-market housing is substantial. Additional investments in First Nations housing and infrastructure are also significant.
However, context matters. Canada's housing shortage is measured in millions of homes across the country. Homelessness continues to rise in many communities, rental vacancy rates remain extremely low in major urban centres while rental costs rise, and home ownership has increasingly become unattainable for younger Canadians. Against the scale of the crisis, the government's response appears inadequate.
A government willing to commit $36 billion to one corporate tax measure could presumably have pursued a far more ambitious housing strategy if it had chosen to do so.
The issue is not whether housing received funding. It did. The issue is whether housing received the same level of political urgency as corporate investment. The budget suggests that it did not.
Corporate socialism and the double standard
One of the most revealing double standards in modern political discourse concerns how public spending is described by critics. When direct assistance is provided to low-income families, unemployed workers, or people struggling to afford housing, they are often quick to denounce such programs as "socialism," government dependency, or unnecessary state intervention. Yet when governments provide billions of dollars in tax incentives, subsidies, grants, loan guarantees, and other forms of financial assistance to large corporations, particularly highly profitable ones, those same measures are rarely described in similar terms. Instead, they are routinely portrayed as prudent economic policy, sound investments, or necessary tools for promoting growth and competitiveness.
This inconsistency raises an obvious question. If it is considered "socialism" to help a struggling family pay rent, buy groceries, or access affordable child care, why is it not considered socialism when governments transfer billions of dollars in public resources to profitable corporations? If public investment can be justified on the grounds that it strengthens businesses, creates jobs, and stimulates economic activity, then the same logic should apply equally, if not more forcefully, to investments in health care, housing, education, and poverty reduction. After all, healthy, educated, and economically secure citizens are not merely beneficiaries of public policy, they are also the foundation of a productive and prosperous economy.
The Carney government's budget appears to answer this question through its spending priorities. It reflects a belief that investments in corporations and private capital are more likely to generate economic returns than comparable investments in people. Progressives have long challenged that assumption by arguing that a society with affordable housing, accessible health care, quality education, and adequate incomes is not only healthier and more equitable but also more productive, innovative, and economically resilient. Investments in people can generate substantial economic returns, often creating long-term benefits that extend well beyond what can be measured on a corporate balance sheet.
Yet Budget 2026 places its largest bet elsewhere, by making its most ambitious commitment toward corporate investment incentives. In doing so, the government sends a clear signal about where its priorities lie.
Climate commitments versus fossil fuel expansion
The budget also exposes contradictions in the government's climate agenda. While there are obviously positive environmental measures in the budged—investments in renewable energy, electricity infrastructure, electric vehicle charging networks, nuclear energy, and clean-energy tax credits—at the same time, the largest beneficiaries of federal support remain fossil fuel and resource extraction industries.
This creates an obvious contradiction. The government claims to be advancing climate objectives while simultaneously directing billions toward industries whose activities contribute significantly to greenhouse gas emissions. Environmental organizations have argued that these competing priorities undermine Canada's international climate commitments—criticism is difficult to dismiss. A government genuinely placing climate action at the centre of economic policy would presumably direct a much larger share of public resources toward accelerating the transition away from fossil fuels rather than expanding support for their continued development.
Again, the issue is one of priorities. The budget consistently favours industrial development and corporate investment over transformative environmental action.
A Liberal government moving to the right
Budget 2026 is not an austerity budget since it contains real spending increases in the areas of housing, Indigenous communities, infrastructure, affordability programs, and public priorities. So the issue is not whether the government spends money. The issue is where it chooses to spend the most of the money.
Taken as a whole, the budget reflects a government increasingly comfortable with a centre-right economic framework that echo policies the Conservative Party would implement if in government. It prioritizes corporate incentives, resource development, private investment, and productivity growth while treating social needs as secondary concerns to be addressed through targeted and limited interventions.
That approach may satisfy Bay Street, and will be welcomed by major investors, large corporations, and the business community. However, whether it satisfies ordinary Canadians is another matter entirely. For voters who expected a government committed to bold action on affordability, health care, inequality, and climate change, Budget 2026 may feel less like a Liberal vision of economic justice and more like a modernized version of Stephen Harper's economic philosophy cloaked under the banner of a party that once called itself “progressive.”
Budget 2026 reveals a government whose rhetoric and policies increasingly mimic those of the Conservatives. Mark Carney campaigned as a Liberal leader prepared to address the economic struggles affecting ordinary Canadians. But the budget suggests a government that continues to place its strongest faith in corporations, investors, and private-sector growth.
The result is a financial document that provides limited relief for a certain segment of the population, while reserving its most ambitious commitments for corporate interests. Canadians struggling to find a family doctor, pay rent, buy groceries, or save for the future will find some assistance in this document. What they are unlikely to find is the transformative response that the scale of today's challenges demands.
Ultimately, Budget 2026 asks Canadians to trust that supporting corporations today will improve their lives tomorrow. That is the same promise Canadians have heard from Conservative governments for decades. Whether they still believe it is a different question altogether.
© 2026 The View From Here. © 2026 Fareed Khan. All Rights Reserved.
