FONOM sees Northern Ontario opportunities in Budget 2026 as Ottawa forecasts a $62.3-billion deficit and major investments
The federal plan combines business incentives and large capital commitments with targeted household relief, while Northern Ontario municipalities see opportunities in mining, forestry and infrastructure
Thunder Bay – National News — The federal government is forecasting a $62.3-billion deficit for 2026-27 after tabling a budget built around business investment, trade diversification and targeted cost-of-living relief.
Budget 2026 projects the deficit will edge up to $62.5 billion in 2027-28 before declining to $52.9 billion by 2030-31. The deficit is forecast at 1.8 per cent of gross domestic product this year and 1.3 per cent at the end of the planning period. Federal debt is expected to remain near 40 per cent of GDP.
The government says it will balance day-to-day operating spending with revenues by 2027-28 and keep the deficit-to-GDP ratio on a downward path.
Those are forecasts, not guaranteed results. They depend on economic growth, revenues and program costs developing broadly as expected.
The budget groups $98 billion in measures under growth and investment and $48 billion under support for people over the planning period. Those are rounded category totals in the government’s fiscal presentation.
Household and community measures
For households, Ottawa proposes a one-time 50-per-cent increase to the Canada Groceries and Essentials Benefit for the 2026-27 benefit year.
The government says the early-2027 payment would provide up to $339 for a single person without children and up to $679 for a couple with two children.
The plan also proposes a refundable Canada Caregiver Credit worth up to $1,260 in 2027, more than $2 billion for a national heat-pump rebate and $44.7 billion over 11 years for housing and homelessness measures.
Nutrition North Canada would receive expanded and more stable funding for remote northern communities.
Ottawa also proposes more than $50 billion over 10 years for Indigenous programs and services. That includes $32 billion for First Nations housing and infrastructure and more than $18 billion over six years for education, skills, health, community safety, children and families, and emergency management.
Delivery details and agreements will determine how quickly communities see results.
Northern Ontario municipalities welcome investment focus
The Federation of Northern Ontario Municipalities said the budget’s focus on infrastructure, critical minerals, energy, housing and economic development could create opportunities across the region.
FONOM represents municipalities in northeastern Ontario and regularly advocates on infrastructure, economic development and other regional concerns.
The organization said Northern Ontario’s mining, forestry, manufacturing and energy sectors position the region to support the federal government’s national economic goals.
“We are encouraged by the federal government’s commitment to building a stronger Canadian economy and the opportunities these investments could bring to Northern Ontario,” FONOM president Dave Plourde said in a statement.
“Our communities have tremendous potential, and continued collaboration between all levels of government will help ensure that Northern municipalities and industries can benefit from this growth.”
FONOM also called for federal programs to recognize the limited tax bases, long distances and higher construction costs facing smaller and rural municipalities.
The organization said infrastructure and housing programs must be accessible to communities with fewer administrative and financial resources.
FONOM seeks highway funding partnerships
Transportation remains a central concern for Northern Ontario municipalities.
FONOM urged Ottawa to work with the Ontario government on dedicated funding partnerships for Highway 69 and the Trans-Canada Highway corridors formed by highways 11 and 17.
The organization said those routes are essential for residents, businesses, resource industries and the movement of goods across Canada. It called for long-term, predictable funding to accelerate expansion and modernization work.
FONOM’s request is an advocacy position. The budget does not, by itself, confirm dedicated funding for the three highway corridors.
The next steps will depend on federal-provincial negotiations, project eligibility and future funding agreements.
Business investment and fiscal risks
On the business side, the budget centres on faster tax deductions for qualifying investment, new growth capital and support for sectors facing U.S. tariffs.
It includes $6.5 billion over six years for a forest-sector transformation strategy and $2.3 billion for critical minerals. Both areas have significant implications for Northern Ontario communities, workers and Indigenous nations.
Conservative Leader Pierre Poilievre said his party would oppose the budget, arguing its borrowing would add to inflation and living costs.
The government says the plan is disciplined because the deficit declines as a share of the economy and operating spending moves into balance.
Most tax and spending changes still require parliamentary approval, program rules or agreements with provinces, territories and Indigenous partners.
The first test is whether the fiscal assumptions hold as trade tensions continue to weigh on growth. The budget forecasts real GDP growth of one per cent in 2026 and 1.7 per cent in 2027.
