Canada's Budget 2026 Unveils $151.5 Billion in Spending as U.S. Midterms Shift Congress
Prime Minister Mark Carney released a federal budget outlining $151.5 billion in new spending and a $62.3 billion deficit, boosting defence and aerospace stocks. Meanwhile, Democrats flipped both chambers of the U.S. Congress in midterm elections.
Prime Minister Mark Carney has released Canada’s federal budget, known as Budget 2026, which outlines $151.5 billion in new spending over five years and reports a $62.3 billion deficit. The budget earmarked tens of millions of dollars for studies to promote interprovincial power grid links and announced $2.3 billion over five years to purchase drones for the Canadian Armed Forces. Analysts have identified Volatus Aerospace Inc. as a potential beneficiary of this drone funding initiative. Maritime Launch Services Inc. could also benefit from $2.7 billion earmarked for space funding in the budget. North West Company Inc. saw its price target raised following budget proposals for grocery subsidies and Northern infrastructure.
In corporate developments, Allied Gold Corp. shares gained 23 per cent after the company updated its earnings outlook and beat estimates on earnings per share. CAE agreed to sell its airline operations software business, Flightscape, to SITA for US$500 million. Canadian Tire posted a net income of $214.2 million in its second-quarter earnings. Payments Canada launched its national instant payment system after years of delays.
South of the border, Democrats flipped both the House of Representatives and the Senate in the U.S. midterm elections, a shift that may affect future trade deals with Canada. Donald Trump vowed to implement a most-favoured-nation policy to lower U.S. pharmaceutical prices. U.S. inflation hit an annual rate of 3.7 per cent in September, rising since the war in Iran began in late February. U.S. housing starts plunged in September due to labour shortages, tariffs, and rising mortgage rates.
In other news, Nvidia CEO Jensen Huang admitted to being unfaithful to his wife while the company investigates if he was targeted by Chinese intelligence. In 2025, three-quarters of two million visitors to South Korea reported travelling for dermatology or plastic surgery.