Carney Government's 2026 Budget Extends Clean Energy and Mining Tax Credits Amid Projected $62.3-Billion Deficit
The 2026 Canadian federal budget introduces tax incentives for high-voltage provincial transmission lines, extends clean technology and mining credits, and adds antimony to the critical minerals list, while projecting a $62.3-billion deficit this year and $3.15 trillion in total debt by 2030-31.
The Carney government has tabled its second federal budget for 2026, introducing new tax incentives aimed at expanding Canada's high-voltage electricity transmission infrastructure while extending existing clean energy and mining credits. The fiscal plan also projects significant deficits, with total federal debt expected to reach $3.15 trillion by 2030-31.
Under the budget, high-voltage provincial transmission lines would become eligible for the Clean Electricity investment tax credit, which refunds up to 15 per cent of certain capital costs. To qualify, transmission lines must operate at a minimum of 735 kilovolts in Quebec and Newfoundland, and 500 kilovolts in Alberta, Ontario, Manitoba, and British Columbia. These thresholds target long-distance transmission lines serving large-scale generation, nuclear, and mining projects, providing certainty for longer-term energy developments such as Churchill Falls.
While the budget does not include direct funding commitments for new interprovincial transmission projects, it allocates $37 million to advance cost-benefit studies and cost-sharing discussions between provinces.
The Carney Liberals are also proposing to extend the Clean Technology and Clean Electricity investment tax credits beyond 2035, targeting projects that come online before 2041. The Clean Technology tax credit, which currently refunds up to 30 per cent of capital costs, is proposed to be reduced to 15 per cent in 2040. Ottawa estimates that the changes to these clean economy tax credits will cost $38.5 billion.
For the resource sector, the budget proposes a five-year extension of mining tax credits that were set to expire in 2027. This includes a 15 per cent credit for mineral exploration and a 30 per cent credit for critical minerals. Antimony has been added to the list of minerals eligible for the Critical Mineral Exploration Tax Credit. Additionally, helium exploration and development is proposed to qualify as a Canadian exploration expense.
On the fiscal front, the budget projects a $62.3-billion deficit for the current year. Total federal debt is projected to reach $3.15 trillion by 2030-31, with debt per person hitting $68,131.