The Canadian Chamber’s Response to Pre-Budget Consultation 2026

Despite notable progress on red tape, Canadian businesses have faced cost increases, including higher Canada Pension Plan employer costs. The government must move quickly to reduce business taxes and expenses, so domestic firms remain competitive with lower-cost jurisdictions.

This can be achieved by accelerating the operationalization of Health Emergency Readiness Canada (HERC), diversifying financial supports and programming as well as by streamlining regulations to support commercialization and scale-up. Further, the government must pursue opportunities to integrate Canadian companies into global supply chains, targeting areas most relevant to national health and economic security.

With funding set to expire in March 2027, renewal of BDL is critical to sustaining Canada’s only national platform dedicated to democratizing business data, by providing real-time, accessible, and bilingual economic insights, empowering evidence-based decisions in a time of ongoing economic uncertainty. Renewed funding will preserve this vital public-good initiative, enhance Canada’s capacity to monitor and respond to shocks, and deepen partnerships that ensure timely, trustworthy intelligence.

Canada’s competitors – particularly the U.S. with its foreign-derived intangible income regime – offer generous incentives. Improvements should include increasing the tax credit rate to 20 percent, making the refundable portion more accessible, removing the Canadian-Controlled Private Corporation requirement, and ensuring equal access for private and public SMEs.

This Budget 2025 commitment must be upheld to prevent IP flight, support advanced sectors, and ensure Canada can compete with jurisdictions like the UK, France, and the Netherlands that already offer similar regimes. This will help retain IP, scale Canadian innovations, and support domestic growth.

The AII allows faster depreciation of machinery, equipment, and technology, improving after-tax returns and encouraging firms to modernize. As the U.S. expands full expensing for domestic manufacturing and R&D under new legislation, Canada must match with permanent measures to secure investment, close productivity gaps, and boost advanced manufacturing capacity.

This measure would reward companies that create tangible value within Canada’s borders, helping to anchor manufacturing, boost exports, and secure industrial capacity. By improving after-tax returns for domestic production, this deduction will make Canada more attractive for expansion and help offset the competitive pull of U.S. tax incentives, like foreign direct investment and full expensing.

Smart regulation should drive innovation and growth while maintaining health and safety. Aligning federal and provincial rules, eliminating red tape, and emphasizing outcomes over process will improve Canada’s investment climate, reduce friction for businesses, and support productivity.

The domestic defence industry needs a realistic view of Canada’s ambitions and needs. Establishing a defence roadmap for Canada will enable industry to respond with tailored solutions that ensure maximum operational effectiveness. A strategy should:

• Create a Team Canada approach to defence procurement. The government should champion the defence industry in Canada, working collaboratively to put our best foot forward in international defence procurement to attract investment and create jobs.
• Commit to reliably issue export development permits. Domestic defence suppliers need assurances prior to accepting new contracts, and delays in issuing export permits cause multi-national companies to direct business to other jurisdictions, with Canadian workers and industry paying the price.

With Bill C-5, the government has taken an important step to support the development of major projects and drive economic growth in Canada. However, a predictable framework for all major infrastructure projects – beyond those designated as “in the national interest” – is still required. Without broader reform, we risk creating a two-tiered system where some projects are fast-tracked, while others face unnecessary delays. The government must amend the IAA to clarify its scope, timelines, and decision-making authority.

This would support a more flexible and growth-oriented approach to energy development at a time when Canada needs solutions that attract investment and drive economic growth, rather than red tape that dulls our competitive edge.

In line with commitments made at the G7 and the announcement of the Critical Minerals Action Plan, the government must work with industry to attract investment, establish standards-based markets, and develop strategic stockpiles. Moreover, there is a pressing need to align Canada’s increased NATO defence spending commitments with a comprehensive strategy for domestic critical mineral production, processing, refining, and recycling. Coordinated planning in these areas is vital to ensure national security, economic resilience, and long-term sustainability.

While tackling misleading environmental claims is important, the new provisions have created a more complex and uncertain regulatory environment. They have hindered open communication, risked stifling innovation, and discouraged industry participation in climate action. Instead of supporting Canada’s net-zero goals, the amendment has begun to silence good-faith efforts by businesses to make progress on environmental objectives. Despite the updated guidance from the Competition Bureau, legal uncertainty continues. “Greenhushing” will persist, private actions will increase, and Canada’s progress in clean tech will be hindered.

This new reporting requirement adds costly and unnecessary red tape for businesses already managing significant packaging and supply chain challenges, while offering limited environmental benefit. Canada should immediately cease the operations of the Federal Plastics Registry and conduct a comprehensive review of this policy and its impact, as businesses, hospitals, and other public and private institutions simply cannot afford it. Left unchecked, it serves as another illustration of how difficult it is to do business in Canada.

Canada’s agri-food sector is a key economic driver, but adoption of advanced technological tools that boost productivity is lagging. Furthermore, agricultural businesses are often hindered by a lack of trade infrastructure needed to transport goods to global markets. Including Canadian agricultural businesses in these investment decisions will boost food production, help penetrate new markets, and make Canada more competitive globally.

The demand for talent and skills continues to evolve in the fields of artificial intelligence, robotics, quantum, and cyber security. To increase competitiveness and business tech adoption, as well as accelerate productivity and economic growth, Canada should focus on a comprehensive approach to develop tech talent, including targeted programs and policies to identify, attract, grow, and retain highly skilled individuals. The approach should consider the diversification and expansion of the technology workforce pipeline as well as a needs assessment and alignment of skilled workforce immigration programs to help Canadian companies recruit top talent globally through incentive programs, such as fast-track immigration.

Canada’s demographic challenges are well-documented, and our current population levels will not enable us to achieve the economic growth our country needs. The government must leverage immigration, aligning programs with future economy-critical skills gaps and labour needs, while placing the economic needs of provinces and territories at the forefront of immigrant selection and retention in order to ensure it is regionally responsive and addresses the specific population and labour needs.

Employers are struggling to find the workers and skills needed to grow their operations. In collaboration with the Forum of Labour Market Ministers, a national workforce strategy should invest in upskilling and reskilling workers, with a focus on those vulnerable to automation and AI, to close skills gaps in key sectors. A results-driven approach will help displaced workers gain in-demand skills and transition into new roles.

Certain industries and sectors across Canada are particularly vulnerable to unpredictable shifts in U.S. trade policy, and risks are particularly acute in the context of the upcoming 2026 CUSMA review. To this end, the government should proactively engage sectors that are vulnerable to tariff-related disruption and develop tailored support programs that can be deployed rapidly and efficiently when required, while also increasing capacity for processing and expediting urgent tariff-related inquiries.

When Canadian businesses cannot import or export goods, we undermine our own economic growth. Canada must thoughtfully build and maintain our ports, airports, rails, roads, pipelines, and energy grid, so businesses can efficiently transport goods to and from market. Domestic and international trade corridors should strengthen supply chains to establish Canada as a reliable business partner.

Trade is built on trust; if Canadian companies cannot get their goods to market, we risk losing those markets while compromising efforts to diversify our trading relationships. The government should amend the Canada Labour Code to provide new dispute resolution tools for all federally regulated trade infrastructure, such as creating new special mediator process as recommended in the Industrial Inquiry Commission report on longshoring disputes, as well as establishing the authority for the federal cabinet to rapidly impose binding arbitration when collective bargaining fails.

The CARM program transition measure, which allows importers to use their customs broker’s financial security for Release Prior to Payment (RPP), expired on May 20, 2025. Importers must now post their financial security (e.g. a surety bond or cash deposit) to qualify for RPP privileges. This has caused delays, capacity issues at warehouses, and financial burdens for Canadian companies, especially SMEs. The government should provide an exemption for first-time importers and businesses importing low-value or low-volume shipments under RPP.

While government-led initiatives like the Team Canada Trade Missions play a critical role in mobilizing many stakeholders, Canadian business associations are also independently organizing sector-specific, business-oriented missions. The government should support funding and scaling private sector-led missions, especially those that have a pan-Canadian reach into local chambers of commerce and SMEs. Since 98 percent of Canada’s businesses are SMEs, trade diversification efforts will only succeed if businesses of all sizes and regions have meaningful access to alternative foreign markets, and especially in the Indo-Pacific