查看配图Canadian Finance Minister François-Philippe Champagne tries on new shoes he bought before tabling the 2026 budget. Credit: Finance Canada via X.
Canada plans to extend two mineral exploration tax credits by five years and add antimony to the more generous incentive as Ottawa seeks to turn mineral deposits into domestic production and processing capacity.
Thursday’s federal budget proposes keeping the 15% Mineral Exploration Tax Credit and 30% Critical Mineral Exploration Tax Credit available through March 31, 2032, providing an estimated $956 million (US$684 million) in support over five years. Ottawa also proposes $424.4 million over four years, starting in 2027-28, to renew the Canadian Critical Minerals Strategy.
“But for too long, Canada has fallen behind in bringing those minerals from mine to market,” Finance Minister François-Philippe Champagne said in Parliament. “That is why we are focused on increasing Canadian production and processing of our minerals.”
The package addresses both ends of mining’s investment problem: raising money for discoveries and securing the power, infrastructure and financing needed to develop them. The extensions would give junior explorers a longer financing horizon, while broader electricity and capital-investment measures could help projects move towards construction. Much of the larger funding architecture, however, was announced before budget day.
Surging deficit
Ottawa projects a $62.3-billion deficit in 2026-27, up from $39.3 billion last year, with annual shortfalls continuing through 2030-31. Federal debt is forecast to reach $1.37 trillion this fiscal year and $1.59 trillion by the end of that period, remaining around 40% of gross domestic product. Annual debt-servicing costs would rise to $85.5 billion from $60.2 billion over the same period, according to the Department of Finance.
Running another deficit with no credible plan to return to budgetary balance amounts to mortgaging future generations, said Gabriel Giguère, a senior policy analyst at the Montreal Economic Institute think tank.
“Each new dollar of debt generated by this budget is a dollar borrowed from Canada’s future generations,” Giguère said in e-mailed comments. “This reduces their room to manoeuvre in financing their own priorities, whether new spending or tax cuts.”
Ottawa is counting on stronger revenues and lower spending elsewhere to help finance the package, while continuing to borrow to cover annual deficits. Revenue projections have risen by an average of $23.9 billion a year over five years compared with the spring outlook, supported by higher oil prices, corporate profits, wages and consumption, according to the Department of Finance.
Lower projected program expenses also create room, although some of that reflects delayed spending and lower take-up of existing programs rather than permanent cuts.
Exploration runway
Both exploration credits are currently due to expire next March 31. The proposed extensions would cover eligible flow-through share agreements entered into on or before March 31, 2032, according to the budget’s tax annex.
Flow-through shares let companies transfer eligible exploration and development expenses to investors, who can deduct them from taxable income. The exploration credits provide an additional benefit to individuals financing qualifying grassroots exploration in Canada.
Antimony’s inclusion in the 30% credit would apply to expenditures renounced under eligible agreements entered into after budget day and through March 31, 2032. The credit rate isn’t affected by the move.
The renewed critical minerals strategy would support mining and processing technology, geoscience and research, and targeted funding for priority projects. Ottawa also proposes $34 million over four years, starting in 2027-28, to renew GeoNorth, which provides public geoscience information for northern exploration, infrastructure planning and environmental assessments.
Helium producers would receive separate relief. Ottawa proposes treating eligible helium exploration, development and resource-property acquisition expenses like those in conventional oil and gas, effective for spending incurred on or after budget day. The government estimates the change would provide $54 million in tax relief over four years from 2027-28.
Power and processing
For miners and processors seeking reliable electricity, the budget proposes extending the Clean Technology and Clean Electricity investment tax credits to the end of 2040. The clean technology credit’s reduction to 15% would occur in 2040 instead of 2034.
“Canada has a head start: our grid is already 80% clean, and our electricity is among the most affordable in the G7,” Champagne said.
Eligibility for the clean electricity credit would also expand to the highest-voltage transmission lines within each province, for property acquired and available for use on or after budget day. That could help finance infrastructure serving new mines and industrial developments.
Ottawa proposes nearly $4 billion over 10 years, starting in 2027-28, for electricity infrastructure, renewable energy and priority power projects. A further $37 million in 2027-28 would support analysis of interprovincial connections and discussions about sharing their costs.
“We’re working with provinces, territories, and Indigenous partners to double Canada’s grid capacity by 2050,” Champagne said. “We will connect provincial grids. We will build thousands of kilometres of transmission lines. We will develop the nuclear energy sector.”
Canadian industrial suppliers could benefit from proposed domestic-content bonuses. The government plans 60 days of consultations on additions of up to 10 percentage points to the clean technology credit and five percentage points to the clean electricity credit. Their scope and conditions remain to be determined.
The budget also reaffirms the Productivity Mega Deduction announced in September. It would permanently allow immediate writeoffs for a broader range of capital assets and increase the deduction rate for Canadian development expenses to 100% from 30% on a declining-balance basis. The government puts the economy-wide fiscal cost at $36 billion over five years.
Mining investors wouldn’t qualify for every new incentive. The proposed Canada Growth Incentive would exempt up to $15 million in capital gains per qualifying individual per business, subject to eligibility conditions, but the tax annex explicitly excludes mining businesses. Utilities, financial services and several other sectors are also excluded.
Approval to construction
Ottawa is proposing $187.4 million over five years from 2026-27, plus $24.2 million in future years, to launch and operate a major projects management entity and begin supporting the Mackenzie Valley Highway and Taltson Hydro Expansion in British Columbia.
The entity would provide technical and project-development expertise to help approved projects advance.
“We are already moving major projects forward, with 28 nation-building initiatives referred to the Major Projects Office, including projects in energy, critical minerals and transportation,” Champagne said. “And with Budget 2026, we are building on that progress.”
The budget also reiterates the “one project, one decision, one year” approach in legislation introduced in September. The proposed federal deadline would start after proponents provide all required studies and information; it is not a one-year clock running from a project’s first announcement. Ottawa says Indigenous rights, consultation duties and treaty obligations would remain intact.
For project financing, the budget sets out the structure of the Canada Strong Fund, announced in the spring economic update. Ottawa plans to seed it with $25 billion over three years and introduce legislation establishing an arm’s-length Crown corporation.
The fund would invest alongside private capital on commercial terms. One illustrative model pairs a Canada Infrastructure Bank loan for road and power infrastructure with an opportunity for the fund to invest in a critical minerals developer. The example is a financing model, not an announced project investment.
Bank merger
Ottawa also proposes merging Export Development Canada and the Business Development Bank of Canada into a single federal development bank, combining support for domestic growth and international expansion. A specially constituted board would oversee the transition, with existing products and services maintained.
The government expects its financing Crown corporations to take greater risks than private lenders, potentially widening financing options for mining, processing and infrastructure projects.
For tariff-hit processors and manufacturers, Ottawa says support under the Regional Tariff Response Initiative has reached nearly $3.5 billion, including additional assistance for steel, copper and aluminum. The program offers support for productivity improvements, market diversification and liquidity.
The distinction between financing announcements and operating projects remains central. Ottawa identifies more than $44.6 billion in critical minerals projects under construction or with completed impact or environmental assessments, using 2025 data and selected 2026 projects. The budget’s new exploration and power measures aim to help enlarge that pipeline and move more of it into production.