Experts are cautiously optimistic that the federal government’s plan to spur business investment will move the needle on better productivity and economic growth.
This week’s budget, Prime Minister Mark Carney’s first since taking office, looks to make Canada’s economy a more attractive place to invest by promising billions of dollars for infrastructure and new tax opportunities for businesses.
The measures should have a positive effect on investment, but it remains to be seen how the plan will be executed, said Rachel Samson, vice-president of research at the Institute for Research on Public Policy.
“The question is, will the private sector respond to these initiatives and will they invest? (Is it) enough to overcome some of the barriers they face, such as economic uncertainty (and) trade uncertainty? Have they calibrated these incentives to be enough to push businesses over the edge towards investment?” she said.
The budget promises to enable $1 trillion in total investment, which it says could raise future gross domestic product and purchasing power for Canadians.
The budget plan includes new tax credits, including a “productivity super-deduction” allowing businesses to write off a larger share of new capital investments. It also enhances the Scientific Research and Experimental Development tax incentives, which the government said will help businesses conduct research.
“Lagging productivity growth is one of the challenges we face,” Samson said.
“Certainly, things like the tax incentives that they’ve implemented should make a difference there, encouraging businesses to make those investments in equipment and technology that will improve their productivity and Canada’s productivity.”
She added that the productivity super-deduction includes measures for “immediate expensing of productivity-enhancing assets,” such as patents and data network infrastructure.
“Those types of things have the potential to improve the productivity of businesses. We know businesses are not investing enough in Canada in those types of things. Hopefully, this is enough to tip the balance and have those businesses invest,” she said.
Mahmood Nanji, a policy fellow at the Ivey Business School and a former associate deputy minister at the Ontario Ministry of Finance, said the government’s strategy is anchored around growing the economy to offset various shocks, like tariffs, a slowing global economy and Canada’s sluggish growth.
“It is an investment-led budget and the government is definitely making a big bet on these investments catalyzing private investment and other institutional investment as well,” he said.
This report by The Canadian Press was first published Nov. 6, 2025.
Daniel Johnson, The Canadian Press
