CCI's 2026 Federal Budget Debrief for Canadian Tech Leaders

Following the release of the 2026 federal budget, the Council of Canadian Innovators (CCI) hosted its annual debrief on key announcements affecting Canada’s innovation economy.

Patrick Searle, Chief Executive Officer; Laurent Carbonneau, Vice-President, Policy and Advocacy; and Daniel Perry, Director of Federal Affairs, discussed the budget’s implications for Canadian innovators and CCI’s advocacy priorities heading into 2027.

Watch the full recording below.

Key Takeaways from Budget 2026

The 2026 federal budget, Masters of Our Destiny, includes measures affecting investment, commercialization, defence, intellectual property and financial sector competition. Here are CCI’s initial key takeaways:

• Capital Gains: In direct response to our community’s advocacy, the federal government has introduced the Canada Growth Incentive, a new tax exemption on up to $15 million in capital gains from eligible investments and an enhanced small business rollover.
  • This allows for the deferral of taxes on capital gains when gains are reinvested in another Canadian small business that are considered to be high growth.
  • This measure would provide $715 million in tax relief for entrepreneurs and investors over four years, starting in 2027-28.
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• SR&ED Reform: The federal government is implementing reforms to the SR&ED program, answering CCI asks for better support for commercialization through the tax credit program.
  • The federal government will expand the SR&ED tax incentive to cover certain commercialization expenses, including costs associated with bringing new products or processes to market, obtaining regulatory approvals or certifications, and securing and maintaining intellectual property protection.
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• Defence: The federal government will increase defence spending to meet Canada’s NATO targets, with a considerable proportion earmarked for drones and furthering the Defence Industrial Strategy.
  • The budget allocates $2.3 billion to accelerate the discovery, acquisition and deployment of uncrewed and counter-uncrewed capabilities, and $7.6 billion to extend and expand Operation REASSURANCE.
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• Stablecoin: The federal government will require federally regulated financial institutions to issue stablecoins through non-financial institution subsidiaries regulated under the Stablecoin Act and extend the Stablecoin Act to foreign financial institutions. The government will seek input to strengthen consumer protection around stablecoin issuers.
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• Canada Strong Fund: The federal government will provide further clarity on Canada’s first national sovereign wealth fund, with an initial $25 billion federal capital commitment.
  • The Fund will invest only in Canada, on commercial terms, as a minority investor, and at arm’s length from the federal government.
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• Strategic Response Fund. The federal government is putting $1 billion into the Strategic Response Fund for large-scale R&D and innovation projects that strengthen Canada’s long-term competitiveness.
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• IP and Research Commercialization. These are the first measures from the federal government’s IP review, with more to be announced in spring 2027. This includes:
  • Modernizing commercialization policies at the three federal granting councils, and consulting experts on technology transfer capacity at post-secondary institutions;
  • Using the National Research Council’s expertise and assets to expand the impact of its IP;
  • Amending the Patent Act to require changes in patent ownership to be registered with CIPO, reducing due diligence costs and investment risk; and
  • New regulations setting minimum requirements for patent demand letters, to protect Canadian businesses from vague or misleading infringement claims.
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• Artificial Intelligence and Quantum. The federal government is launching Phase 2 of the Canadian Quantum Champions Program.
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• Federal Commercial Assets. The federal government will keep advancing options to commercialize the Canadian Photonics Fabrication Centre and will look at selling non-core federal commercial assets to free up capital for priority projects.
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• Financial Sector Competition. The federal government is making it easier for new entrants, challenger banks and credit unions to compete, including:
  • A maximum one-year statutory timeline for decisions on applications from new entrants.
  • New ministerial guidelines on transitional relief for new entrants, along with expectations that regulators supervise in proportion to an institution’s size and risk.
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• Crown Corporations and Trade Finance. Following a mandate review of the federal financing Crowns, the federal government is consolidating and streamlining the financial Crowns:
  • BDC and EDC will be merged, and there will be further streamlining to eliminate overlap with CDEV, the Canada Infrastructure Bank and other financing Crowns.
  • Making the Canadian Commercial Corporation a subsidiary of EDC, and modernising the Canada Account and the broader trade finance toolkit.
  • Moving administration of the Canada Small Business Financing Program to BDC.

CCI’s View on Budget 2026

As Canada’s 21st-century business council, our job is to advocate for the policies and marketplace frameworks that help innovative companies like yours scale up globally. We evaluate budgets through a lens of innovation policy, and whether governments are making short-term promises or implementing long-term strategies.

For innovators, the news is largely positive. The new Canada Growth Incentive exempts up to $15 million in capital gains from eligible investments in high-growth Canadian businesses, worth $715 million in tax relief over four years. This is a direct response to CCI’s advocacy and to the Bet on Canada campaign many of you have supported.

Digital Transformation Canada (DTC), an office CCI has called for since 2020, now has a clearer mandate, a Government Transformation Fund, and a fellowship program that fits our view of how the government should bring in technical talent.

The budget offers little detail on the strategies that Canada needs to keep control of the sectors and assets most important to its long-term growth. With defence spending set to reach 4% of GDP by 2030, the government has missed a chance to further reform Industrial and Technological Benefits (ITBs) to build up domestic innovators.

In the days and weeks ahead, CCI will continue engaging with government to make sure implementation reflects the realities of scaling Canadian companies.

Read CCI’s full response to the 2026 federal budget.
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About the Council of Canadian Innovators (CCI)

The Council of Canadian Innovators (CCI) is Canada’s business council for the 21st century economy. We are a collective of over 175 of Canada’s fastest-growing and most ambitious companies, and the founders, CEOs, and executives behind them, working together to improve the business conditions that help more homegrown companies scale, compete globally, and drive long-term prosperity. Learn more at canadianinnovators.org.