Market Update: Policy Matters: How a Business-Friendly Federal Budget Will Bolster Canada’s Economy – Full Analysis

September 9, 2025

The dramatic shakeup in global trade has revealed holes in Canada’s economy that we’ve spent decades patching with exports — but it’s time for long-term fixes.

Some progress has already been made; the recent passing of Bill C-5 is one example. So long as the powers included in the Bill are used responsibly and in full compliance with environmental standards and the rights of Indigenous communities, C-5 has the potential to streamline trade between provinces/territories and get big energy and infrastructure projects built.

But we need more.

The 2026 Federal Budget signals which economic issues will be government priorities — and that’s why it’s critical the Budget is informed by the needs of Canadian businesses. In August, we submitted recommendations on behalf of our members to the Standing Committee on Finance as part of their pre-Budget consultation. In addition to recommendations on trade and international commerce that respond to the moment, we also covered natural resources, talent and immigration, and taxes and investment.

Supply Chains

Trade is built on trust. If Canadian companies can’t get their goods to market, whether because of labour disruptions or infrastructure constraints, we risk losing access to those markets and compromising efforts to diversify our trading relationships. That’s why we asked the government to:

1. Commit to long-term investment in trade through a Canada Trade Infrastructure Plan. We must thoughtfully build and maintain our ports, airports, rails, roads, pipelines and energy grid.
2. Protect supply chains by giving parties and government the tools to resolve labour disputes. The government should amend the Canada Labour Code to provide new dispute resolution tools for all federally regulated trade infrastructure.

For more on our advocacy to keep goods (and our economy) moving, visit our Supply Chains Council page.

Trade diversification

Government may engage in deal making and negotiation, but it’s businesses that engage in trade. Trade diversification efforts will only succeed if businesses of all sizes and regions have meaningful access to alternative foreign markets. That’s why we asked the government to empower the private sector to advance trade diversification and promotion.

At the same time government-led trade initiatives are happening, Canadian business associations, like the Canadian Chamber, are mobilizing stakeholders and partners across borders through independently organized business-oriented missions. Government funding can help these private sector-led missions scale for greater reach and impact.

In a previous Policy Matters, we talked about why Canada’s environmental policy is more problematic than productive. Canada’s natural resources — including oil, gas, critical minerals, lumber, and aluminum — make up nearly 20% of our GDP. We owe more than half of our exports to the U.S. to our natural resources.

To help the sector, there are a few regulations and policies that need to be addressed immediately:

• The Impact Assessment Act (IAA): We need a predictable framework for all major infrastructure projects, beyond those designated as “in the national interest” as in Bill C-5. Without broader policy reform, we risk creating a two-tiered system in which some projects are fast-tracked while others face unnecessary delays.
• The Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations: Supposedly, the regulation doesn’t put a cap on production, except, that’s exactly what it will do according to the Parliamentary Budget Officer. With growing international demand for energy, Canada needs to produce more oil and gas, not less. 
• The “greenwashing” provisions in the Competition Act: While tackling misleading environmental claims is important, the amendment has begun to silence good-faith efforts by businesses to make progress on environmental objectives.

Earlier this year, our Energy Security Council published Canada’s Energy Vision: A Blueprint for Security, Prosperity and National Unity. The report outlines a strategic vision for Canada’s government to ensure we have an affordable, secure and sustainable supply of both conventional and clean energy — not just for ourselves, but for our global partners too.

For even more on our natural resources advocacy, visit the pages of our Critical Minerals Council and Decarbonization and Clean Technology Council.

Strategic immigration

Immigration has traditionally been a core Canadian value and a critical economic driver. However, in the context of significant pressures on housing, infrastructure, and social services, Canadians have lost confidence in our immigration system. The government’s implementation of short-sighted and drastic changes to temporary and permanent immigration policies is impacting businesses across the country and will likely cause significant harm to our economy in the long-term. We need an effective immigration policy that responds to our current and future economic needs. Which is why we put forward the following recommendations:

• Make tech talent development a national priority. The demand for talent and skills continues to evolve in the fields of AI, 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.
• Simplify and streamline current immigration programs. The government must leverage immigration, aligning programs with the skills and labour needs of the future economy. At the same time, the government must place the economic needs of provinces and territories at the forefront of immigrant selection and retention to ensure our system is addresses regional labour needs.

Upskilling and reskilling workers

Canadian employers are struggling to find the workers and skills needed to grow their operations, particularly as the fields of artificial intelligence, robotics, quantum, and cyber security continue to evolve. Which is why we called for federal and provincial and territorial governments to collaboratively create a national workforce strategy. The strategy would be aimed at closing present and emerging skills gaps across critical sectors of the economy. It should also include targeted investments to upskill and reskill workers across demographics, particularly those at high risk of automation and AI-related job transformation.

Curious about what we’re doing on immigration? Visit our new Immigration Council’s webpage.

Taxes and investment may not be the most fun to talk about, but their effective application is extraordinarily important to creating a competitive economic environment that both attracts and retains domestic and international businesses.

Smart taxation

If the government were to reduce business taxes and expenses, firms in Canada would be able to better compete with the lower-cost jurisdictions that are already doing the same. Tax credits for research and development and intellectual property are also great ways to encourage business investment. For example, one of our recommendations is to instigate a patent box regime that provides a preferential tax rate on income derived from intellectual property developed and commercialized in Canada. This would encourage Canadian manufacturers to invest in and retain their IP rather than selling it off to companies in other countries that then make the money commercializing it.

We talked about the benefits of a patent box regime in an op-ed in The Globe and Mail.

More investment

The regulatory environment of a country can either attract or repel business investment. To make Canada’s environment one that attracts investment, we’ve asked that government mandate federal regulators to apply an economic competitiveness lens to regulations. 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.

For the full list of recommendations we provided to the Government of Canada, read our response to the government’s Pre-Budget Consultation 2026.