Canada’s Budget 2026:
What It Means for Canadian Cleantech

On November 5, the federal government tabled Canada Budget 2026, Prime Minister Mark Carney’s second budget. For Canadian cleantech, the clearest message is one of continuity. The investment framework set out in Budget 2025 remains in place, and in several areas it has been extended.

Last year, we explored what Budget 2025 meant for clean growth. This year, the question for the cleantech ecosystem has slightly evolved.

Canada now has a long-term set of incentives for cleantech. The challenge is turning those incentives into adoption.

The most significant measure is the proposed extension of the Clean Technology and Clean Electricity investment tax credits to the end of 2040. Under the current rules, the Clean Technology credit would have dropped to 15% in 2034 before ending. For capital-intensive projects with long development timelines, this added certainty is meaningful, and it helps keep Canada globally competitive for clean investment. Companies and investors can now plan well beyond the end of the decade.

The budget also proposes to expand the Clean Electricity credit to include the highest-voltage transmission lines within each province. In addition, the government will consult on a domestic content bonus for projects that use Canadian industrial products. The design of that bonus will be particularly important for Canadian companies in manufacturing, and it is worth watching closely over the 60-day consultation period.

The budget treats electricity as a core economic priority. It describes more than $50 billion in measures to “power Canada Strong,” tied to a national strategy to double the capacity of Canada’s grid by 2050. Much of that figure reflects the extended tax credits, alongside nearly $4 billion over 10 years, starting in fiscal year 2027-28, for grid infrastructure, renewables, and priority electricity projects. This includes new funding for the Smart Renewables and Electrification Pathways Program.

Building supply is only half of the equation. New clean power drives economic growth when businesses and households actually use it, through industrial electrification, efficient equipment, and EV charging. The proposed federal investments point directly to that demand side: $587 million to fund more than 55,000 chargers through the renewed Zero-Emission Vehicle Infrastructure Program, alongside $45 million dedicated to Canadian EV charging R&D. For Canadian cleantech, the opportunity sits on both sides of the meter.

The budget makes it clear that Canada’s long-term prosperity depends on higher productivity, and that the country still has considerable ground to make up relative to its peers. Clean technology is part of the answer. According to Statistics Canada, high green-intensity industries were, on average, 51.7% more productive per worker than low-intensity industries between 2016 and 2022. Clean technology is not only an emissions decision. It is increasingly a productivity decision. 

In practice, this often shows up on the bottom line. At Foresight, we see this time and time again, across the ventures we support and the industries adopting their solutions.

Technologies that cut energy use, water consumption, or waste also tend to cut operating costs. 

Across the sectors we work in, the pattern is consistent. Market-ready clean technologies exist, but industrial adoption remains slow. Industry is understandably risk-averse, projects are capital-intensive, and first commercial deployments are difficult to secure.

Several measures in Budget 2026 speak directly to this gap. SHIFT, a renewal of the Green Industrial Facilities and Manufacturing Program, would provide $400 million over seven years to de-risk energy-saving technology at industrial facilities, including SMEs. The NRC IRAP Clean Technology initiative, a critical source of support for many of the ventures we work with, would be renewed at $298 million. SR&ED would also expand to cover commercialization costs such as regulatory approvals, certifications, and IP protection, and the Productivity Mega Deduction would let businesses immediately write off about two-thirds of capital assets, including equipment and software.

The budget also targets the people building these companies. The new Canada Growth Incentive would exempt up to $15 million in capital gains, per individual, per business, on eligible shares of Canadian-controlled private corporations held for at least 36 months, covering founders, early employees, and angel investors. An enhanced rollover would give investors the year of sale plus three years, or up to five with a SAFE, to reinvest in another Canadian small business.

It is also of note that the budget places significant weight on natural resources. It proposes more than $6 billion in forestry measures, including $2 billion through Natural Resources Canada for modernization and demonstration projects, as well as the renewal of the Critical Minerals Strategy. In these sectors, which typically involve major projects, cleantech adoption directly underpins productivity and long-term competitiveness.