Here are five developments shaping Ottawa and the National Capital Region today, with context on why they matter.
Budget keeps public service cuts on track, bets $1B on digital overhaul
Budget 2026 does not announce new public service job cuts, but the government says it remains on track to shrink the federal public service by 10 per cent by 2029, CTV News Ottawa reports. Treasury Board figures cited in the budget show the public service fell from a 2023-24 peak of about 368,000 employees to about 332,000 as of August 2026. The budget sets aside roughly $1 billion over five years for a Government Transformation Fund and confirms a new organization, Digital Transformation Canada, to lead AI adoption by bringing together groups including Shared Services Canada and the Canadian Digital Service. Departmental operating budgets will also be reduced by $400 million over four years starting in 2027-28, tied to savings from early retirements. For Ottawa-Gatineau, the message is that workforce reductions already underway will continue while more federal work shifts toward AI and digital tools. Sources: CTV News Ottawa via CP24 and Budget 2026, Chapter 6.
Budget 2026 projects $62.3B deficit and no path to balance
Finance Minister François-Philippe Champagne tabled Budget 2026 on Thursday, proposing $142.1 billion in new tax incentives, spending and other measures over five years, CTV News reports. This year’s deficit is projected at $62.3 billion, about $3 billion lower than April’s spring update, with deficits above $50 billion forecast in each of the next four years. The largest new measure is a roughly $36-billion productivity deduction that lets businesses write off new investments such as equipment, and the budget proposes $11.2 billion toward ending homelessness within a decade. Debt charges are expected to reach $60.2 billion this year, more than the $57.4 billion budgeted for health transfers to the provinces. Carney is scheduled to be in Winnipeg on Friday to promote the homelessness measures, The Canadian Press reports. With about 12 cents of every tax dollar projected to go to debt servicing by 2030, interest costs will increasingly compete with other priorities. Sources: CTV News via CP24, The Canadian Press via Lethbridge Herald and The Canadian Press (In the news today).
Defence plan stops at 2030, leaving NATO’s 2035 target unclear
The budget says Canada will reach defence spending equal to about 4 per cent of GDP by 2030, but its projections end there, leaving open how Ottawa will meet NATO’s commitment of 5 per cent by 2035, The Canadian Press reports. Core defence spending is expected to reach 2.6 per cent of GDP by 2030, about $99 billion, up from $43.9 billion in 2024. Former parliamentary budget officer Kevin Page warned that stopping the projections at 2030 is not transparent, while Carney has argued a full long-term plan would quickly become outdated. The budget includes $7.6 billion to extend Canada’s deployment in Latvia and $2.3 billion for a Defence Drone Initiative, and Global News reports CSIS will receive $6 billion over 10 years starting in 2027. Major purchases under negotiation, including up to 12 submarines, have no funding set out yet, so the full cost of Canada’s military buildup remains unknown. Sources: The Canadian Press via CP24 and Global News.
Immigration targets held as up to 200,000 temporary residents offered PR
The updated immigration levels plan released with the budget keeps permanent resident admissions at 380,000 a year for 2027 to 2029 and sets temporary resident arrivals at 370,000 a year, Global News reports. The plan also offers permanent status to up to 200,000 temporary residents already in Canada by the end of 2027, with half to be considered through Express Entry or the Provincial Nominee Program. The budget sets aside $302.3 million to support those transitions and $151.5 million over five years for Temporary Foreign Worker Program reforms, though it gives few details on those reforms. The Canadian Press describes the approach as keeping broad targets steady while shifting more longtime temporary residents to permanent status. For employers and newcomers, the plan points to stable overall numbers with more emphasis on people already living and working in Canada. Sources: Global News and The Canadian Press via CTV News.
National museums to be free year-round for Canadians under 25
Budget 2026 proposes to make admission to Canada’s national museums permanently free, year-round, for people under 25, at a cost of $46.3 million over five years starting in 2026-27 and $11.5 million a year after that. Several of the institutions involved are in Ottawa-Gatineau, including the Canadian Museum of History, the Canadian Museum of Nature, the National Gallery of Canada and the Canada Science and Technology Museum, CBC News reports. The budget also proposes $783.1 million over five years for national museums, the National Arts Centre and Library and Archives Canada, plus $60 million over four years for the National Gallery. The Canada Strong Pass, which offers free or discounted access to parks, museums and rail travel, would be renewed for another summer at a cost of $76 million. These measures are proposals that still need to be enacted, but they would put significant new money into the capital’s major cultural institutions. Sources: CBC News via Yahoo News Canada and Budget 2026, Chapter 4.
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