2nd Carney Budget to Tackle Tax Reform 'One Bite at a Time'

For investors and market strategists, Canada's tax competitiveness is no longer a back-burner issue. Secretary of State Wayne Long's confirmation that small business changes are high on the fall 2026 budget agenda suggests Ottawa is finally pairing tariff-shock recovery with structural reform language — and, crucially, telling a nameless major international investor to wait no longer.

Canadian officials have confirmed that long-promised tax code reform will proceed incrementally, and the first concrete target appears to be the pain felt by small businesses. Wayne Long, MP for Saint John—Kennebecasis and Secretary of State for the Canada Revenue Agency and financial institutions, told The Canadian Press on Friday that Ottawa plans to tackle reform "one bite at a time" and that changes for small businesses are "high on the priority list." The comments land as Liberal MPs, alongside Finance Minister François-Philippe Champagne, fan out across Canada for pre-budget consultations ahead of the fall 2026 budget. Long describes that upcoming fiscal blueprint as "chapter two" of the Carney government's effort to attract investment and set the country up for growth after the seismic shock of the U.S. tariff campaign.

The backdrop is not simply domestic tax policy but Canada's broader investment competitiveness in a period of heightened economic pressure. Long was candid about the public's relationship with the tax code: "When you say the word tax code to people, everybody rolls their eyes. Everybody's like, 'Oh, the tax code used to be one book thick, now it's two books thick. We just keep piling on.'" He answered his own rhetorical question about whether a total review is needed with an emphatic "Absolutely." The Canadian Press reports that tax experts and advocates interviewed in recent weeks all agreed that major reform to simplify and improve Canada's tax system is long overdue. That rare consensus among practitioners may give the government political cover to move, but it also raises expectations that the fall budget will deliver more than rhetoric.

The most striking market-relevant detail is Long's account of an unnamed "major international player" that wants to put more of its money into Canada but is waiting for Ottawa to change its tax code and how it governs investments. "Sometimes we hear that other jurisdictions are just more user-friendly than we are. So it's something that we're focused on," Long said. "We need to be super aggressive. We need to bring down barriers so that major international players can look at us and say it is more than worth investing in Canada, spending our money in Canada." For investors, this is a clear signal that the fall 2026 budget will be read not only for specific tax measures but as a barometer of Ottawa's commitment to improving the ease and attractiveness of capital deployment in Canada.