Michael Litt

Budget 2026 is a budget for builders. Build Canada welcomes Budget 2026 as the first federal budget in over a decade to recognize and reward entrepreneurship as a key driver of economic growth. The government has adopted the core elements of tax reforms widely recommended by builders and entrepreneurs across Canada, while also beginning to take measures to improve competitiveness and government efficiency. This budget changes the math for founders and early employees. A Canadian who sells a company and starts the next one now has more reason to do it here. That is how a country creates a strong innovation ecosystem and gets a generation of repeat builders to stay and build here. What we welcome: 1. Measures to incentivize and reward entrepreneurship, including: > The Canada Growth Incentive, a new tax exemption on up to $15 million in capital gains earned from successful eligible investments for Canadian builders. > The enhancement of the small business rollover to allow increased deferral of taxes on capital gains when proceeds are reinvested in another Canadian small business. > The expansion of the SR&ED tax incentive program to include certain commercialisation expenses. 2. Measures to increase competition, including: > The Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction. > Efforts to make it easier for consumers to switch providers by expanding data portability rights to additional sectors, including telecommunications and air transportation. > Strengthening Competition Bureau investigations. 3. Measures to improve government efficiency, including: > The establishment of Digital Transformation Canada to lead the adoption of AI across the public service. > The establishment of a Fellowship Program through Build Canada Exchange to recruit outside expertise to support priority projects. > The Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction to put Canada’s long-term competitiveness at the centre of how federal regulation is developed. > Efforts to streamline the delivery of federal financing. What still needs work: > Public debt. The budget projects a deficit of $65.3 billion for FY 2026-27 and debt-to-GDP of 39.9% rising to 40.1% by 2030-31. Public debt charges are $60.2 billion for FY 2026-27 and will reach $85.5 billion by 2030-31 — more than Ottawa will spend on the Canada Health Transfer and the fastest growing budget line item. While some may argue there is fiscal room to absorb this, long term interest rates are unpredictable and our fiscal position would be more resilient with a reduced deficit. > Old Age Security reform. OAS costs are pojected at $89.4 billion this year and still leaves 400,000 seniors in poverty. Moving the recovery threshold to $100,000 of household income would save $15-16 billion a year and end seniors' poverty with $2 billion of it. The budget leaves this untouched. > More aggressive tax reform. A comprehensive review of the tax system is needed to further identify ways to simplify our tax code for individuals and businesses.

We are launching Quilt Tools, a permanent home for partner-facing tooling featuring the most advanced remote diagnostics platform ever made for residential HVAC. I talk internally about Quilt’s 3 Superpowers and this launch today ties all 3 together beautifully: *Superpower 1, Physical AI*. Every Quilt system has 10x as many sensors and 500x more computing power than the closest competitor. That data, that only Quilt has, and the ability to do sophisticated computation on it like system performance prediction and thermal modelling, is what makes this possible. It’s how we predict precisely when a system is going to break or tell an installer that they accidentally crossed wires or that they oversized an install. And the data is bidirectional – not only can our partners remotely understand the system, they often can remotely *fix* it as well. You’ve seen this capability in our OTAs that increase system capacity. This launch greatly expands those capabilities. The result is faster installations, fewer callbacks, and more comfortable homes – which saves money for both homeowners and partners. *Superpower 2, Product*. Quilt is at its core a product company. We care a *lot* about great user-centric design, thoughtful execution, and quality. Quilt is staffed by people who have built some of the most used and loved software platforms in the world. We have taken all that experience to create a top tier enterprise software platform in a space that had never received this level of TLC. Wait, did I just say we are launching an enterprise SaaS platform in 2026?? Yes – because what makes it powerful and unique is our fleet of connected systems and the data it produces, which no amount of token spend can ever reproduce. Coding Agents have greatly *deepened* our ability to produce a great product with unique and defensible value here, not reduced it. *Superpower 3, Partner Network*. Our channel partners and distribution network are our third superpower. Through them we have thousands of people in the field selling and installing Quilt every day. These are many of the best home services companies in North America. They are the face of Quilt and we hold just as high of a bar for partner performance and success as we do for our homeowner experience and products. And that’s 100% the focus of this launch – give our *partners* superpowers. We only succeed when they succeed and we want to give them every possible advantage to delight customers, grow their business, and accelerate heat pump adoption. Big thanks to all our design partners who provided early feedback and are already using Quilt Tools in their daily work – this is for you. Hear from one of them, ARS Blueflame in Seattle, in my first reply below.

Today we’re releasing Waypoint-1.5. An update to our real-time diffusion world model designed to run interactively on consumer hardware.

After hearing feedback from Canadian founders in our network, we’ve decided to add Canada back to our list of accepted countries of incorporation. Going forward, YC will once again invest in US, Canada, Cayman, and Singapore corporations. ycombinator.com/blog/adding-…

I’m moving from NYC to Waterloo, Canada to build @akatoshouse. There’s something special happening in Waterloo. I have a theory: it has always been an excellent engineering school, but social media + AI have greatly lowered the barrier to entry for entrepreneurship. The best founders skip the need for corporate credentials to "prove themselves" and just build. At last year’s @socraticainfo Symposium, I saw people tackling problems with a depth and scope that wouldn't have been possible without LLMs. Add the community’s work ethic and intellectual curiosity, Canadian humility, and the collection of supportive and empathetic individuals around the university and its alumni... If there ever was a place that could hold a candle to San Francisco’s bonfire, with its constant, rotating pipeline of interns and co-ops bringing back SF's "prove-it" culture, it would be Waterloo. So yeah, that’s why I’m moving. I’m betting that the builder community want a permanent place to call home, a place to belong. Here’s to hoping that we'll be the crazy ones.

BuildCanada.com is live. @buildcanada helps entrepreneurs share their ideas for a bolder, richer, freer country.

Great lesson from 🇳🇴 🇨🇦 politicians should study this carefully. Celebrate success, don’t punish it.

remember to always have fun

Shopify CEO @tobi Lütke says Canada must overcome “go-for-bronze” culture at BetaKit Town Hall #BKtownhall betakit.com/shopify-ceo-says…