Canada Government Budget Deficit Widens in September

Canada’s government posted a budget deficit of CAD 5.0 billion in September 2025, compared with a deficit of CAD 3.2 billion in September 2024. This shift largely reflected a CAD 0.9 billion (2.5%) increase in revenues, driven by higher corporate and personal income tax and customs import duties, while pollution pricing fell by CAD 0.9 billion following the cessation of the federal fuel charge. Program expenses, excluding net actuarial losses and gains, rose by CAD 1.6 billion (4.6%), reflecting higher direct program expenses, major transfers to persons, and transfers to provinces, territories, and municipalities. Public debt charges fell CAD 0.4 billion or 8.3% as lower rates on treasury bills and reduced interest on pension obligations outweighed higher average rates on a larger stock of marketable bonds. For the April to September 2025–26 window the federal deficit reached CAD 16.1 billion, up from CAD 13.0 billion in the same period a year earlier.

Canada’s government posted a budget deficit of CAD 3.28 billion in August 2025, compared with a deficit of CAD 2.5 billion in August 2024. This shift largely reflected a CAD 2.3 billion (6.5%) increase in revenues, driven by higher corporate and personal income tax and customs import duties, while pollution pricing fell by CAD 0.9 billion following the cessation of the federal fuel charge. Program expenses, excluding net actuarial losses, rose by CAD 3.0 billion (9.1%), reflecting higher direct program expenses, major transfers to persons, and transfers to provinces, territories, and municipalities. Public debt charges fell by CAD 0.1 billion (1.5%) as lower interest rates on treasury bills and reduced net interest on cross-currency swaps were largely offset by higher average effective rates on an increased stock of marketable bonds; for the April–August 2025–26 period, the federal budget deficit stood at CAD 11.1 billion, compared to CAD 9.8 billion in the same period of 2024–25.

Canada’s government posted a budget deficit of CAD 1.5 billion in July 2025, compared with a deficit of CAD 4.4 billion in July 2024. This shift largely reflected a CAD 2.2 billion (5.3%) increase in revenues, largely driven by higher corporate income tax, while pollution pricing proceeds fell by CAD 0.9 billion. Program expenses, excluding net actuarial losses, fell by CAD 0.4 billion (1.0%), reflecting the wind-down of the Canada Carbon Rebate for individuals that was mostly offset by higher direct program expenses. Public debt charges fell by CAD 0.035 billion (0.7%) as lower interest rates on treasury bills largely offset higher average effective rates on an increased stock of marketable bonds; for the April–July 2025–26 period, the federal budget deficit stood at CAD 7.8 billion, compared to CAD 7.3 billion in the same period of 2024–25.