Canada Government Budget Deficit Marginally Shrinks in January

Canada’s government recorded a federal budget deficit of CAD 5.07 billion in January 2026 compared with a deficit of CAD 5.13 billion in January 2025 as government expenditures outstripping revenues continued to widen the fiscal gap. This result reflected a 1.6% year-to-date increase in revenues driven by higher income from custom import duties and corporate and personal income tax revenues. Program expenses rose 2.6% on increases across all major categories of spending while public debt charges marginally shrank by 0.3% as lower interest rates on treasury bills and other instruments outweighed higher average effective interest rates on an increased stock of marketable bonds. For the April to January 2025-26 window the federal deficit reached CAD 31.21 billion up from CAD 26.85 billion in the same period a year earlier.

Canada’s government posted a budget surplus of CAD 0.2 billion in December 2025, compared with a surplus of CAD 1.0 billion in December 2024. This shift reflected a CAD 1.8 billion increase in revenues, driven by higher corporate and personal income tax revenues, while lower pollution pricing provided partial offsets. Program expenses, excluding net actuarial losses, rose by CAD 2.6 billion, reflecting higher direct program expenses, major transfers to provinces, and pollution pricing proceeds returned. Public debt charges fell CAD 0.2 billion as lower interest rates on treasury bills and lower CPI adjustments on Real Return Bonds outweighed higher effective interest rates on an increased stock of marketable bonds. For the April to December 2025–26 window, the federal deficit reached CAD 26.1 billion, up from CAD 21.7 billion in the same period a year earlier.

Canada’s government posted a budget deficit of CAD 8.0 billion in November 2025, compared with a deficit of CAD 8.2 billion in November 2024. This shift reflected a CAD 0.4 billion decrease in revenues, driven by lower pollution pricing and GST, while income tax provided partial offsets. Program expenses, excluding net actuarial losses, fell by CAD 1.1 billion, reflecting lower pollution pricing proceeds returned and lower direct program expenses, partly offset by higher major transfers to persons and provinces. Public debt charges rose CAD 0.4 billion as higher CPI adjustments on Real Return Bonds and higher average interest rates on marketable bonds outweighed lower rates on treasury bills. For the April to November 2025–26 window, the federal deficit reached CAD 26.4 billion, up from CAD 22.7 billion in the same period a year earlier.