Canada Budget Surplus Narrows in June

Canada’s federal surplus narrowed to C$1.0 billion in June 2026 from C$3.6 billion a year earlier, on higher program expenses and public debt charges and broadly stable revenues. Program expenses excluding net actuarial losses increased by C$2.1 billion, largely due to higher direct program spending, while public debt charges rose C$0.5 billion amid a larger stock of marketable bonds and higher CPI adjustments on Real Return Bonds. Net actuarial losses increased by C$0.1 billion. Revenues were up C$10 million to C$1.6 billion, as higher employment insurance premiums and other revenues offset a C$1.6 billion decline in tax revenues, mainly due to lower corporate income tax receipts.

Canada's federal budget deficit narrowed to CAD 0.31 billion in May 2026 from CAD 2.2 billion in the same month a year earlier. Revenues increased 12.6% year-on-year to CAD 41.94 billion, driven primarily by higher income and excise tax receipts. Meanwhile, program expenses, excluding net actuarial losses, rose 6.2% to CAD 36.68 billion, reflecting higher direct program spending and larger transfers to persons, partly offset by lower transfers to provinces, territories and municipalities. Public debt charges increased 12.7% to CAD 5.16 billion due to higher effective interest rates on a larger stock of marketable bonds. Net actuarial losses rose 23.9% to CAD 415 million, remaining unchanged from the previous month. The budgetary deficit before net actuarial losses was CAD 0.1 billion, compared to a deficit of CAD 1.86 billion in the same period a year earlier.

Canada’s federal budget deficit expanded to CAD 29.7 billion in March 2026, up from CAD 23.9 billion in the same month a year earlier. The budgetary deficit before net actuarial losses, excluding the impact of amortizing pension and employee benefit plan revaluations, narrowed to CAD 20.6 billion from CAD 23.5 billion in March 2025. Net actuarial losses surged by 240.7%, primarily due to the accelerated amortization of losses from amendments to employee future benefit plans in 2025-26. Meanwhile, program expenses excluding actuarial losses fell by 1.9%, driven by lower direct costs following savings from benefit plan amendments announced in Budget 2025. Revenues increased by 1.1%, supported by higher personal and corporate income tax receipts, other revenues, and customs import duties tied to countermeasures against US tariffs.