On March 27, the finance ministry reported that Canada ran a C$31.21 billion budget deficit over the first ten months of the 2025/26 fiscal year, reflecting an increase in the shortfall compared with C$26.85 billion recorded in the same period a year earlier.
The ministry attributed the larger deficit to government expenditures rising faster than revenues. Program expenses were up 2.6%, with increases recorded across all major categories of spending.
Public debt charges showed a small overall decline of 0.3%. The ministry said this reduction reflected the impact of lower interest rates on treasury bills and other short-term instruments. That effect was partly offset by higher average effective interest rates on an increased stock of marketable bonds, leaving the net change in debt servicing costs marginally negative.
On the revenue side, year-to-date receipts rose 1.6%. The growth in revenues was concentrated in higher income from customs import duties together with increased corporate and personal income tax revenues, according to the ministry's statement.
Looking at the monthly flow, January produced a deficit of C$5.07 billion, slightly smaller than the C$5.13 billion shortfall posted in January 2025. The finance ministry presented these figures as part of its routine fiscal reporting for the current fiscal year. (Exchange rate used: $1 = 1.3855 Canadian dollars.)
Contextual note - The reported figures combine movements in program spending, debt servicing costs and revenues to produce the overall year-to-date deficit. Within those components, short-term interest-rate movements and shifts in the stock of marketable bonds had offsetting effects on public debt charges, while customs duties and tax collections were the primary contributors to revenue growth.
This account reflects the information made available by the finance ministry regarding the first ten months of fiscal 2025/26 and the comparative monthly result for January.