OTTAWA — The Government of Canada reported a notable deficit of $26.4 billion for the initial eight months of the 2025-26 fiscal year. This figure represents an increase compared to the deficit of $22.7 billion recorded during the same period, from April to November, of the previous year.
According to the fiscal monitor released by the Finance Department, total revenue for this period amounted to $317.2 billion. This reflects an increase from $311.3 billion in the corresponding period a year prior. The rise in revenue has been attributed to higher customs import duties that resulted from countermeasures implemented in response to tariffs imposed by the United States. Additionally, there was an increase in both corporate and personal income tax revenues, contributing to the overall growth in revenue.
On the expenditure side, program expenses, excluding net actuarial losses, reached $304 billion. This figure represents an increase from $294.9 billion in the previous year, driven by higher direct program expenses and significant transfers made to individuals, provinces, territories, and municipalities. Such transfers play a crucial role in underpinning social support systems and local government funding within the country.
The public debt charges for this period were reported to be $36.3 billion, slightly decreased from $36.4 billion in the same timeframe last year. The reduction in debt charges is primarily attributed to lower short-term interest rates on treasury bills, alongside decreased net interest related to cross-currency swap transactions and other liabilities. This decline in debt servicing costs can provide the government with more flexibility in allocating funds to other pressing areas of need.
Furthermore, net actuarial losses totaled $3.3 billion, an increase from $2.7 billion the previous year. These losses reflect the changes in the valuation of liabilities, often influenced by fluctuations in interest rates and demographic assumptions impacting public sector pension plans and other long-term obligations.
This financial snapshot, released by The Canadian Press, provides insight into the fiscal health of the Canadian government as it navigates through economic pressures and revenue challenges in a fluctuating global market. The report, published on January 30, 2026, sheds light on the current fiscal landscape, highlighting the importance of careful financial management as the government seeks to balance its obligations while stimulating economic growth.
The increasing deficit underscores ongoing challenges in maintaining fiscal sustainability. As revenues rise and expenditures grow, particularly in social spending, policymakers face critical decisions about future budgetary priorities and the overall direction of fiscal policy.
