OTTAWA — The Canadian federal government has reported a budgetary deficit amounting to $26.14 billion for the period spanning April to December of the 2025-26 fiscal year. This figure marks an increase compared to the deficit of $21.72 billion recorded during the same period in the previous year, reflecting a growing fiscal challenge faced by the government.
According to the monthly fiscal monitor published by the Finance Department, total revenue for the nine-month period reached $363.36 billion, showing an increase from $355.62 billion reported a year earlier. The increase in revenue can be attributed to higher customs import duties. These duties were largely the result of countermeasures implemented in response to tariffs imposed by the United States, alongside rising corporate and personal income tax revenues that contributed to the overall growth in government receipts.
On the expenditure side, program expenses—excluding net actuarial losses—amounted to $344.91 billion for the same period, which is an uptick from $333.20 billion reported in the previous year. The increase in expenditures can be linked to heightened direct program spending as well as significant transfers made to individuals, provinces, territories, and municipalities across Canada. These escalating costs underline the government's ongoing investment in public services and support programs.
Additionally, public debt charges for the federal government totaled $40.86 billion, slightly decreasing from $41.12 billion in the previous year. This reduction in debt servicing costs can be attributed to lower short-term interest rates on treasury bills and a decrease in net interest resulting from cross-currency swap transactions and other liabilities. Such a decrease is beneficial for the government as it alleviates some financial pressures associated with servicing its debt.
However, net actuarial losses saw an increase, totaling $3.74 billion compared to $3.02 billion the year before. This rise indicates a growing concern regarding the government’s long-term liabilities and the potential financial implications that could arise in the future. It highlights the necessity for careful financial management and planning to mitigate risks associated with these liabilities.
This fiscal report sheds light on the financial state of the Canadian government as it navigates economic challenges and pressures. The combination of increasing revenues and escalating expenditures signals a critical juncture, where the government must balance its budgetary goals with the need for investment in essential services. As the fiscal year progresses, stakeholders will be keenly observing how these trends evolve and what actions the government may take to address its fiscal position and respond to ongoing economic conditions.
