Canada’s Budget Deficit Widens to C$3.34 Billion in First Quarter of 2025/26
Canada reported a budget deficit of C$3.34 billion ($2.42 billion) in the first three months of the 2025/26 fiscal year, as government spending grew faster than revenues, the finance ministry announced on Friday.
A year earlier, the deficit for the same period stood at C$2.88 billion, according to the ministry’s statement.
Program expenses increased by 4.6%, driven mainly by higher transfers to individuals and provinces. Public debt charges fell 0.6% due to lower interest rates on treasury bills. However, this was partly offset by higher effective rates on a growing stock of marketable bonds.
On the revenue side, collections rose 2.9%, supported by higher personal income tax receipts, stronger revenues from other taxes, and increased custom import duties. Import-related duties surged 183%, reaching C$3.57 billion, largely due to counter-tariffs on U.S. imports.
For June alone, Canada recorded a budget surplus of C$3.63 billion, compared with a surplus of C$939 million in June 2024.
