Canada recorded a fiscal deficit of C$26.14 billion for the first nine months of the 2025/26 fiscal year as government expenditures grew faster than revenues, the finance ministry reported. For the same period a year earlier the deficit stood at C$21.72 billion, indicating a wider shortfall year-to-date.
Program expenses climbed 3.5%, with increases reported across all major categories of spending. At the same time, public debt charges decreased by 0.6% - a change the ministry attributed to lower interest rates on treasury bills and on cross-currency swap transactions and other liabilities.
On the revenue side, year-to-date receipts were up 2.2%, primarily reflecting higher income from customs import duties as well as increased corporate and personal income tax revenues. Despite the wider cumulative deficit, on a monthly basis Canada posted a modest surplus in December of C$245 million, down from a December 2024 surplus of C$1 billion.
The finance ministry's breakdown highlights two contrasting fiscal trends during the reporting period: rising program spending across broad categories and a slight easing in debt service costs driven by short-term interest rate movements. Revenues grew modestly but not at a pace sufficient to offset the rise in program expenses, resulting in a larger nine-month gap compared with the prior year.
Key numerical points remain: a C$26.14 billion budget deficit through nine months of the 2025/26 fiscal year; program expenses rising 3.5%; public debt charges falling 0.6%; and year-to-date revenues increasing 2.2%. The monthly figures show a December surplus of C$245 million versus a C$1 billion surplus in December 2024. The finance ministry provided these figures using the prevailing exchange reference of $1 = 1.3651 Canadian dollars.
Summary
The Canadian government ran a C$26.14 billion deficit over the first nine months of 2025/26 as spending growth outpaced revenue gains. Program expenses rose across all major categories, public debt charges fell slightly due to lower short-term rates, and year-to-date revenues were buoyed by customs import duties and higher corporate and personal income tax receipts. December produced a small surplus of C$245 million.