Canada recorded a C$7.79 billion ($5.59 billion) budget deficit for the first four months of the 2025/26 fiscal year, slightly higher than the C$7.30 billion shortfall in the same period last year, according to a statement from the finance ministry on Friday.
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The increase in the deficit was primarily driven by a 3.0% rise in program expenses, with growth seen across all major spending categories. Meanwhile, public debt charges declined by 0.7%, largely due to lower interest rates.
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Government revenues rose 1.6% year-to-date, boosted by higher custom import duties—which surged 162.4% to C$4.66 billion from April through July—along with gains in corporate and personal income tax receipts.
For the month of July alone, the federal government posted a C$1.51 billion deficit, a notable improvement from the C$4.41 billion deficit recorded in July 2024.
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