Canada's federal deficit nearly halves to C$5.36 billion in first five months of 2026/27

Canada recorded a C$5.36 billion (US$3.84 billion) federal budget deficit for the first five months of the 2026/27 fiscal year, substantially lower than the C$11.07 billion deficit in the same period a year earlier, Reuters reported on 30 October, citing a Finance Ministry statement. The ministry attributed the narrowing gap to government revenues growing faster than expenses.

How revenues and spending moved

Year-to-date revenues grew by 7.1%, largely reflecting higher personal income tax and GST revenues. Program expenses rose 4.7%, driven by higher transfers for government programs and increased operating costs. Public debt increased by 9.1%, which the ministry attributed largely to higher average effective interest rates on an increased stock of marketable bonds.

The monthly figure

On a monthly basis, the deficit dropped sharply to C$233 million in August, compared with a C$3.28 billion deficit in August 2025. The ministry statement as reported gives these totals and growth rates only; it does not publish a full breakdown of the narrowing by individual revenue and spending lines, nor a forecast for the full-year deficit.