Canada Government Budget Deficit Shrinks in October

Canada’s government posted a budget deficit of CAD 1.5 billion in July 2025, compared with a deficit of CAD 4.4 billion in July 2024. This shift largely reflected a CAD 2.2 billion (5.3%) increase in revenues, largely driven by higher corporate income tax, while pollution pricing proceeds fell by CAD 0.9 billion. Program expenses, excluding net actuarial losses, fell by CAD 0.4 billion (1.0%), reflecting the wind-down of the Canada Carbon Rebate for individuals that was mostly offset by higher direct program expenses. Public debt charges fell by CAD 0.035 billion (0.7%) as lower interest rates on treasury bills largely offset higher average effective rates on an increased stock of marketable bonds; for the April–July 2025–26 period, the federal budget deficit stood at CAD 7.8 billion, compared to CAD 7.3 billion in the same period of 2024–25.