2026.03.2716:22:03UTC+00Canada Government Budget Deficit Marginally Shrinks in January

Canada’s federal government posted a budget deficit of CAD 5.07 billion in January 2026, slightly narrower than the CAD 5.13 billion shortfall recorded in January 2025, as expenditures continued to outpace revenues and widen the fiscal gap. The result reflected a 1.6% year-to-date increase in revenues, supported by higher proceeds from customs import duties as well as corporate and personal income taxes. Program expenses rose 2.6%, with increases across all major spending categories, while public debt charges edged down 0.3%. The decline in debt charges was driven by lower interest rates on treasury bills and other short-term instruments, which more than offset the impact of higher average effective interest rates on a larger stock of marketable bonds. Over the April to January 2025–26 period, the federal deficit reached CAD 31.21 billion, up from CAD 26.85 billion in the same period a year earlier.