Canada’s 2025/26 deficit came in at C$66.9bln, below the C$78.3bln Nov forecast.
Canada’s 2025/26 deficit came in at C$66.9bln, below the C$78.3bln Nov forecast. GDP growth trimmed to 1.1% for 2026.
Tariffs seen keeping output 1.6% below pre-tariff path by 2029. Summary: The 2025/26 federal deficit came in at C$66.9 billion, well below the C$78.3 billion forecast from November 2025 Improvement was driven by spending restraint and higher crude oil export revenues Real GDP growth forecast for 2026 cut to 1.1% from 1.2%; 2027 trimmed to 1.9% from 2.0% The ministry warned the economy is not expected to return to its pre-tariff level, remaining about 1.6% below the 2024 autumn outlook by 2029 Deficit forecasts for 2026/27 through 2029/30 left virtually unchanged at C$65.3bln, C$63.1bln, C$57.7bln and C$56.2bln respectively Federal debt-to-GDP ratio for 2025/26 revised down to 41.1% from 42.4% in November, but expected to edge higher to 41.9% by 2028/29 Canada’s federal government posted a smaller budget deficit than expected for the 2025/26 fiscal year and slightly trimmed its growth forecasts, painting a picture of modest fiscal improvement set against a deteriorating economic outlook shaped by US tariffs. The spring economic statement, released by the finance ministry on Tuesday, put the 2025/26 deficit at C$66.9 billion, a significant improvement on the C$78.3 billion shortfall pencilled in during the November 2025 budget.
Officials attributed the better outcome to a combination of spending discipline and higher revenues from crude oil sales, reflecting Canada’s continued reliance on its energy sector as a fiscal backstop. Despite the headline improvement, the statement carried a cautious tone on growth. Real GDP is forecast to expand by just 1.1% in 2026, down from the 1.2% expected in November, and by 1.9% in 2027, trimmed from 2.0%.