Overview

• Canada’s 2025/26 fiscal shortfall reached C$6.50 billion in April and May, compared with C$3.82 billion a year earlier.
• Program expenses rose 4% across all major categories, becoming the largest driver of the widened deficit.
• Public debt charges climbed 3.8% as higher government bond yields increased borrowing costs.
• Year-to-date revenues edged up by C$26 million, with declines in corporate and GST receipts mostly offset by higher personal income tax and import duty collections.
• Customs import duties jumped 180% on counter-tariffs against U.S. goods, but these gains were insufficient to reverse overall revenue weakness.