Canada’s budget deficit narrowed to C$370 million ($266.57 million) in the first quarter of the 2026/27 fiscal year, a significant improvement from a C$6.28 billion shortfall during the same period a year earlier, the finance ministry reported on Friday.
Program expenses increased 4.3% year-over-year, driven by broad-based rises across most spending categories. Public debt rose 6.1%, reflecting higher average effective interest rates on marketable bonds and inflation adjustments, though this was partly offset by lower short-term treasury bill rates. Year-to-date revenues grew 9.8%, primarily due to higher personal and corporate income tax receipts as well as increased goods and services tax collections.
In June alone, Canada posted a C$989 million surplus, compared with a C$3.63 billion surplus in June 2025. The exchange rate used for reporting was $1 = 1.3880 Canadian dollars.
