FX.co ★ Canada Government Budget Swings to Deficit in May

In May 2025, the Canadian government reported a budget deficit of CAD 0.23 billion, contrasting with a budget surplus of CAD 1.172 billion recorded in May 2024. This change was mainly due to a CAD 26 million (0.0%) rise in revenues. The boost from elevated customs import duties and pollution pricing proceeds was counterbalanced by decreased collections from corporate income taxes and the Goods and Services Tax. Meanwhile, program expenses, excluding net actuarial losses, increased by CAD 2.6 billion (8.3%), with most major spending areas experiencing growth. Public debt charges decreased by CAD 0.2 billion (5.0%), as lower interest rates on treasury bills more than offset the higher Consumer Price Index adjustments on Real Return Bonds. Looking at the fiscal year so far, for the first two months of 2025–26 (April to May), the federal budget deficit was CAD 5.8 billion, compared to CAD 2.6 billion for the same period in 2024–25.