FX.co ★ Canada Government Budget Deficit Widens in September

In September 2025, the Canadian government recorded a budget deficit of CAD 5.0 billion, marking an increase from the CAD 3.2 billion deficit in September of the previous year. This change was mainly due to a CAD 0.9 billion (or 2.5%) increase in revenue, spurred by higher collections from corporate and personal income taxes as well as customs import duties. Conversely, revenue from pollution pricing fell by CAD 0.9 billion due to the discontinuation of the federal fuel charge. Excluding net actuarial gains and losses, program expenses rose by CAD 1.6 billion (or 4.6%). This was attributable to increased direct program expenses, substantial transfers to individuals, and allocations to provinces, territories, and municipalities. On the other hand, public debt charges decreased by CAD 0.4 billion, a decline of 8.3%, as reductions in treasury bill rates and lower interest on pension obligations offset the impact of higher average rates on an increased volume of marketable bonds. Between April and September for the fiscal year 2025–26, the federal deficit amounted to CAD 16.1 billion, rising from the CAD 13.0 billion deficit recorded during the same period the previous year.