Key insights
- Canada's widening budget deficit, driven by rising government expenditures outpacing revenue growth, could exert slight downward pressure on US equities. Increased Canadian government borrowing might lead to marginally higher global interest rates, indirectly impacting US corporate borrowing costs and potentially dampening economic activity.
OTTAWA, April 24 (Reuters) - Canada recorded a higher C$25.55 billion ($18.66 billion) budget deficit for the first 11 months of the 2025/26 fiscal year as government expenditures grew faster than revenues, the finance ministry said on Friday.
By comparison, the deficit in the same period a year earlier had been C$19.27 billion, it said in a statement.
Program expenses rose 2.1% on increases across almost all major categories of spending. Public debt charges shrank slightly by 0.1% reflecting the impact of lower interest rates on treasury bills and other instruments. This was partly offset by higher average effective interest rates on an increased stock of marketable bonds, the ministry said.
Year-to-date revenues grew by 0.8%, largely reflecting higher income from custom import duties and corporate and personal income tax revenues.
On a monthly basis, Canada posted a surplus of C$5.66 billion in February, compared to a C$7.57 billion surplus in February 2025.
($1 = 1.3695 Canadian dollars)