Canada’s federal government in Ottawa has posted a budget deficit of $18.37 billion for the first seven months of the current fiscal year, up 27% compared to the same period of 2024.
The federal Finance Ministry attributed the rise in the budget deficit to government expenditures, which are growing at a faster clip than revenues.
Program expenses under the Liberal government of Prime Minister Mark Carney rose 4%, reflecting an increase in major transfers to individual people and Canada’s provinces.
At the same time, revenue collected by Ottawa increased a more modest 2.3%, reflecting increases in customs import duties due to countermeasures imposed in response to U.S. tariffs.
Public debt charges dropped by 1.6% in the first seven months of the fiscal year, led by lower short-term interest rates and lower net interest charged on currency swaps.
On a monthly basis, the federal government posted a budget deficit of $2.28 billion in October, up 53% from a shortfall of $1.49 billion recorded in October 2024.
The federal government’s fiscal year runs from April 1 to March 31.
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