Budget 2026 · Fiscal outlook
The fiscal outlook, in context.
Budget 2026 projects a deficit of −$62.3B in 2026-27, narrowing to −$52.9B by 2030-31, with federal debt near 40% of GDP throughout. Revenues are projected higher than in the spring update, driven largely by higher prices, mainly for oil, which offsets much of the cost of the new measures.
How the deficit changed since the spring
Economic and fiscal developments improved the balance by $21.5B in 2026-27. New Budget 2026 measures cost $15.2B that year and $33.8B in 2027-28.
Table 1: Economic and fiscal developments, policy actions, and measures. CAD billions. Budget 2026, p. 94 (PDF p. 104). A negative number implies a deterioration in the budgetary balance (lower revenue or higher expenses).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Budgetary balance - Spring Economic Update 2026 | -66.9 | -65.3 | -63.1 | -57.7 | -56.2 | -53.2 |
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| Economic and fiscal developments since SEU 2026 | 27.5 | 21.5 | 38.3 | 32.9 | 33.2 | 32.4 |
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| Budgetary balance before policy actions and measures | -39.3 | -43.8 | -24.8 | -24.8 | -23.0 | -20.8 |
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| Policy actions since SEU 2026 | — | -3.2 | -3.9 | -1.9 | -0.1 | -0.4 |
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| 1. Canada's Investment Supercycle | — | -2.0 | -11.0 | -12.8 | -11.7 | -14.4 |
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| 2. A more competitive and connected Canadian economy | — | -2.3 | -4.9 | -2.6 | -3.0 | -2.3 |
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| 3. A more affordable life | — | -8.6 | -8.0 | -5.1 | -4.1 | -4.8 |
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| 4. A strong and united Canada | — | -1.0 | -7.5 | -8.5 | -9.3 | -8.3 |
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| 5. A safe and sovereign Canada | — | -1.0 | -1.6 | -1.3 | -1.5 | -1.1 |
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| 6. A more efficient government | — | -0.3 | -0.6 | -0.6 | -0.8 | -0.8 |
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| Subtotal - Budget 2026 measures | — | -15.2 | -33.8 | -30.9 | -30.4 | -31.8 |
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| Total - policy actions and Budget 2026 measures | — | -18.4 | -37.7 | -32.8 | -30.5 | -32.1 |
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| Budgetary balance | -39.3 | -62.3 | -62.5 | -57.6 | -53.4 | -52.9 |
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| Budgetary balance (% of GDP) | -1.2 | -1.8 | -1.8 | -1.6 | -1.4 | -1.3 |
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| Federal debt (% of GDP) | 40.2 | 39.9 | 40.2 | 40.4 | 40.3 | 40.1 |
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Capital versus day-to-day spending
The government reports a capital budget alongside the deficit. It projects capital investments rising from $37.4B in 2025-26 to $78.2B in 2030-31, with day-to-day operations balanced from 2027-28. Much of the increase is the Productivity Mega Deduction, counted as forgone revenue that supports capital formation.
Table A1.5: Capital investments. CAD billions. Budget 2026, p. 321 (PDF p. 339).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Capital investments in Budget 2026 | 37.4 | 58.8 | 73.7 | 77.9 | 78.0 | 78.2 |
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| Capital investments in Budget 2026 (cash basis) | 60.2 | 103.3 | 126.0 | 131.4 | 130.9 | 124.7 |
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Table A1.6: Day-to-day operating balance. CAD billions. Budget 2026, p. 321 (PDF p. 339).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Day-to-day operating expenses | 534.6 | 553.7 | 569.8 | 578.2 | 598.0 | 618.1 |
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| Capital investments (expenses) | 31.1 | 48.8 | 57.0 | 60.9 | 63.1 | 64.0 |
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| Capital investments (forgone revenues) | 6.3 | 9.9 | 16.8 | 16.9 | 14.9 | 14.2 |
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| Day-to-day operating balance | -2.0 | -3.5 | 11.2 | 20.3 | 24.6 | 25.2 |
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Loans, investments and advances
Lending to Crown corporations such as CMHC, BDC, EDC and Farm Credit Canada does not appear in the deficit, but it is financed by borrowing: $72.5B in 2026-27 alone. This is why a loan program's face value should never be added to spending.
Table A1.11: Non-budgetary transactions and financial requirement. CAD billions. Budget 2026, p. 336 (PDF p. 354). Loans, investments and advances (mostly to enterprise Crown corporations such as CMHC, BDC, EDC and Farm Credit Canada) are financed through borrowing but are not budgetary expenses.
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Budgetary balance | -39.3 | -62.3 | -62.5 | -57.6 | -53.4 | -52.9 |
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| Loans, investments and advances - enterprise Crown corporations | -55.4 | -59.1 | -66.3 | -66.4 | -36.3 | -32.1 |
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| Loans, investments and advances - other | -5.2 | -13.4 | -7.7 | -4.1 | -5.2 | -9.3 |
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| Loans, investments and advances - total | -60.5 | -72.5 | -74.0 | -70.4 | -41.6 | -41.4 |
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| Non-financial assets | -18.5 | -26.1 | -35.5 | -37.9 | -39.6 | -39.8 |
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| Total non-budgetary transactions | -64.5 | -87.2 | -106.5 | -110.4 | -85.7 | -86.1 |
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| Financial source (requirement) | -103.9 | -149.5 | -169.0 | -168.0 | -139.1 | -139.1 |
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Revenues
Table A1.9: The revenue outlook. CAD billions. Budget 2026, p. 327 (PDF p. 345).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Personal income tax | 247.7 | 258.7 | 270.8 | 283.7 | 297.0 | 309.3 |
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| Corporate income tax | 104.2 | 102.7 | 97.1 | 97.1 | 100.6 | 100.2 |
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| Non-resident income tax | 14.5 | 14.8 | 15.0 | 15.3 | 15.5 | 15.8 |
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| Goods and Services Tax | 51.8 | 51.5 | 57.4 | 59.4 | 62.1 | 65.1 |
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| Customs import duties | 10.3 | 11.1 | 13.4 | 8.1 | 8.4 | 8.7 |
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| Other excise taxes/duties | 13.1 | 7.7 | 12.9 | 13.0 | 13.0 | 13.1 |
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| Other taxes | 0.0 | 2.7 | 1.9 | 2.1 | 2.1 | 2.1 |
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| Employment Insurance premium revenues | 32.5 | 34.3 | 35.5 | 36.7 | 38.2 | 39.7 |
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| Enterprise Crown corporations | 13.1 | 13.0 | 16.0 | 20.7 | 23.5 | 26.1 |
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| Other programs | 32.9 | 37.0 | 36.3 | 37.4 | 39.1 | 40.5 |
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| Net foreign exchange revenues and return on investments | 6.2 | 6.9 | 7.9 | 8.0 | 8.2 | 8.6 |
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| Total budgetary revenues | 526.4 | 540.3 | 564.2 | 581.5 | 607.7 | 629.1 |
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Expenses
Table A1.10: The expense outlook. CAD billions. Budget 2026, p. 332 (PDF p. 350).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Old Age Security program | 82.7 | 89.4 | 95.2 | 99.9 | 104.8 | 109.5 |
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| Employment Insurance benefits | 28.8 | 32.9 | 34.3 | 32.9 | 33.9 | 35.0 |
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| Canada Child Benefit | 30.1 | 31.2 | 32.3 | 33.5 | 34.6 | 35.7 |
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| Canada Health Transfer | 54.7 | 57.4 | 60.3 | 62.9 | 65.2 | 67.7 |
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| Canada Social Transfer | 17.4 | 17.9 | 18.5 | 19.0 | 19.6 | 20.2 |
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| Equalization | 26.2 | 27.2 | 28.4 | 29.6 | 30.7 | 31.9 |
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| Territorial Formula Financing | 5.5 | 5.8 | 6.3 | 6.7 | 7.0 | 7.2 |
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| Health agreements with provinces and territories | 4.3 | 4.3 | 4.3 | 2.5 | 2.5 | 2.5 |
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| Canada-wide early learning and child care | 7.9 | 10.3 | 11.0 | 8.2 | 8.5 | 8.8 |
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| Build Communities Strong Fund - Community Stream | 2.5 | 2.5 | 2.6 | 2.6 | 2.7 | 2.8 |
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| Other fiscal arrangements | -7.6 | -8.5 | -8.6 | -9.0 | -9.4 | -9.8 |
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| Other transfer payments | 115.0 | 122.4 | 125.7 | 128.6 | 129.6 | 129.2 |
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| Other direct program expenses | 131.0 | 150.0 | 149.1 | 150.8 | 156.6 | 159.5 |
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| Total program expenses, excluding net actuarial losses (gains) | 498.5 | 542.7 | 559.3 | 568.3 | 586.3 | 600.2 |
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| Public debt charges | 53.5 | 60.2 | 67.3 | 73.8 | 78.4 | 85.5 |
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| Net actuarial losses (gains) | 13.6 | -0.4 | 0.2 | -3.0 | -3.6 | -3.7 |
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| Total expenses | 565.7 | 602.6 | 626.8 | 639.1 | 661.1 | 682.1 |
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The full summary statement
Table A1.8: Summary statement of transactions. CAD billions. Budget 2026, p. 326 (PDF p. 344).
| 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
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| Budgetary revenues | 526.4 | 540.3 | 564.2 | 581.5 | 607.7 | 629.1 |
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| Program expenses, excluding net actuarial losses (gains) | 498.5 | 542.7 | 559.3 | 568.3 | 586.3 | 600.2 |
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| Public debt charges | 53.5 | 60.2 | 67.3 | 73.8 | 78.4 | 85.5 |
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| Total expenses, excluding net actuarial losses (gains) | 552.1 | 602.9 | 626.6 | 642.1 | 664.7 | 685.7 |
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| Net actuarial losses (gains) | 13.6 | -0.4 | 0.2 | -3.0 | -3.6 | -3.7 |
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| Budgetary balance | -39.3 | -62.3 | -62.5 | -57.6 | -53.4 | -52.9 |
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| Total liabilities | 2,318.3 | 2,484.1 | 2,671.8 | 2,855.3 | 3,003.9 | 3,151.7 |
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| Financial assets | 866.6 | 945.8 | 1,035.6 | 1,123.5 | 1,179.0 | 1,234.1 |
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| Net debt | 1,451.8 | 1,538.3 | 1,636.3 | 1,731.8 | 1,824.9 | 1,917.6 |
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| Non-financial assets | 145.7 | 171.8 | 207.2 | 245.2 | 284.8 | 324.6 |
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| Federal debt | 1,306.1 | 1,366.5 | 1,429.0 | 1,486.6 | 1,540.1 | 1,593.0 |
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| Public debt charges (% of GDP) | 1.6 | 1.8 | 1.9 | 2.0 | 2.0 | 2.2 |
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The economy behind the numbers
Budget 2026 economic assumptions (calendar years). Budget 2026, p. 340 (PDF p. 358). | 2026 | 2027 | 2028 | 2029 | 2030 |
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| Real GDP growth (%) | 1.0 | 1.7 | 2.0 | 2.0 | 1.9 |
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| GDP inflation (%) | 4.6 | 1.9 | 1.6 | 1.9 | 1.9 |
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| Unemployment rate (%) | 6.6 | 6.2 | 5.9 | 5.9 | 5.8 |
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| Nominal GDP (CAD billions) | 3,427 | 3,552 | 3,681 | 3,826 | 3,975 |
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All figures are projections in the budget document, transcribed by hand and checked automatically against the page text. Fiscal years run April to March.