FX.co ★ Canada Budget Deficit Shrinks in May

Canada’s federal budget deficit narrowed to CAD 0.31 billion in May 2026, down from CAD 2.2 billion in the same month a year earlier. Revenues rose 12.6% year-on-year to CAD 41.94 billion, largely driven by higher income and excise tax receipts. Program expenses, excluding net actuarial losses, increased 6.2% to CAD 36.68 billion, reflecting stronger direct program spending and higher transfers to persons, partially offset by reduced transfers to provinces, territories, and municipalities. Public debt charges climbed 12.7% to CAD 5.16 billion, owing to higher effective interest rates on a larger stock of marketable bonds. Net actuarial losses rose 23.9% to CAD 415 million, unchanged from the previous month. The budgetary deficit before net actuarial losses stood at CAD 0.1 billion, compared with CAD 1.86 billion a year earlier.