FX.co ★ Canada Budget Deficit Widens in July

Canada’s federal deficit widened to C$4.77 billion in July 2026 from C$1.51 billion a year earlier, driven by higher fiscal expenditures. Program expenses, excluding net actuarial losses, increased 5.1% to C$41.81 billion, primarily reflecting higher direct program spending and larger major transfers to persons, partially offset by a decline in pollution pricing proceeds returned to Canadians. Public debt charges rose 7.4% to C$5.4 billion, owing to higher average effective interest rates on a larger stock of marketable bonds. Net actuarial losses climbed 23.9% to C$415 million. On the revenue side, total receipts grew 7.4% to C$42.8 billion, mainly due to higher personal income tax revenues, partly offset by lower customs import duties, reduced energy tax revenues, and weaker corporate income tax revenues.