What is Canada's fiscal policy stance?
Latest release Spring Update, April 2026
Fiscal policy is modestly stimulative. The March Fiscal Monitor put the FY2025-26 deficit at $55.3 billion on a cash basis, while the Spring Economic Update estimate is $66.9 billion, up from $36.3 billion the year before. Debt is still expected to sit near 41.1% of GDP, but public debt charges are taking 10.6% of revenue.
Plate 01 Budget balance — full history, plus the operating-capital forecast
As of Apr 2026 (DoF) / Nov 2025 (PBO)
Ottawa plans to balance day-to-day spending and borrow only for capital.
The operating balance is set to swing from deficit to a small surplus by 2028-29; capital investment of $40 to $60 billion a year keeps the headline balance in the red.
Plate 02 Budget 2025 operating balance under two definitions of capital
As of Apr 2026
The budget watchdog says the government misclassifies operating costs as capital.
The government's books show day-to-day spending balancing by 2028-29. But the PBO counts tax breaks and subsidies as everyday spending — moving $94 billion back into operating expenses over the plan's six years, and keeping the operating books in deficit through 2029-30.
Plate 03 Federal revenues vs program expenses, % of GDP
As of Apr 2026
As spending falls, revenues hold flat.
Whatever the definition fight, the deficit is forecast to narrow from reduced spending, not higher revenues. Projected revenues hold near 16% of GDP, while spending is set to fall to 15% by 2030-31.
Plate 04 Federal debt, % of GDP, and debt charges, % of revenue
As of Apr 2026 (DoF) / Jun 2026 (PBO)
Debt rises modestly, but servicing costs climb faster.
Debt-to-GDP sits at 41.2% and is set to rise by about 1 to 2 percentage points. But debt servicing costs will rise faster: interest payments will rise from 10 to 13 cents per revenue dollar by 2030-31.
Plate 05 Gross issuance by maturity: Treasury bills and bonds
As of Apr 2026
Gross issuance is set to ease.
The government plans $566 billion of gross debt issuance in 2026-27, down from last year's $603 billion. Three quarters will be used to refinance maturing debt, while the rest reflects new borrowing.