Budget 2026: Fiscal outlook and risks

Over the next six years, the deficit is projected to be $34 billion lower than previously forecast.

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Over the next six years, the deficit is projected to be $34 billion lower than previously forecast.

Budget 2026 - Masters of our Destiny · PDF p. 103

Budget 2026 also respects the fiscal anchors laid out in Budget 2025: the deficit-to-GDP ratio is projected to decline over the budget planning horizon, and day-to-day operating spending is on track to be balanced by revenues by 2027-28, one year ahead of the target set in Budget 2025.

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Budget 2026 also respects the fiscal anchors laid out in Budget 2025: the deficit-to-GDP ratio is projected to decline over the budget planning horizon, and day-to-day operating spending is on track to be balanced by revenues by 2027-28, one year ahead of the target set in Budget 2025.

Budget 2026 - Masters of our Destiny · PDF p. 337

The deficit is projected to be fully accounted for by capital investments in 2027-28 and each subsequent year—one year earlier than committed to in Budget 2025.

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The deficit is projected to be fully accounted for by capital investments in 2027-28 and each subsequent year—one year earlier than committed to in Budget 2025.

Budget 2026 - Masters of our Destiny · PDF p. 106

Public debt charges are expected to increase from $60.2 billion in 2026-27 to $85.5 billion in 2030-31 due to projected increases in the stock of debt and higher interest rates. As a share of GDP, public debt charges are projected to rise from 1.8% in 2026-27 to 2.2% in 2030-31.

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Public debt charges are expected to increase from $60.2 billion in 2026-27 to $85.5 billion in 2030-31 due to projected increases in the stock of debt and higher interest rates. As a share of GDP, public debt charges are projected to rise from 1.8% in 2026-27 to 2.2% in 2030-31.

Budget 2026 - Masters of our Destiny · PDF p. 353

Despite the rise of interest rates since 2022, the government’s debt charges as a share of GDP remain sustainable, near historical lows, and below the historical average over the past 40 years of 3.2%.

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Despite the rise of interest rates since 2022, the government’s debt charges as a share of GDP remain sustainable, near historical lows, and below the historical average over the past 40 years of 3.2%.

Budget 2026 - Masters of our Destiny · PDF p. 376

As shown in Table A1.11, a financial requirement is projected in each year over the forecast horizon, reflecting financial requirements associated with the projected budgetary deficits and forecast requirements from non-budgetary activities.

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As shown in Table A1.11, a financial requirement is projected in each year over the forecast horizon, reflecting financial requirements associated with the projected budgetary deficits and forecast requirements from non-budgetary activities.

Budget 2026 - Masters of our Destiny · PDF p. 354

The projected 2027-28 gross issuance of domestic bonds and treasury bills (i.e., domestic borrowing program) totals $606 billion (see Table A2.3). This reflects requirements to refinance $437 billion of maturing domestic debt, in addition to projected financial requirements of $169 billion, which includes up to $30 billion to fund purchases of Canada Mortgage Bonds.

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The projected 2027-28 gross issuance of domestic bonds and treasury bills (i.e., domestic borrowing program) totals $606 billion (see Table A2.3). This reflects requirements to refinance $437 billion of maturing domestic debt, in addition to projected financial requirements of $169 billion, which includes up to $30 billion to fund purchases of Canada Mortgage Bonds.

Budget 2026 - Masters of our Destiny · PDF p. 378

A 1% increase in interest rates decreases the budgetary balance by $4.1 billion in the first year, $5.6 billion in the second year, and $7.9 billion in the fourth year (Table A1.18).

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A 1% increase in interest rates decreases the budgetary balance by $4.1 billion in the first year, $5.6 billion in the second year, and $7.9 billion in the fourth year (Table A1.18).

Budget 2026 - Masters of our Destiny · PDF p. 365

The government will provide an initial $25 billion over three years to seed the Fund, which will grow over time through reinvested returns and other assets that may be allocated to it. Operating at arm’s length and guided by a mandate to generate commercial returns, the Fund will help build a lasting pool of national wealth that supports Canada’s long-term prosperity.

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The government will provide an initial $25 billion over three years to seed the Fund, which will grow over time through reinvested returns and other assets that may be allocated to it. Operating at arm’s length and guided by a mandate to generate commercial returns, the Fund will help build a lasting pool of national wealth that supports Canada’s long-term prosperity.

Budget 2026 - Masters of our Destiny · PDF p. 180

Direct program expenses also include provisions for contingent liabilities, which reflect possible obligations arising from past events or transactions where the amount and timing of any future payment may be uncertain. These provisions include amounts related to claims and litigation, guarantees provided by the government, assessed taxes under appeal, callable share capital in international organisations, and insurance programs of agent enterprise Crown corporations.

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Direct program expenses also include provisions for contingent liabilities, which reflect possible obligations arising from past events or transactions where the amount and timing of any future payment may be uncertain. These provisions include amounts related to claims and litigation, guarantees provided by the government, assessed taxes under appeal, callable share capital in international organisations, and insurance programs of agent enterprise Crown corporations.

Budget 2026 - Masters of our Destiny · PDF p. 352

These expenses can vary significantly from year to year and have averaged around $10 billion annually in recent years.

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These expenses can vary significantly from year to year and have averaged around $10 billion annually in recent years.

Budget 2026 - Masters of our Destiny · PDF p. 352

The $10 billion Indigenous Loan Guarantee Program supports making that possible by giving Indigenous communities access to more affordable financing to invest in major projects.

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The $10 billion Indigenous Loan Guarantee Program supports making that possible by giving Indigenous communities access to more affordable financing to invest in major projects.

Budget 2026 - Masters of our Destiny · PDF p. 59

The fifth loan guarantee, for an oil and gas project, is currently under negotiation, giving multiple communities a direct stake in major energy infrastructure and the opportunity to build long-term revenue and wealth.

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The fifth loan guarantee, for an oil and gas project, is currently under negotiation, giving multiple communities a direct stake in major energy infrastructure and the opportunity to build long-term revenue and wealth.

Budget 2026 - Masters of our Destiny · PDF p. 59

The Indigenous Loan Guarantee Program, alongside Ontario through its Indigenous Opportunities Financing Program, will provide an approximately $715 million loan guarantee to allow seven First Nations in Ontario to own a significant minority interest in the Darlington New Nuclear Project.

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The Indigenous Loan Guarantee Program, alongside Ontario through its Indigenous Opportunities Financing Program, will provide an approximately $715 million loan guarantee to allow seven First Nations in Ontario to own a significant minority interest in the Darlington New Nuclear Project.

Budget 2026 - Masters of our Destiny · PDF p. 142