OTTAWA, July 25 (Reuters) - Canada recorded a sharply higher C$6.50 billion ($4.71 billion) budget deficit for the first two months of the 2025/26 fiscal year as government expenditures grew but revenues stalled, the finance ministry said on Friday.
By comparison, the deficit in the same period a year earlier had been just C$3.82 billion, it said in a statement.
Program expenses rose 4% on increases across all major categories of spending. Public debt charges increased by 3.8% largely because of higher rates of government bonds.
Year-to-date revenues marginally increased by C$26 million, largely reflecting lower corporate income tax and lower revenues from GST. This was partly offset by higher income from customs import duties and personal income tax revenue.
Canada's government has been earning higher import duty revenues because of counter-tariffs on the U.S. in response to President Donald Trump's tariffs. The data showed that customs import duties for the first two months of the fiscal year jumped 180% from the same period a year ago.
On a monthly basis, Canada posted a deficit of C$228 million in May, compared to a C$1.17 billion surplus in May 2024.
($1 = 1.3701 Canadian dollars)
(Reporting by Promit Mukherjee, editing by David Ljunggren)
((Reuters Ottawa bureau; david.ljunggren@tr.com, opens new tab))
Keywords: CANADA BUDGET/
