The Fiscal Monitor - September 2025

Highlights

September 2025

There was a budgetary deficit of $5.0 billion in September 2025, compared to a deficit of $3.2 billion in September 2024. The budgetary deficit before net actuarial losses and gains was $4.6 billion, compared to a deficit of $4.3 billion in the same period of 2024-25. The budgetary balance before net actuarial losses and gains is intended to supplement the traditional budgetary balance and improve the transparency of the government's financial reporting by isolating the impact of the amortization of net actuarial losses and gains arising from the revaluation of the government's pension and other employee future benefit plans.

Compared to September 2024:

• Revenues increased by $0.9 billion, or 2.5 per cent, largely reflecting increases across most categories, partially offset by lower pollution pricing proceeds to be returned to Canadians.
• Program expenses excluding net actuarial losses and gains were up $1.6 billion, or 4.6 per cent, largely reflecting higher transfers to persons and direct program expenses.  
• Public debt charges were down $0.4 billion, or 8.3 per cent, as the impact of lower interest rates on treasury bills and lower interest on the government's pension and benefit obligations were partly offset by an increase in the stock and average effective interest rate of marketable bonds.
• The government recorded net actuarial losses of $0.4 billion in September 2025, compared to net actuarial gains of $1.1 billion in September 2024, largely due to a year-to-date adjustment in September 2024 to reflect updated estimates for the 2024-25 fiscal year.

April to September 2025

The government posted a budgetary deficit of $16.1 billion for the April to September period of the 2025-26 fiscal year, compared to a deficit of $13.0 billion reported for the same period of 2024-25. The budgetary deficit before net actuarial losses and gains was $13.6 billion, compared to a deficit of $11.0 billion in the April to September period of 2024-25.

Compared to 2024-25:

• Revenues were up $5.8 billion, or 2.5 per cent, reflecting increases in customs import duties due to the countermeasures imposed in response to U.S. tariffs, and corporate and personal income tax revenues. These increases were offset in part by lower pollution pricing proceeds to be returned to Canadians and lower Goods and Services Tax (GST) revenues.
• Program expenses excluding net actuarial losses and gains were up $9.0 billion, or 4.2 per cent, reflecting increases in direct program expenses, major transfers to persons, and major transfers to provinces, territories and municipalities, which were partly offset by the wind-down of the Canada Carbon Rebate for individuals.
• Public debt charges decreased by $0.6 billion, or 2.2 per cent, mainly due to lower short-term interest rates on treasury bills and lower net interest on currency swap transactions, partially offset by higher average effective rates on an increased stock of marketable bonds.
• Net actuarial losses increased by $0.5 billion, or 23.9 per cent, reflecting the amortization of losses arising from actuarial valuations of the government's pension and other employee future benefit plans as at March 31, 2025, offset in part by the end of the amortization of certain prior years' net actuarial losses.

Revenues

Revenues in September 2025 totalled $37.1 billion, up $0.9 billion, or 2.5 per cent, from September 2024.

• Tax revenues increased by $1.6 billion, or 5.3 per cent, compared to the same period in 2024-25, reflecting increases across most categories.
• Pollution pricing proceeds to be returned to Canadians were down $0.9 billion, or 102.1 per cent, reflecting the cessation of the application of the federal fuel charge effective April 1, 2025.
• Employment Insurance (EI) premium revenues were up $0.2 billion, or 9.1 per cent, reflecting a higher number of persons employed.
• Other revenues were up $0.1 billion, or 1.3 per cent, reflecting a number of factors led by higher revenues from enterprise Crown corporations and year-over-year timing differences, offset in part by lower interest and penalty revenue.

Revenues for the April to September period of 2025-26 totalled $238.2 billion, up $5.8 billion, or 2.5 per cent, from the same period in 2024-25.

• Tax revenues increased by $10.1 billion, or 5.4 per cent, compared to the same period in 2024-25, reflecting increases in customs import duties, and corporate and personal income tax revenues, partially offset by lower GST revenues. The increase in customs import duties is due to the countermeasures imposed in response to U.S. tariffs.
• Pollution pricing proceeds to be returned to Canadians were down $6.0 billion, or 103.3 per cent, reflecting the cessation of the application of the federal fuel charge.
• EI premium revenues were up $0.8 billion, or 5.3 per cent, reflecting a higher number of persons employed.
• Other revenues were up $0.9 billion, or 4.0 per cent, reflecting a number of factors including higher revenues from enterprise Crown corporations, year-over-year timing differences, and higher offshore revenues, partly offset by lower interest and penalty revenue.

Expenses

Program expenses excluding net actuarial losses and gains in September 2025 were $37.1 billion, up $1.6 billion, or 4.6 per cent, from September 2024.

• Major transfers to persons, consisting of elderly benefits, EI benefits, COVID-19 income support for workers, and children's benefits, were up $1.0 billion or 9.1 per cent.
  • Elderly benefits increased by $0.1 billion, or 2.2 per cent.
  • EI benefits increased by $0.7 billion, or 33.7 per cent, largely reflecting a higher unemployment rate in September this year and the timing of Labour Market Development Agreements payments to provinces and territories.
  • COVID-19 income support for workers increased $0.1 billion, or 154.5 per cent, reflecting lower redeterminations of benefits, as well as current-year revisions to previous redeterminations.
  • Children's benefits were up $0.1 billion, or 2.8 per cent, mainly reflecting the indexation of benefits to consumer prices, which annually takes effect July 1st.
• Major transfers to provinces, territories and municipalities were up $0.2 billion, or 3.0 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, offset in part by year-over-year differences in the timing of payments for early learning and child care and Canada Community-Building Fund transfers.
• Pollution pricing proceeds returned to Canadians decreased by $0.1 billion, or 59.0 per cent, primarily due to the phase-out of the Canada Carbon Rebate. Following the removal of the federal fuel charge effective April 1, 2025, rebate payments were in wind-down, with only final disbursements occurring in spring and summer 2025.
• Direct program expenses were up $0.5 billion, or 3.2 per cent. Within direct program expenses:
  • Other transfer payments increased by $49 million, or 0.8 per cent. 
  • Operating expenses of the government's departments, agencies, and consolidated Crown corporations and other entities increased by $0.5 billion, or 4.7 per cent, largely driven by higher personnel costs and defence expenses.

Public debt charges decreased $0.4 billion, or 8.3 per cent, as the impact of lower interest rates on treasury bills and lower interest on the government's pension and benefit obligations were largely offset by an increase in the stock and average effective interest rate of marketable bonds.

Net actuarial losses and gains, which represent the amortization of changes in the value of the government's obligations for pensions and other employee future benefits accrued in previous fiscal years and related assets, amounted to a $0.4-billion loss in September 2025, compared to a $1.1-billion gain in the same period last year. The change from the prior year is primarily due to a year-to-date adjustment in September 2024 to reflect updated estimates for the 2024-25 fiscal year. 

For the April to September period of 2025-26, program expenses excluding net actuarial losses and gains were $224.2 billion, up $9.0 billion, or 4.2 per cent, from the same period the previous year.

• Major transfers to persons were up $4.1 billion or 6.4 per cent.
  • Elderly benefits increased by $0.9 billion, or 2.2 per cent, largely reflecting changes in consumer prices, to which benefits are fully indexed.
  • EI benefits increased by $2.3 billion, or 19.6 per cent, largely reflecting a higher unemployment rate in this period compared to the previous year, as well as the timing of Labour Market Development Agreements payments to provinces and territories.
  • COVID-19 income support for workers increased $0.4 billion, or 110.5 per cent, reflecting lower redeterminations of benefits, as well as current-year revisions to previous redeterminations.
  • Children's benefits were up $0.7 billion, or 4.7 per cent, mainly reflecting the indexation of benefits to consumer prices.
• Major transfers to provinces, territories and municipalities were up $3.0 billion, or 5.9 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, and higher year-to-date payments for Canada-wide early learning and child care and health agreements with provinces and territories.
• Pollution pricing proceeds returned to Canadians decreased by $3.2 billion, or 55.1 per cent, largely reflecting the structural wind-down of the Canada Carbon Rebate following the removal of the federal fuel charge.
• Direct program expenses were up $5.1 billion, or 5.5 per cent. Within direct program expenses:
  • Other transfer payments increased by $0.9 billion, or 2.5 per cent, reflecting a number of factors, including the rollout of transfers under the Canadian Dental Care Plan and year-over-year timing differences, offset in part by a payment to support the construction and maintenance of Indigenous community infrastructure in the prior year that did not reoccur in the current year, and lower provisions for disaster assistance.
  • Operating expenses of the government's departments, agencies, and consolidated Crown corporations and other entities increased by $4.2 billion, or 7.4 per cent, largely reflecting an increase in personnel costs and defence expenses.

Public debt charges decreased by $0.6 billion, or 2.2 per cent, mainly due to lower short-term interest rates on treasury bills and lower net interest on currency swap transactions, partially offset by higher average effective rates on an increased stock of marketable bonds.

Net actuarial losses increased by $0.5 billion, or 23.9 per cent, reflecting the amortization of losses arising from actuarial valuations of the government's pension and other employee future benefit plans as at March 31, 2025, offset in part by the end of the amortization of certain prior years' net actuarial losses.

The following table presents total expenses by main object of expense.

Financial requirement of $55.2 billion for April to September 2025

The budgetary balance is presented on an accrual basis of accounting, recording government revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. In contrast, the financial source/requirement measures the difference between cash coming in to the government and cash going out. This measure is affected not only by changes in the budgetary balance but also by the cash source/requirement resulting from the government's investing activities through its acquisition of capital assets and its loans, financial investments and advances, as well as from other activities, including payment of accounts payable and collection of accounts receivable, foreign exchange activities, and the amortization of its tangible capital assets. The difference between the budgetary balance and financial source/requirement is recorded in non-budgetary transactions.

With a budgetary deficit of $16.1 billion and a requirement of $39.1 billion from non-budgetary transactions, there was a financial requirement of $55.2 billion for the April to September 2025 period, compared to a financial requirement of $63.4 billion for the same period of the previous year.

Net financing activities up $57.8 billion

The government financed this financial requirement of $55.2 billion and increased cash balances by $2.6 billion by increasing unmatured debt by $57.8 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds and treasury bills.

Cash balances at the end of September 2025 stood at $48.8 billion, up $9.0 billion from their level at the end of September 2024.

Federal debt

The federal debt, or accumulated deficit, is the difference between the government's total liabilities and total assets. The year-over-year change in the accumulated deficit reflects the year-to-date budgetary balance plus remeasurement gains and losses.

Remeasurement gains and losses include:

• changes in the fair value of derivatives, such as swap agreements and foreign exchange forward agreements, which are used by the government to manage financial risks, and
• certain unrealized gains and losses on financial instruments and certain actuarial gains and losses related to pensions and other employee future benefits reported by consolidated Crown corporations, enterprise Crown corporations, and other government business enterprises.
• Remeasurement gains and losses are not reflected in the budgetary balance but are instead charged directly to the accumulated deficit.

The accumulated deficit increased by $16.1 billion over the April to September 2025 period, reflecting the $16.1‑billion budgetary deficit and $8 million in net remeasurement gains.

Notes

1. The Fiscal Monitor is a report on the consolidated financial results of the Government of Canada, prepared monthly by the Department of Finance Canada. The government is committed to releasing The Fiscal Monitor on a timely basis in accordance with the International Monetary Fund's Special Data Dissemination Standards Plus, which are designed to promote member countries' data transparency and promote the development of sound statistical systems.
2. The financial results reported in The Fiscal Monitor are drawn from the accounts of Canada, which are maintained by the Receiver General and used to prepare the annual Public Accounts of Canada.
3. The Fiscal Monitor is generally prepared in accordance with the same accounting policies as used to prepare the government's annual consolidated financial statements, which are summarized in Section 2 of Volume I of the Public Accounts of Canada, available through the Public Services and Procurement Canada website.
4. The financial results presented in The Fiscal Monitor have not been audited or reviewed by an external auditor.
5. There can be substantial volatility in monthly results due to the timing of revenue receipts and expense recognition. For instance, a large share of government spending is typically reported in the March Fiscal Monitor.
6. The April to March results reported in The Fiscal Monitor are not the final results for the fiscal year as a whole. The final results are published in the annual Public Accounts of Canada and incorporate post-March end-of-year adjustments made once further information becomes available, including the accrual of tax revenues reflecting assessments of tax returns and valuation adjustments for assets and liabilities. Post-March adjustments may also include the accrual of measures announced in the budget that are recorded upon receipt of Royal Assent of enabling legislation.
7. Table 7, Condensed Statement of Assets and Liabilities, is included in the monthly Fiscal Monitor following the finalization and publication of the government's financial results for the preceding fiscal year, typically in the fall.

Note: Unless stated otherwise, changes in financial results are presented on a year-over-year basis.

For inquiries about this publication, contact Gina Clark at gina.clark@fin.gc.ca.

November 2025