The Fiscal Monitor - March 2026

Highlights

March 2026

There was a budgetary deficit of $29.7 billion in March 2026, compared to a deficit of $23.9 billion in March 2025. The budgetary deficit before net actuarial losses and gains was $20.6 billion, compared to a deficit of $23.5 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 March 2025:

• Revenues increased by $1.8 billion, or 4.0 per cent, largely reflecting higher revenues from corporate income tax, interest and penalties, and the Goods and Services Tax (GST). These increases were partially offset by decreases in pollution pricing proceeds to be returned to Canadians, Employment Insurance (EI) premium revenues, and customs import duties.
• Program expenses excluding net actuarial losses were down $1.2 billion, or 1.9 per cent, largely reflecting lower direct program expenses due to savings recognized in March 2026 from amendments to employee future benefit plans announced in Budget 2025, offset in part by a year-over-year timing difference in Canada-wide early learning and child care transfers and higher other transfer payments.
• Public debt charges were up $0.1 billion, or 2.0 per cent, as higher average effective interest rates on an increased stock of marketable bonds were largely offset by lower interest rates on treasury bills.
• Net actuarial losses were up $8.8 billion, from $0.3 billion to $9.1 billion, reflecting the accelerated amortization of actuarial losses following amendments to employee future benefit plans noted above, in accordance with government accounting standards.

April 2025 to March 2026

The government posted a budgetary deficit of $55.3 billion for the April 2025 to March 2026 period of the 2025-26 fiscal year, compared to a deficit of $43.2 billion reported for the same period of 2024-25. The budgetary deficit before net actuarial losses was $41.6 billion, compared to a deficit of $39.1 billion in the April to March period of 2024-25.

Compared to 2024-25:

• Revenues were up $5.2 billion, or 1.1 per cent, largely reflecting increases in personal and corporate income tax revenues, other revenues, and customs import duties due to the countermeasures imposed in response to U.S. tariffs. These increases were offset in part by lower pollution pricing proceeds to be returned to Canadians and lower GST revenues.
• Program expenses excluding net actuarial losses were up $7.6 billion, or 1.6 per cent, reflecting increases in major transfers to persons, major transfers to provinces, territories and municipalities, and direct program expenses, partly offset by the wind-down of the Canada Carbon Rebate.
• Public debt charges increased by $0.1 billion, or 0.1 per cent, as higher average effective interest rates on an increased stock of marketable bonds and higher Consumer Price Index adjustments on Real Return Bonds were offset by lower short-term interest rates on treasury bills and lower net interest on cross-currency swap transactions and other liabilities.
• Net actuarial losses increased by $9.7 billion, or 240.7 per cent, largely reflecting the accelerated amortization of actuarial losses resulting from amendments to employee future benefit plans in 2025-26.

The March 2026 results are not the final results for 2025-26. The final results for the fiscal year will include additional end-of-year adjustments to be made once further information becomes available, including the accrual of tax revenues reflecting post-March assessments of tax returns and valuation adjustments for assets and liabilities.

The impact of post-March tax accruals and valuation and other adjustments is uncertain. For example, for the past three years during the post-March period the final budgetary deficit decreased by $6.8 billion in 2024-25, grew $10.9 billion in 2023-24, and decreased by $6.0 billion in 2022-23.

The final results for 2025-26 will be published in the 2026 Public Accounts of Canada.

Revenues

Revenues in March 2026 totalled $46.8 billion, up $1.8 billion, or 4.0 per cent, from March 2025.

• Tax revenues increased by $2.6 billion, or 7.6 per cent, compared to the same period in 2024-25, reflecting higher corporate income tax revenues driven by higher receipts from the financial sector, and higher GST revenues, partly reflecting a base effect from the GST/Harmonized Sales Tax holiday that lowered March 2025 collections.
• Pollution pricing proceeds to be returned to Canadians were down $1.5 billion, or 99.3 per cent, reflecting the cessation of the application of the federal fuel charge effective April 1, 2025.
• EI premium revenues were down $0.4 billion, or 9.0 per cent, reflecting a higher year-end adjustment in March 2025 than in March 2026.
• Other revenues were up $1.0 billion, or 20.0 per cent, mainly reflecting higher interest and penalty revenue.

Revenues for the April to March period of 2025-26 totalled $500.0 billion, up $5.2 billion, or 1.1 per cent, from the same period in 2024-25.

• Tax revenues increased by $12.1 billion, or 3.0 per cent, compared to the same period in 2024-25, reflecting increases in personal and corporate income tax revenues and customs import duties, 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 $12.7 billion, or 101.6 per cent, reflecting the cessation of the application of the federal fuel charge.
• EI premium revenues were up $1.6 billion, or 5.1 per cent, reflecting a higher number of persons employed, stronger wages, and a higher limit to maximum insurable earnings.
• Other revenues were up $4.2 billion, or 9.1 per cent, largely reflecting higher revenues from enterprise Crown corporations, including a large year-over-year improvement in the Bank of Canada's net profits.

Expenses

Program expenses excluding net actuarial losses in March 2026 were $63.0 billion, down $1.2 billion, or 1.9 per cent, from March 2025.

• Major transfers to persons, consisting of benefits under the Old Age Security program, EI benefits, COVID-19 income support for workers, and children's benefits, were up $0.7 billion or 5.7 per cent.
  • Transfers under the Old Age Security program increased by $0.5 billion, or 7.9 per cent, largely reflecting growth in the number of recipients and changes in consumer prices, to which benefits are fully indexed.
  • EI benefits decreased by $0.1 billion, or 3.5 per cent.
  • COVID-19 income support for workers increased $0.1 billion, or 122.5 per cent, reflecting lower redeterminations of benefits, as well as current-year revisions to previous redeterminations.
  • Children's benefits were up $0.2 billion, or 6.1 per cent, in part reflecting the indexation of benefits to consumer prices, which annually takes effect July 1st.
• Major transfers to provinces, territories and municipalities were up $3.9 billion, or 46.3 per cent, largely reflecting a year-over-year timing difference in payments for Canada-wide early learning and child care.
• Pollution pricing proceeds returned to Canadians decreased by $0.8 billion, or 71.8 per cent, largely reflecting the structural wind-down of the Canada Carbon Rebate and related fuel charge return mechanisms following the removal of the federal fuel charge effective April 1, 2025.
• Direct program expenses were down $5.1 billion, or 12.0 per cent. Within direct program expenses:
  • Other transfer payments increased by $1.5 billion, or 5.8 per cent, reflecting higher loan provisions, an increase in transfers in support of housing, the introduction of the Canada Disability Benefit, growth in the Canada Workers Benefit, and higher offshore resource revenue transfers, offset in part by lower transfers in respect of Indigenous Peoples.
  • Operating expenses of the government's departments, agencies, and consolidated Crown corporations and other entities decreased by $6.6 billion, or 42.4 per cent. This decrease is largely attributable to the recognition in March 2026 of amendments to employee future benefit plans announced in Budget 2025, which included aligning the indexation of certain pension benefits with the Consumer Price Index and adjusting medical cannabis benefits to reflect market prices. These savings were offset by the accelerated recognition of existing actuarial losses under net actuarial losses, in accordance with government accounting standards.

Public debt charges increased $0.1 billion, or 2.0 per cent, as higher average effective interest rates on an increased stock of marketable bonds were largely offset by lower interest rates on treasury bills.

Net actuarial losses, 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, were up $8.8 billion, from $0.3 billion to $9.1 billion, largely reflecting the accelerated recognition of actuarial losses due to plan amendments in the current year.

For the April to March period of 2025-26, program expenses excluding net actuarial losses were $487.9 billion, up $7.6 billion, or 1.6 per cent, from the same period the previous year.

• Major transfers to persons were up $9.7 billion or 7.4 per cent.
  • Transfers under the Old Age Security program increased by $2.4 billion, or 2.9 per cent, largely reflecting growth in the number of recipients and changes in consumer prices, to which benefits are fully indexed.
  • EI benefits increased by $3.5 billion, or 14.0 per cent, largely reflecting a higher unemployment rate in this period compared to the previous year, as well as new measures that made access to EI benefits easier.
  • COVID-19 income support for workers increased $2.3 billion, or 108.0 per cent, reflecting lower redeterminations of benefits, as well as current-year revisions to previous redeterminations.
  • Children's benefits were up $1.5 billion, or 5.3 per cent, in part reflecting the indexation of benefits to consumer prices.
• Major transfers to provinces, territories and municipalities were up $5.7 billion, or 5.5 per cent, largely reflecting legislated growth in the Canada Health Transfer, the Canada Social Transfer, Equalization transfers and transfers to the territories, and increased Canada-wide early learning and child care transfers.
• Pollution pricing proceeds returned to Canadians decreased by $11.2 billion, or 72.3 per cent, largely reflecting the wind-down of the Canada Carbon Rebate and related fuel charge return mechanisms.
• Direct program expenses were up $3.3 billion, or 1.5 per cent. Within direct program expenses:
  • Other transfer payments increased by $0.1 billion, or 0.1 per cent, as increases due to the rollout of transfers under the Canadian Dental Care Plan, higher defence contributions, increased loan provisions, growth in Canada Workers Benefit transfers, and the introduction of the Canada Disability Benefit were largely offset by a decrease in transfers in respect of Indigenous Peoples, disaster assistance, and incentives for the purchase of electric vehicles.
  • Operating expenses of the government's departments, agencies, and consolidated Crown corporations and other entities increased by $3.2 billion, or 2.6 per cent. This increase is mainly due to a change in how bad debt on taxes receivable is recorded to improve reporting accuracy in the Fiscal Monitor. As a result, these expenses are now recorded earlier in the fiscal year instead of after March. Increased defence spending also contributed to higher expenses. The increase was partly offset by lower personnel costs due to amendments to employee future benefits announced in Budget 2025.

Public debt charges increased by $0.1 billion, or 0.1 per cent, as higher average effective interest rates on an increased stock of marketable bonds and higher Consumer Price Index adjustments on Real Return Bonds were offset by lower short-term interest rates on treasury bills and lower net interest on cross-currency swap transactions and other liabilities.

Net actuarial losses were up by $9.7 billion, or 240.7 per cent, largely reflecting the accelerated amortization of actuarial losses in the current year resulting from amendments to employee future benefit plans.

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

Financial requirement of $103.7 billion for April 2025 to March 2026

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 $55.3 billion and a requirement of $48.4 billion from non-budgetary transactions, there was a financial requirement of $103.7 billion for the April 2025 to March 2026 period, compared to a financial requirement of $129.7 billion for the same period of the previous year.

Net financing activities up $105.9 billion

The government financed this financial requirement of $103.7 billion and increased cash balances by $2.2 billion by increasing unmatured debt by $105.9 billion. The increase in unmatured debt was achieved primarily through the issuance of marketable bonds.

Cash balances at the end of March 2026 stood at $48.3 billion, up $2.2 billion from their level at the end of March 2025.

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 $55.5 billion over the April 2025 to March 2026 period, reflecting the $55.3‑billion budgetary deficit and $0.2 billion in net remeasurement losses.

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.

May 2026