Finance Minister François-Philippe Champagne has confirmed that the government will present its latest budget on November 5th. This will mark the second budget release during Prime Minister Mark Carney’s tenure and the second consecutive fall budget introduction. Traditionally, the federal budget was unveiled in the spring, but Carney made the decision to switch to a fall schedule last year.
During Tuesday’s question period, Champagne disclosed the timing of this year’s budget. The government’s spring economic update in April indicated a reduced deficit for the previous fiscal year compared to initial projections. The forecasted deficit for 2025-26 in the 2025 budget was $78.3 billion, but the April update revised it to $66.9 billion due in part to surging oil prices.
Notably, the Parliamentary Budget Office (PBO) recently adjusted its economic growth projections for this year and the next. The PBO now estimates a 0.9% real gross domestic product growth for this year and 1.5% for 2027, down from the earlier forecasts of 1.1% and 1.6%, respectively. Annette Ryan, the parliamentary budget officer, attributed the revised outlook to “additional trade measures and ongoing uncertainty.”
Furthermore, the PBO projects a budgetary deficit of $63.3 billion for the 2026-27 fiscal year, peaking at $70.2 billion in 2027-28. Despite the new spending measures outpacing stronger revenues, leading to higher deficits than previously anticipated, Prime Minister Carney aims to balance the operating budget by 2027, a year earlier than initially planned.
As the inflation rate has been on the rise in recent months, with Canada’s annual inflation reaching 3.1% in September, the upcoming budget presentation gains significance. The Bank of Canada is expected to begin raising its policy rate in early 2027 to manage inflation expectations, with a target rate between 1% and 3%. The PBO anticipates energy price hikes to maintain elevated inflation rates in 2026, averaging 2.8%, before easing to 2.4% in 2027.