Finance Minister François-Philippe Champagne has announced that the government will present its upcoming budget on November 5. This will mark the second budget during Prime Minister Mark Carney’s term and the second consecutive budget to be unveiled in the autumn. Traditionally, the federal budget was introduced in the spring, but Carney opted for a fall tabling last year.
Champagne revealed the timing of this year’s budget during Tuesday’s question period. The government’s spring economic update in April showed a reduced deficit for the previous fiscal year compared to the initial budget forecast. The original projection for the 2025-2026 deficit was $78.3 billion, but the update in April estimated it at $66.9 billion, partly due to rising oil prices.
On the same day as Champagne’s announcement, the Parliamentary Budget Office (PBO) revised its economic growth outlook for this year and the next. The PBO now anticipates real GDP growth of 0.9% for this year and 1.5% in 2027, down from earlier estimates due to trade uncertainties and additional measures.
The PBO also adjusted its deficit projections, forecasting a $63.3 billion deficit for the 2026-2027 fiscal year, peaking at $70.2 billion in 2027-2028. Despite the updated forecasts, the PBO highlighted that deficits are expected to be $3 billion higher annually on average over 2026-2031 compared to previous estimates.
Moreover, Carney had aimed to balance the operating budget by 2028 but now plans to achieve this balance in 2027, a year earlier. However, the PBO’s recent report suggests that the operating balance may not be reached until fiscal 2029-2030.
As inflation rates have been rising, with Canada’s annual inflation reaching 3.1% in September, the upcoming budget will be presented against this backdrop. StatsCan attributed the increase to higher fuel prices, with consumer prices excluding gasoline rising by 2.2% year-over-year in September. The PBO expects the Bank of Canada to raise its policy rate in early 2027 to manage inflation expectations, targeting 2.75% by mid-year. The watchdog anticipates elevated annual inflation rates in 2026 before a slight decrease in 2027, aligning with the Bank of Canada’s target rate of 1-3%.