Liberal Update Projects $66.9B Deficit for 2025-26

OTTAWA - The Liberal government released its 2026 spring economic update on Tuesday, projecting a federal deficit of $66.9 billion for the 2025-26 fiscal year, $11.5 billion lower than the estimate in the previous Budget 2025.

The update forecasts the deficit declining gradually to $53.2 billion by the 2030-31 fiscal year. Officials attributed the improved 2025-26 outlook to higher-than-expected revenues, including an average annual increase of $7.2 billion over prior projections, and stronger nominal GDP growth averaging $31 billion more per year from 2025 to 2029 compared with earlier estimates. Canada's net debt-to-GDP ratio stands at 10.2 per cent, well below the G7 average of 101.8 per cent, according to the document.

New measures outlined in the update carry a net cost of $37.5 billion over six years, with 45 per cent directed toward addressing cost-of-living pressures and the housing shortage. Key initiatives include $6 billion over five years for Team Canada Strong, aimed at recruiting and training 80,000 to 100,000 workers in skilled trades to support housing, infrastructure, resource development and construction. The government also pledged $25 billion in seed funding...