Finance Minister François-Philippe Champagne has announced that the government will present its latest budget on November 5th. This budget will mark the second fiscal plan under Prime Minister Mark Carney and the second consecutive budget to be unveiled in the fall. Traditionally, the federal budget was introduced in the spring, but Carney made the decision to switch to a fall release last year.
Champagne revealed the timing of this year’s budget during Tuesday’s question period. The government’s spring economic update, which was presented in April, showed a reduced deficit for the previous fiscal year compared to initial forecasts. Initially, the deficit for 2025-26 was projected at $78.3 billion, but the April update revised it down to $66.9 billion, partly due to the surge in oil prices.
On the same day as Champagne’s announcement, the Parliamentary Budget Office (PBO) adjusted its economic growth outlook for this year and next. The PBO now forecasts real GDP growth of 0.9% for this year and 1.5% in 2027, down from earlier estimates. Annette Ryan, the parliamentary budget officer, attributed the revision to “additional trade measures and ongoing uncertainty” following trade talks between Canada and the U.S.
The PBO also revised its deficit projections, expecting a deficit of $63.3 billion for the 2026-27 fiscal year, peaking at $70.2 billion in 2027-28. The deficits are projected to be $3 billion higher per year on average from 2026-27 to 2030-31 compared to the June outlook, mainly due to increased spending measures.
Despite the latest forecasts not indicating a balanced budget overall, Prime Minister Carney aims to achieve an operating balance by 2027, a year earlier than originally planned. However, the PBO’s report suggests that Ottawa may reach this goal a year later, in fiscal 2029-30, citing discrepancies in defining operational versus investment spending.
The upcoming budget presentation coincides with a rise in the inflation rate in recent months. Canada’s annual inflation rate reached 3.1% in September, with higher fuel prices being a contributing factor. The Bank of Canada is expected to begin raising its policy rate in early 2027 to manage inflation expectations.
Looking ahead, the PBO anticipates that elevated energy prices will sustain inflation at around 2.8% in 2026 before easing to 2.4% in 2027. The Bank of Canada’s inflation target range is between 1% and 3%.
This budget announcement comes amid evolving economic conditions and fiscal challenges, setting the stage for critical decisions and policy directions in the upcoming financial plan.