Tag Archives: budget

For the 2025–26 fiscal year, the Canadian federal budget projects total spending of $585.9 billion

Published April 2, 2026

This represents a significant increase from previous years, driven largely by new military outlays, housing initiatives, and rising debt-servicing costs.

The following table breaks down the major spending categories by dollar amount and their approximate percentage of the total budget.

Federal Spending Breakdown (FY 2025–26)

CategoryAmount ($ Billions)% of Total Budget
Direct Program Expenses$257.043.9%
Major Transfers to Persons$158.027.0%
Major Transfers to Provinces & Territories$110.318.8%
Public Debt Charges (Interest)$55.69.5%
Net Actuarial Losses$5.00.8%
Total Federal Spending$585.9100%

Key Line Items and Sub-Categories

To provide a more granular view, here are the specific costs for the most significant programs within those major categories:

1. Major Transfers to Persons ($158.0B)

  • Elderly Benefits (OAS/GIS): $85.5 billion (14.6%). This remains the largest single program expense due to Canada’s aging demographic.
  • Canada Child Benefit (CCB): $31.2 billion (5.3%).
  • Employment Insurance (EI): $27.8 billion (4.7%).
  • Canada Disability Benefit: $13.5 billion (2.3%).

2. Major Transfers to Other Levels of Government ($110.3B)

  • Canada Health Transfer (CHT): $54.7 billion (9.3%).
  • Fiscal Equalization: $27.3 billion (4.7%).
  • Canada Social Transfer (CST): $17.1 billion (2.9%).

3. Direct Program Expenses ($257.0B)

This category covers the operations of all federal departments and new strategic investments.

  • National Defence: $35.2 billion (6.0%). Spending has ramped up following the 2025 Arctic Sovereignty mandate.
  • Indigenous Services: $25.2 billion (4.3%).
  • Build Canada Homes Initiative: $13.0 billion (2.2%). A key pillar of the 2025-26 fiscal strategy to address housing supply.

Fiscal Health Indicators (2026 Context)

As an active participant in the Canadian markets, you may find the following “bottom-line” figures relevant to the current trading environment:

  • Budgetary Revenues: $507.5 billion.
  • Annual Deficit: $78.3 billion (restated at 2.5% of GDP).
  • Federal Debt-to-GDP: 42.4%.
  • Interest Outlook: Public debt charges are now consuming nearly 10 cents of every dollar the government collects, which is a major factor in the current “hard-nosed” approach to departmental budget cuts (targeting a 10% reduction in the federal workforce by 2028).