OTTAWA, July 31 (Reuters) - Canada recorded a much smaller budget deficit over the first two months of the 2026/27 fiscal year compared to a year earlier as revenues grew faster than expenses, the finance ministry said on Friday.
The combined deficit for April and May was C$1.36 billion compared to C$9.91 billion a year earlier.
Revenues over the two months grew by 15.5% on increases in most major categories - primarily gains in income and excise taxes - while expenses posted a more modest 3.7% gain.
Public debt charges increased by 3.3%, largely reflecting higher effective average interest rates on an increased stock of marketable bonds.
The May deficit was C$0.31 billion, compared to a C$2.20 billion shortfall in May 2025.
The finance ministry also released the data for April, showing a C$1.05 billion deficit compared to a C$7.71 billion shortfall in April 2025.