The Parliamentary Budget Office (PBO) estimates that the federal government’s budget deficit for 2026 will be $4.6 billion higher than it projected in its spring economic update, and that economic growth will also be lower.
The PBO’s June 4 Economic and Fiscal Outlook, which outlines its 2026 projections for economic growth, government spending, and inflation, comes a week after Canada entered a technical recession due to two consecutive quarters of GDP contraction.
While the federal government’s April update had projected a $66.9 billion deficit for the 2025-26 fiscal year, the PBO’s June 4 Economic and Fiscal Outlook forecasts $72 billion “as modest revenue growth is outpaced by growth in expenses.”…