Canada recorded a C$370 million ($266.57 million) budget deficit in the first three months of fiscal 2026/27, sharply below the C$6.28 billion shortfall a year earlier. The improvement reflected year-to-date revenue growth of 9.8%, led by personal and corporate income taxes and GST collections, while program expenses rose 4.3% and public debt charges increased 6.1% on higher effective rates and a larger stock of marketable bonds. In June, the federal surplus narrowed to C$989 million from C$3.63 billion a year earlier, as higher program spending and debt charges weighed on the monthly result, including a C$2.1 billion rise in program expenses excluding net actuarial losses. The finance ministry reported the figures in its monthly Fiscal Monitor on an accrual basis. The stronger trajectory may afford Ottawa more fiscal flexibility, even as elevated debt-servicing costs remain a focus for markets and rating agencies.