Canada's budget deficit over first three months of 2026/27 shrinks to C$370 million

OTTAWA, August 28 (Reuters) - Canada recorded a sharply lower C$370 million ($266.57 million) budget deficit for the first three months of the 2026/27 fiscal year as government expenditures grew slightly faster than revenues, the finance ministry said on Friday. By comparison, the deficit in the same period a year earlier had been C$6.28 billion, it said in a statement. Program expenses rose 4.3% on increases across most categories of spending. Public debt increased by 6.1% reflecting reflecting higher average effective interest rates on an increased stock of marketable bonds and higher inflation adjustments on some other bonds, offset in part by lower short-term interest rates on treasury bills, the ministry said. Year-to-date revenues grew by 9.8%, largely reflecting higher income from personal and corporate income tax revenues and GST revenues. On a monthly basis, Canada posted a surplus of C$989 million in June, compared to a C$3.63 billion surplus in June 2025. ($1 = 1.3880 Canadian dollars) (Reporting by Promit Mukherjee, editing by Maria Cheng) ((Reuters Ottawa bureau; maria.cheng@tr.com)) Keywords: CANADA BUDGET/