People walk on Parliament Hill in Ottawa, in a file photo. The Canadian Press/Sean Kilpatrick
News Analysis
Balanced budgets, once considered the default goal of governments, increasingly appear to be the exception in Canada.
All eight provinces that have tabled 2026-27 budgets so far remain in deficit. Half of them—from Progressive Conservative-led Ontario to NDP-governed British Columbia, Liberal-dominated New Brunswick, and even resource-rich Alberta—forecast deficits will worsen from their previous budgets. The federal government, meanwhile, doesn’t expect a balanced budget for years.
“For the time being, balanced budgets are a thing of the past,” Lakehead University economics professor Livio Di Matteo said in an interview.
This shift seems to follow a change in fiscal priorities: governments appear increasingly willing to tolerate persistent deficits as they respond to economic volatility and rising voter expectations for public services, even as economists warn that failure to save during boom years has left budgets exposed. And some observers warn that the problem is even worse than the headlines indicate.
