Canada's Minister of Finance Francois-Philippe Champagne speaks in the House of Commons before tabling the federal budget, on Parliament Hill in Ottawa, Ontario, Canada November 4, 2025. REUTERS/Blair Gable

TORONTO (Reuters) -The Canadian government on Tuesday said its budget deficit for the 2025/26 fiscal year would almost double to C$78.3 billion from the C$42.2 billion it forecast last December. It blamed the deterioration on the damage done by U.S. tariffs and measures taken to counter them, while slashing growth forecasts for 2025 and 2026.

COMMENTS

JOSHUA GRUNDLEGER, DIRECTOR, SOVEREIGNS, FITCH RATINGS

"We downgraded them and have the federal rating at AA+ already so I think they can withstand a budget shock as well as an economic shock for that matter at this rating level over the near term."

"When we start to take a look at the medium term we'll have to look at the numbers ... How fast general government debt is going to rise over the medium term will answer some questions about what sort of pressure may materialize, but on a preliminary look the rating and the outlook probably remain broadly stable with this budget. But clearly from a fiscal perspective there is negative pressure there."

MATTHEW HOLMES, EXECUTIVE VICE PRESIDENT AND CHIEF OF PUBLIC POLICY, CANADIAN CHAMBER OF COMMERCE

"We're very pleased to see significant new defense spending to meet our 2% NATO commitments.

It's directionally, aspirationally going in the right direction. But we have to compare it against where global investment and capital can go and say 'is this enough to make Canada competitive again?'. And that part, I just can't say yet."

RICHARD FORBES, PRINCIPAL ECONOMIST, CONFERENCE BOARD OF CANADA

"Broadly there weren't any big surprises ... There was a big emphasis on investment that we've seen and then to balance some of that the government is aiming to increase efficiencies in the public sector. "

"At the Conference Board we've been saying that investment and investment competitiveness has been a big problem in the Canadian economy for a long time so the measures announced today ... we're optimistic it will help longer term, and ultimately it has to because the government is not projecting any return to balance or even a much shallower deficit than it currently has planned, rather they are just going to be hoping that the investments pay off and boost the economy longer term to help them return to balance."

VIVEK ASTVANSH, ASSOCIATE PROFESSOR OF QUANTITATIVE MARKETING AND ANALYTICS, MCGILL UNIVERSITY

"I am pleased and a bit relieved that the government is not trying to borrow more than what it can earn as revenue.

I am pleasantly surprised (the deficit) is not too high because I was expecting they will move it into 100 billions of dollars."

JOY NOTT, PARTNER, TRADE AND CUSTOMS, KPMG

"The main focus of trade in this particular budget, unlike previous budgets, is the focus on diversifying markets.

This particular budget is making concrete moves to put trade missions in place with Global Affairs Canada, to bring Canadians to Europe (and) to use that huge trade agreement with Europe, which, in my view, is greatly underutilized."

(Reporting by Fergal Smith and Nivedita Balu; Editing by Caroline Stauffer)