IMF lauds Canada’s fiscal direction, but says guardrails should be strengthened

Ottawa's 2025 federal budget, tabled in November, showed a $78.3-billion deficit this year, with no path back to balance over the next five years.

The International Monetary Fund says that Canada’s fiscal policy is moving in the right direction, but suggested that the federal government should strengthen its budgetary guardrails and push further on regulatory reforms.

In its annual review of Canadian economic policy, published Friday, the IMF said that the federal government’s emphasis on public investment over operational expenditures in its fall budget is welcome.

The budget , released last month, ramped up spending on the military, housing and transportation infrastructure while booking around $13-billion in annual expenditure reductions on government operations.

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