The Canadian federal government significantly increased its borrowing in 2025, reaching a net $118.9 billion on the credit market. This figure marks the highest level of borrowing in five years, according to data released by Statistics Canada. The surge in borrowing reflects the government's efforts to address various economic and social priorities.
Across all levels of government and corporations in Canada, a total of $242.5 billion in debt securities were issued in 2025. This is a decrease from the $281.7 billion issued in 2024. Provincial and territorial governments issued $79.8 billion in debt securities, a similar amount to the $83 billion from the previous year. A significant portion, nearly half, of these funds were raised on foreign markets, a notable increase from the 20% reported in the previous year.
The borrowing activity was particularly pronounced in the fourth quarter of 2025, with governments and corporations borrowing a net $55.9 billion. While this was down from the $88.5 billion in the previous quarter, government sector led the borrowing with the majority in long-term instruments. The federal government's net issuances in the fourth quarter decreased to $18.5 billion, the lowest quarterly amount of the year. Non-financial corporations issued $64.4 billion in debt securities in 2025. Meanwhile, financial corporations, particularly chartered banks, repaid a net $23.4 billion.
The funds raised were primarily used to support debt refinancing, investment, and acquisition activities. The increase in borrowing aligns with the federal government's projected deficit of $78.3 billion for the 2025-2026 fiscal year. The Canadian government aims to reduce the federal deficit to $56.6 billion by 2029-2030.
