S&P/TSX Composite Index

Brief: Bank of Canada's April MPR Sees Inflation Peaking in April At About 3%, Returning to 2% Target in Early 2027

Bank of Canada Adds It Sees Inflation Remains Around 2% Over the "Projection Horizon"

Canada's Higher GDP Outlook Supports Strong Credit Rating, Lower Debt Services Costs, Says Desjardins

The 2025-26 fiscal year (FY26) deficit was still a substantial $66.9 billion, but came in lower than the $78.3 billion projected in Budget 2025, said Desjardins after the government's figures late Tuesday.A big part of the near-term improvement in the deficit was a better-than-expected economic performance, which is beyond the federal government's control, noted the bank. It is also something that may not be repeated.Despite this improved starting point and economic outlook, the deficit forecast going forward is essentially unchanged from Budget 2025, pointed out Desjardins.One of the major benefits of the upwardly revised nominal gross domestic product outlook is that it reduced the size of future deficits as a share of GDP, even if those deficits were largely unchanged from Budget 2025, stated the bank.The projected path for the federal debt-to-GDP ratio is also "meaningfully" lower, despite the path of the federal debt not changing all that much, added Desjardins.This will help to keep Canada in a better fiscal position than many of its advanced economy peers, supporting a strong credit rating and comparatively lower debt services cost, according to the bank.

Bank of Canada Says Based On Assumption Oil Prices Will Ease, Inflation Forecast to Come Down to 2% Target Early Next Year

Brief: Bank of Canada's April MPR Sees GDP Growth at 1.6% in 2027 Vs. January View of 1.5%; Sees 2028 GDP Growth at 1.7%

Bank of Canada Says CPI Inflation Will Likely Rise Further in April to about 3%

Brief: Bank of Canada's April Monetary Policy Report Sees GDP Growth at 1.2% in 2026 Vs. January View of 1.1%

Bank of Canada As Expected Maintains Policy Rate at 2.25%

TSX Down Another Near 70 Pts Ahead of Bank of Canada Rates Decision and Update; Index Adding to Four Successive Days of Losses

Nasdaq 100 Futures Up Near 0.4% and S&P Futures Up Less Than 0.1%

S&P Futures Little Changed Ahead of US Fed Rates Decision

Update: Canada's Federal Gov't Projects a Smaller Deficit For FY2025-26 Than Previously Seen

(Updates with BMO commentary in the fifth to seven paragraphs inclusive)Canada's federal government now projects a deficit in fiscal year 2025-26 of C$66.9 billion, down from a prior forecast of $78.3 billion, reflecting improved economic growth, it said in a spring economic update Tuesday.The deficit is set to gradually decline to C$56.2 billion by FY29-30, the government said.An extra $60.3 billion in revenues has allowed the government to add $37.5 billion in spending, it addedProjected GDP Growth is 1.1% in 2026, 1.9% in each of the next three years, and 1.8% in 2030, the governing Liberals said.BMO in an overnight note said the federal government "may have revamped its budget cycle, but it kept the same theme going: higher spending washing out better revenues, leading to persistent deficits".BMO noted the federal government is projecting a $65 billion shortfall for FY26-27, amounting to just under 2% of GDP. "That's only a touch better than last year's estimate, now pegged at $67 billion, with little progress expected as deficits remain sizeable through FY30-31," it said.The bottom Line for BMO: "The Canadian economy has held up better than expected at the time of the Fall budget. However, the resulting stronger revenues have been offset by higher spending commitments with no path to balance in sight."

Small Firms Are "Payroll Intensive", So Cut In CPP Premium Rate from 9.9% to 9.5% Will Put $3B "Back Into Pockets" of Employees and Payroll Budgets of Employer, says CFIB

Among "Positive Measures" Are CPP Rate Cut and Changes In Trades Training and Employee Ownership, adds CFIB

Federal Spring Economic Update "Not Enough" To Halt "Alarming" Loss of Small Businesses across Canada, says Canadian Federation of Independent Business

Update: Canada's Federal Gov't Projects a Smaller Deficit For FY2025-26 Than Previously Seen

(Updates with revenue data in third paragraph.)Canada's federal government now projects a deficit in fiscal year 2025-26 of C$66.9 billion, down from a prior forecast of $78.3 billion, reflecting improved economic growth, it said in a spring economic update Tuesday.The deficit is set to gradually decline to C$56.2 billion by FY29-30, the government said.An extra $60.3 billion in revenues has allowed the government to add $37.5 billion in spending, it addedProjected GDP Growth is 1.1% in 2026, 1.9% in each of the next three years, and 1.8% in 2030, the governing Liberals said.

Canada's Federal Gov't Projects a Smaller Deficit For FY2025-26 Than Previously Seen

Canada's federal government now projects a deficit in fiscal year 2025-26 of C$66.9 billion, down from a prior forecast of $78.3 billion, reflecting improved economic growth, it said in a spring economic update Tuesday.The deficit is set to gradually decline to C$56.2 billion by FY29-30, the government said.Projected GDP Growth is 1.1% in 2026, 1.9% in each of the next three years, and 1.8% in 2030, the governing Liberals said.

TSX Closer: The Index Falls for a Fourth Day Ahead of the Spring Economic Update

The Toronto Stock Exchange closed lower on Tuesday, falling for a fourth-straight session on fading hopes for a deal to end to the Iran war, while investors awaited a spring economic update from the federal government for guidance on projected deficits over the short and medium term.The S&P/TSX Composite Index closed down 233.85 points, or 0.69% to 33,584.34, even with most sectors higher, led by Energy, up 2.4%, on elevated oil prices. But the biggest movers were also decliners, with Info Tech, down 4.4%, and Base Metals, down 3.6%, not helped by deflated gold prices.According to FactSet, the TSX going in to today was down 136.92 points or 0.40% over the three prior trading days. But month-to-date it was up 3.20% and year-to-date it was up 2,105.43 points or 6.64%.Canada's federal government will release its fiscal update just as the markets close at 4:00 p.m. ET on Tuesday, and Bank of Montreal in its morning note said it will be looking for it to showcase "better-than-expected" deficits.Robert Kavcic, senior economist at BMO Capital Markets, said: "There looks to be some fiscal upside compared to the $65.4 billion deficit estimate for FY26/27 heading into this update. Prior to the oil shock, finances were clearly running better than planned. The deficit was $25.5 billion for the April-to-February period (the first 11 months of the fiscal year), only slightly worse than $19.2 billion a year ago. While year-end adjustments can be hefty, there also looks to be meaningful upside to the estimated $78.3 billion shortfall for FY25/26 which could carry over to the coming fiscal year. The three main components were tracking better than budget estimates, with revenues rising modestly (versus expectations of a drop), interest charges drifting lower (versus expectations of a small rise), and program spending running below a budgeted rise of almost 7%."This extra room is likely why Ottawa hasn't been shy about rolling out some new measures ahead of this update. That includes the temporary removal of the excise tax on fuel, which will cost about $2.4 billion; a more generous GST rebate; as well as HST relief on new housing construction and the infrastructure deal with Ontario."Of commodities today, West Texas Intermediate closed higher, with the U.S. benchmark price flirting with the US$100 per barrel for the first time in three weeks as hopes for an end to the war on Iran fade and the Strait of Hormuz remains closed. WTI crude oil for June delivery closed up US$3.56 to settle at US$99.93 per barrel as it failed to hold the US$100 mark it topped during the session, while June Brent oil was up US$2.58 to US$110.81.But gold traded at a month low by midafternoon Tuesday as rising oil prices threaten to boost inflation and raise interest rates, while the dollar and treasury yields moved higher. Gold for June delivery was down US$82.80 to US$4,610.90 per ounce, the lowest since March 30.

Canadian Federal Govt Deficit Projections Little Changed Over Five Year Period

Canadian Federal Govt Projects Deficit in FY25-26 of C$66.9 Billion, Vs. Prior Forecast of C$78.3 Billion