Federal Budget 2025-26
Where Your Tax Money Goes
$580.9 billion in spending. See every dollar.
$580.9B
Total Federal Expenditure
Last updated: January 2026 · Source: PBO, Treasury Board
Total Spending
$580.9B
Budgetary expenditures
Total Revenue
$507.5B
Tax collections
Deficit
$78.4B
New borrowing required
Spending by Type
60.5%: Payments to provinces, individuals, and organizations
29.4%: Government operations and capital costs
10.1%: Interest payments that provide NO services to Canadians
Largest Federal Programs
| Program | Amount |
|---|---|
Elderly Benefits (OAS/GIS) Old Age Security, GIS, Allowance | $85.5B |
Personnel Costs Federal employee wages & benefits | $71.1B |
National Defence Including NATO 2% commitment | $62.7B |
Canada Health Transfer Healthcare funding to provinces | $54.7B |
Debt Interest Payments to bondholders | $49.1B |
Indigenous Services ISC + Crown-Indigenous Relations | $41.1B |
$49.1 Billion in Debt Interest
One in ten federal dollars goes to debt interest. Money paid to bondholders that provides absolutely no services to Canadians. This is more than we spend on:
- ✕Defence Main Estimates ($35.7B)
- ✕Indigenous Services Canada ($20.5B)
- ✕Employment Insurance benefits ($26.7B)
Equalization Payments: $26.2B
Federal equalization transfers $26.2 billion from "have" provinces to "have-not" provinces. Alberta, Saskatchewan, and British Columbia receive $0.
| Receiving Province | Amount | Share |
|---|---|---|
| Quebec | $13.567B | 53.6% |
| Manitoba | $4.689B | 18.5% |
| Nova Scotia | $3.465B | 13.7% |
| New Brunswick | $3.123B | 12.3% |
| PEI | $0.666B | 2.6% |
| Ontario | $0.546B | 2.2% |
| Newfoundland | $0.113B | 0.4% |
Quebec alone receives 53.6% of all equalization payments: $13.567 billion in 2025-26.
Federal Workforce: $71.1B
Federal personnel costs (wages and benefits) total $71.1 billion, the largest component of operating spending. This is projected to rise to $76.2B by 2029-30.
Public Servants (estimated)
~368,000
Avg Cost per Employee
~$193,000
Includes salary, pension contributions, and benefits.
Calculate Your Personal Contribution
Enter your income to see exactly how much you pay toward each spending category: elderly benefits, debt interest, equalization, and more.
See Where Your Money Goes→Frequently Asked Questions
Where do Canadian taxes go?
Federal taxes fund transfer payments (60.5%, $294.8B), government operations (29.4%, $143.1B), and debt interest (10.1%, $49.1B). The largest single programs are Elderly Benefits ($85.5B), Personnel Costs ($71.1B), Defence ($62.7B), and Health Transfers ($54.7B).
How much does Canada spend on healthcare?
The federal Canada Health Transfer is $54.7 billion for 2025-26. This is transferred to provinces/territories for healthcare delivery. Total Canadian healthcare spending (federal + provincial) exceeds $330 billion annually.
How much does Canada spend on defence?
Canada is spending $62.7 billion on defence in 2025-26, a significant increase to meet the NATO 2% of GDP target announced in June 2025. This includes Main Estimates ($35.7B), Supplementary Estimates ($8.2B), and other defence-eligible costs.
What is the federal deficit for 2025-26?
The federal deficit for 2025-26 is projected at $78.3 billion. Total spending is $580.9 billion while revenue is only $507.5 billion, so the government borrows $78.3B to cover the gap.
How much does Canada spend on Indigenous services?
Combined spending on Indigenous Services Canada ($20.5B) and Crown-Indigenous Relations ($20.6B) totals $41.1 billion. This works out to approximately $24,000 per registered status Indian based on 1.7 million registered individuals.
How much does the government spend on its employees?
Federal personnel costs (wages and benefits) are $71.1 billion annually, making it the largest component of operating spending. This is projected to rise to $76.2 billion by 2029-30.