A national small business group is raising concerns about Canada’s growing federal deficit and debt, warning it could pose risks to the country’s long-term economic stability.
In a report released Thursday, the Canadian Federation of Independent Business said the federal deficit is projected to reach $78 billion in the 2025–26 fiscal year, with no clear plan to return to a balanced budget.
The organization said Ottawa has run deficits in 12 of the past 13 budgets, while federal debt has more than doubled over the past decade to more than $1.26 trillion.
Jasmin Guénette, CFIB’s vice-president of national affairs, said small business owners are increasingly concerned about government spending and its potential impact.
“Small business owners are tired of watching federal spending spiral out of control while being told to absorb costs at every turn,” Guénette said in a statement.
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The report notes that annual interest payments on the federal debt are expected to reach $53.4 billion, an amount that exceeds total revenue collected from the federal goods and services tax.
Debt servicing costs are projected to rise further, reaching more than $76 billion annually by the end of the decade, driven by higher borrowing and interest rates.
The CFIB said most small business owners oppose raising taxes to address the deficit and instead called on the federal government to implement spending controls and outline a clear path to balance the budget.
Among its recommendations are legislated spending limits, reductions in the size of the federal public service and the sale of certain government assets.
The group also urged Ottawa to avoid introducing new or expanded social programs while deficits remain high.
Juliette Nicolaÿ, a policy analyst with the organization, said governments across Canada are facing similar fiscal pressures.
“The only way out of this enormous debt is by restoring fiscal responsibility and setting a path back to balanced budgets,” she said.
The report comes as the federal government prepares its next economic update, with business groups and economists closely watching for signs of fiscal restraint.
