Economists say Finance Minister Bill Morneau's fall projections appear to be holding up as he prepares to release his 2017 budget.
The federal government ran a $3.3-billion deficit in November and has racked up $12.7-billion in red ink over the first eight months of the year, according to Friday's release of Finance Canada's monthly fiscal monitor report.
For comparison with last year, the federal government ran a $382-million surplus in November, 2015, and the year-to-date bottom line at that time was a surplus of $1-billion.
The monthly tracking figures can be volatile and large adjustments are common toward the end of the fiscal year.
The House of Commons is scheduled to resume sitting on Monday after a six-week recess and Mr. Morneau is expected to release the 2017 budget in the coming weeks. The budget will include Ottawa's latest fiscal projections.
The government's Nov. 1 fiscal update projected a deficit of $25.1-billion in the current 2016-17 fiscal year, followed by deficits of $27.8-billion, $25.9-billion, $19.3-billion, $16.8-billion and $14.6-billion over the next five years.
Three chief economists – Randall Bartlett of the University of Ottawa's Institute of Fiscal Studies and Democracy, Doug Porter of BMO and Avery Shenfeld of CIBC Capital Markets – all said Friday that based on economic trends, the Nov. 1 fiscal update remains a reasonable guide as to the state of federal finances heading into the 2017 budget.
Mr. Porter said there are some indications that the bottom line may be better than what had been projected in November.
"We haven't seen enough to seriously knock Ottawa's finances off track in either direction," he said. "Having said that, with oil prices gradually firming, and given the fiscal results so far, there does seem to be some room for Ottawa to come in with deficits below forecast – if they were so inclined to push in that direction."
Friday's report from Finance Canada said the higher deficit figures this year are largely due to higher spending on transfers to provinces, municipalities and to Canadians directly via elderly benefits and the new Canada Child Benefit.
Finance Canada also released a report in late December that included long-term fiscal projections. According to that report, annual deficits will not be erased until after 2050. The report's projections show that even with decades of deficits, the federal debt as a share of GDP would shrink from 31.8 per cent this year to 21.7 per cent in 2050-51.