Ottawa recorded a $10.6-billion deficit in March and now expects the final deficit figure for 2017-18 will be in line with the $19.4-billion estimated in the February budget.
The Finance Department released its monthly Fiscal Monitor report Friday, which tracks federal spending and revenue. The latest report covers the full 12 months of the 2017-18 fiscal year which ended March 31, but further adjustments will be made to the figures before they are finalized in the fall public accounts.
The deficit reported for March was almost identical to the one recorded for the same month a a year earlier.
For the 2017-18 fiscal year, the government recorded a deficit of $16.2-billion in Friday’s report, however it noted that that the final figure is expected to rise after a $4.2-billion budget pledge to enhance veterans’ benefits is included.
“Taking year-end adjustments into account, results to date are broadly in line with a $19.4-billion deficit projected in budget 2018,” the report states.
Finance Minister Bill Morneau’s February budget projected five more years of deficits, declining in size from $18.1-billion in 2018-19 to $12.3-billion in 2022-23. Mr. Morneau has not announced a firm date for erasing the deficit, even though Conservative MPs have repeatedly asked him to set a timeline.
The Liberal Party’s 2015 election platform had promised to run short-term deficits of no more than $10-billion a year before returning to balance in 2019. Mr. Morneau has since revised his fiscal plan to say that Ottawa will focus on reducing the federal debt as a percentage of GDP. The budget states that the debt-to-GDP ratio is projected to decline from 30.4 per cent in 2017-18 to 28.4 per cent in 2022-23.
Friday’s report provides a sense of federal spending and revenue trends for the year.
Government revenues rose by 5.4 per cent to $305.9-billion as revenues from personal, corporate, sales and excise taxes were all up.
Program expenses grew by 3.5 per cent to $297.8-billion. The main increases were in transfers to elderly benefits, children’s benefits and transfers to other levels of government.
Public debt charges were $24.3-billion for the year, which is a 0.2-per-cent decrease from the same period a year earlier.