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Finance Minister Bill Morneau speaks with the media in Ottawa, on Feb. 18, 2020.

Adrian Wyld/The Canadian Press

The federal deficit stood at $11-billion with three months left in the current fiscal year, according to monthly tracking figures released Friday.

The Finance Department’s fiscal monitor report also showed the federal government ran a $782-million surplus in December, down sharply from the $2.5-billion surplus in December, 2018.

Over the first nine months of the current fiscal year, which ends March 31, the deficit stood at $11-billion. By way of contrast, the federal books were in a small surplus position of $324-million during the same nine-month period of 2018, which ended with a $14-billion deficit.

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The latest figures come as Finance Minister Bill Morneau is preparing the government’s first budget since the fall federal election. A date has not yet been announced, but the budget is frequently released in late March.

Prime Minister Justin Trudeau will also host a First Ministers Meeting in two weeks that will include discussions of federal transfer programs, the economic impact of rail disruptions and protests by Indigenous groups and their supporters over a pipeline in Northern B.C. and the broader issues of climate change and natural resource development.

Mr. Morneau released a fiscal update in December that said the deficit for the current year is projected to be $26.6-billion, followed by $28.1-billion in 2020-21 and $22.1-billion in 2021-22.

Those projections did not account for many of the Liberal Party’s campaign promises, which means the budget is likely to show larger-than-forecasted deficit figures over the short term.

While the government has abandoned plans to set a firm date for eliminating the deficit, Mr. Morneau has pledged to keep federal debt headed downward when measured as a percentage of GDP.

The December update showed the federal debt-to-GDP ratio climbing slightly this year, to 31 per cent – up from 30.8 per cent in 2018-19 – then declining gradually to 29.1 per cent by 2024-25.

On Thursday, Parliamentary Budget Officer Yves Giroux released his annual report on the fiscal sustainability of federal and provincial government spending.

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The report concluded that the fiscal landscape has improved slightly this year for Ottawa and the provinces as a whole, however, most provinces are not in a sustainable position. The report defines sustainability as a financial plan that would stabilize a government’s net debt-to-GDP ratio over the long term.

By that measure, the PBO says federal finances are sustainable and could even absorb permanent spending hikes or tax cuts of as much as $41-billion a year. If no new spending or tax cuts are introduced, the PBO says, federal finances are on track to see the federal debt-to-GDP ratio drop to zero by 2047.

But “in contrast to the federal government, subnational governments will face ever-increasing health-care costs due to population aging,” the PBO stated.

For provinces as a whole, the PBO said it would take tax increases or spending cuts totalling $6-billion a year in order to reach a sustainable level.

Quebec, Nova Scotia, Ontario and British Columbia are already on a sustainable path, the PBO said, but “all other provinces and territories have current fiscal policies that are not sustainable over the long term.”

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