Federal program spending rose 9 per cent over first six months of fiscal year

Federal program spending increased by $12.4-billion – or 9 per cent – over the six-month period before Canadians went to the polls, according to a monthly tracking report released Friday by the Finance Department.

The report also showed the federal deficit stood at $5.8-billion for the first six months of the fiscal year that began April 1. That marked a deterioration from the $1.2-billion surplus reported over the same six-month period of the 2018-19 fiscal year.

The new results for September showed a deficit of $578-million that month, which was an improvement over the $1.4-billion deficit posted in September, 2018.

Finance Minister Bill Morneau has yet to announce a date for the fall fiscal update, which will reveal the government’s latest expectations for the size of the deficit this year and in future years.

The most recent government forecast was in the March budget, which estimated a deficit of $19.8-billion in the current fiscal year. The final deficit number for last year was $14-billion.

While the $5.8-billion deficit at the halfway point of the fiscal year might suggest that Ottawa is on track to post a smaller deficit than forecast, the recent pattern has been for Ottawa to post large one-month deficits in March at the end of the fiscal year.

Friday’s report shows that program expenses rose by $12.4-billion – or 8.6 per cent – over the April to September period this year. The report said the increases include higher transfers to other levels of government, higher personnel costs and general increases “across a number of departments.”

During that same six-month period this year, federal revenue increased by $6.1-billion – or 3.9 per cent.

The Liberal Party platform outlined a four-year agenda that starts with a $27-billion deficit in the 2020-21 fiscal year. The platform was silent on plans for the remaining months of the current 2019-20 fiscal year.

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