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By Courtney Tower
OTTAWA (MNI) - Canada's federal government budgetary deficit for fiscal
year 2016-17 was C$17.8 billion, up from a deficit of C$1.0 billion the year
before but lower than the Justin Trudeau government had planned in its budget
last March, the Finance Department reported Tuesday.
In their 2015 winning election campaign, the Liberal Party of Canada and its
leader, Trudeau, had promised to go into deficit spending to stimulate a lagging
economy. The previous Conservative government, after consecutive years of
deficits, had posted a C$1.9 billion surplus in FY2014-15, before the Liberals
took over. The Finance Department's annual report on Tuesday said the C$17.8
billion deficit in FY2016-17, the first full-year in which new policies could be
reflected, turned out below the -C$23.0 billion the government had estimated in
its budget last March.
In the year ended last March 31, revenues were down 0.7% or by C$2 billion while
public expenses were up C$16.2 billion on an array of increases paid out in
social payments to persons from children to seniors and major transfers to other
levels of government for health, education and other programs. Reduced public
debt charges of C$1.3 billion or 5.2%, reflecting lower interest rate charges on
interest-bearing debt, brought the expenses figure down to an increase of C$14.8
billion or 5.0% from the previous year.
The federal debt (total liabilities minus total assets) reached C$631.9 billion
at last March 31. The federal debt-to-GDP ratio was 31.2%, up 0.2 percentage
points from FY2015-16. Federal debt increased by C$15.9 billion in the year.
Canada's total government net debt-to-GDP ratio, which takes in the net debt of
the federal, provincial/territorial, and local governments, "stood at 27.6% in
2016," the report said, the lowest level among the Group of Seven countries,
based on International Monetary Fund statistics.
The budgetary balance was, presented as a percentage of GDP, a deficit of 0.9%
of GDP in FY2016-17 compared with a deficit of 0.0% of GDP the year earlier.
Although revenues were down somewhat, they were 0.5% higher than had been
expected in the March budget, due primarily to larger-than-projected tax
revenues, as the economy began improving early in the year, the report said.
Program expenses were C$3.7 billion lower than had been expected.
The financial requirement, the difference between cash coming in to the federal
government and the cash going out, was C$27.5 billion in 2016-17 versus one of
C$19.5 billion in 2015-16.
--MNI Ottawa Bureau; +1 613 869-0916; email: firstname.lastname@example.org