Federal government posts $14B shortfall in 2018-19

It’s the third straight year of a shortfall larger than $10 billion

Liberal Leader Justin Trudeau makes a campaign stop in St. John’s on Tuesday, Sept. 17, 2019. THE CANADIAN PRESS/Sean Kilpatrick

The federal government ran a $14-billion deficit in 2018-19, according to its latest annual financial report – the third year in a row with a shortfall bigger than $10 billion.

The deficit for the fiscal year that ended March 31 was $900 million smaller than the government projected in last spring’s federal budget, however.

Revenues in 2018-19 expanded by $21 billion — or 6.7 per cent — compared to the previous year, said the report released Tuesday.

The government’s revenue ratio, which is total revenues as a percentage of the size of the economy, increased last year by 15 per cent to reach its highest level since before the financial crisis in 2007-08. The growth in the ratio, which was 14.5 per cent in 2017-18, was mostly due to growth in personal and corporate income tax revenues and other taxes, the report said.

The revenue gain was partially offset by an increase of $14.6 billion — or 4.7 per cent — in program expenses and an increase of $1.4 billion — or 6.3 per cent — in public debt charges.

The 2018-19 deficit follows two straight $19-billion shortfalls, and the annual financial numbers haven’t shown a surplus since 2006-07.

Overall, the federal debt increased to $685.5 billion at the end of 2018-19. The debt-to-GDP ratio — a measure of how burdensome the national debt is — fell to 30.9 per cent from 31.3 per cent in 2017-18, the report shows.

The state of federal finances has already been the subject of political debate during the election campaign as parties argue whether the government should make an effort to balance the federal books — and how quickly.

In the three full fiscal years since the Liberals came to power, the federal government has posted $52 billion worth of shortfalls even though the economy has had a solid run of growth.

The Liberals won the 2015 election on a platform that promised annual deficits of no more than $10 billion and to return to balance by 2019.

After taking office, the Liberals abandoned the pledge and argued even larger deficit-driven investments were needed to improve Canada’s long-term economic growth. The government shifted its focus instead to reducing the net debt-to-GDP ratio each year.

The Conservatives have long attacked the Liberals for this, accusing them of borrowing today on the backs of future generations.

Ahead of next month’s election, the Liberals have laid out projections calling for five more years of deficits of at least $10 billion.

RELATED: NDP’s Singh seeks urban support with housing billions, avoids deficit questions

Conservative Leader Andrew Scheer is promising to pull Canada out of the red in about five years.

Jagmeet Singh’s NDP, which promised balanced books in each of the last several election campaigns, no longer has a timetable to balance the books. Instead, it’s focusing on lowering the debt-to-GDP each year.

Green Leader Elizabeth May has committed to returning Canada to budgetary balance in five years.

Maxime Bernier’s new People’s Party of Canada is the only political party that’s promised a quick path to balanced books — within two years.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

V.I. Raiders win, wait to find out playoff foe

Raiders defeat Valley Huskers 13-6 in BCFC regular-season finale

BC Ferries crew member taken to hospital after getting struck by bow doors

Two sailings between Horseshoe Bay and Departure Bay were cancelled

City of Nanaimo staff recommend delaying Cranberry Connector project to 2027

Proposed road would link Cranberry Road with Tenth Street

Nanaimo firefighters train to save themselves

Fire Ground Survival Program teaches firefighters to stay alive when structure fires turn perilous

LETTER TO THE EDITOR: Election debate silenced voices

Forum at Beban Park should have included all candidates, says letter writer

ELECTION 2019: It’s so close, it could come down to who turns out to vote

Black Press Media’s polling analyst on the origins of predictive seat modelling in Canada

Jack’s Devils beat Quinn’s Canucks 1-0 in NHL brother battle

New Jersey youngster scores first career goal against Vancouver

Two charged after owner’s wild ride through Kamloops in his stolen truck

Crystal Rae Dorrington, 37, and Derrick Ronald Pearson, 32, facing multiple charges

Judge orders credit union’s bank records for Kelowna social worker facing theft allegations

The man is accused of negligence, breach of contract, fraud and a conspiracy with Interior Savings

Leaders pour it on with rallies, boosts for candidates as campaign reaches peak

The federal election campaign has reached a crescendo

Allegations of racism lead to ministry investigation at Vancouver private school

St. George’s School was contacted over what the school describes as ‘deeply offensive behaviour online’

Not a political question: Thunberg calls for climate action in Alberta

Edmonton police estimated the size of the crowd at about 4,000

City of Nanaimo planning to build new boathouse at Long Lake by 2023

$1.35-$2-million project would be used by local rowing, canoe and kayak clubs

Lantzville’s Pottie ‘walking away’ from derelict hotel in Port Alberni after one week

WorkSafe B.C. issues stop work order; owner says cost to continue too high

Most Read