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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

MS Society looks for Nanaimo volunteers to offer peer support

Multiple Sclerosis Society of Canada asks for help with its one-to-one support program

Do-over vote has similar result, 280-unit development in Lantzville going to public hearing

Mayor’s motion to rescind Clark/Medd application’s second reading fails 3-2

Nanaimo asked to get out and hustle for hospice

Nanaimo Community Hospice Society organizing event to replace usual fundraiser hike

Peace ceremony in Nanaimo will be a little different in a pandemic

Hiroshima Day will be observed during the afternoon Aug. 6 at Maffeo Sutton Park

Column: ‘Old normal’ disheartening in time of opportunity

We Charity muddle the result of manipulation of money in achieving worthwhile goals, says columnist

B.C. records 146 new COVID-19 cases through long weekend

More that 28 people tested positive for the virus each day since Friday

Canucks tame Minnesota Wild 4-3 to even NHL qualifying series

J.T. Miller leads Vancouver with goal and an assist

Cyclist in hospital after being hit by load of lumber hanging from truck on B.C. highway

A man is in hospital with broken ribs, punctured lung and a broken clavicle and scapula

COVID-19 vaccine efforts provide hope but no silver bullet to stop pandemic: Tam

There are more than two dozen vaccines for COVID-19 in clinical trials around the world

City of Nanaimo to look at turning NDSS field into mid-size stadium

Parks and rec will begin stakeholder engagement and begin work on a phased plan for improvements

Woman arrested near Nanaimo’s Westwood Lake after road rage incidents

37-year-old woman facing charges including assault, assaulting a police officer, impaired driving

Alberta to require masks at schools this fall, but still no mandate in B.C.

B.C. students are also set to return to classrooms in September

Two people die in propane heated outdoor shower near Princeton

Couple was attending a long weekend gathering

Most Read