Finance Department predicts federal budget will be balanced by 2040

The annual update on the long-term outlook for federal finances says that if things go better than expected, the budget will be balanced or almost so by 2024.

A balanced federal budget won’t land until at least 2040 — five years earlier than the government predicted last year — if there aren’t any major economic shocks or new government spending the federal Finance Department says in a new report.

Long-term budgetary projections released Friday morning estimate that by the end of fiscal year 2040-2041, federal books will be in surplus by $1.7 billion, based on current assumptions for how the economy will grow, and expectations that promised Liberal programs to help boost business investment will yield a financial windfall for the country — and then for federal coffers.

The annual update on the long-term outlook for federal finances says that if things go better than expected, the budget will be balanced or almost so by 2024.

But if things go poorly, and the economy doesn’t grow as fast as federal officials predict, then the deficit could get worse until 2034.

The Trudeau Liberals promised during the 2015 election to balance the books by the end of their mandate — 2019 — after running small deficits.

The government’s February budget predicted a deficit of $18.1 billion for the current 2018-19 fiscal year, which ends in March.

The report says federal finances appear sustainable over the long term, with the Liberals’ favoured fiscal number, the federal debt as a percentage of gross domestic product, expected to decline over time. That’s a way of measuring how heavy the debt burden is compared with the size of the national economy rather than just tallying the total the federal government owes.

The government’s debt, which as of October stood at $669.5 billion, is expected to peak at almost $960 billion in the same year the budget reaches balance, the report says.

Read more: Federal budget bill quietly proposes tool to ease penalties for corporate crime

Read more: Airbnb’s federal budget proposal tells Liberals, ‘we want to be regulated’

The Finance Department warns the projections are based on a number of assumptions about population and economic growth, making the projects “subject to a fair degree of uncertainty.” Nor do they take into account any new government spending or taxes over the coming years.

Ottawa ran a small surplus of $92 million through the first seven months of its fiscal year, compared with a deficit of nearly $6.6 billion in the same period last year, as revenue has increased faster than spending.

According to the monthly fiscal monitor report from the Department of Finance, revenue totalled nearly $186.1 billion between April and October, up about 8.3 per cent from $171.8 billion in the same period last year.

The increase came due to rises in tax revenue, employment-insurance premiums and other revenues.

Program spending has topped $171.8 billion, up about 3.7 per cent from $165.8 billion over the same stretch last year, while public debt charges so far this fiscal year totalled more than $14.1 billion, up 12.1 per cent from almost $12.6 billion.

For the month of October, which is as far as the latest report goes, the federal government posted a deficit of $1.1 billion, compared with a deficit of about $400 million in the same month last year.

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

B.C. Liberal leader Andrew Wilkinson announces new infrastructure spending on the Lower Mainland on Monday, flanked by Maple Ridge-Pitt Meadows candidate Cheryl Ashlie and Maple Ridge-Mission candidate Chelsa Meadus. (Neil Corbett/Black Press)
Wilkinson says plan to rebuild B.C. will work for Vancouver Island

B.C. Liberal leader talks to the News Bulletin about homelessness, forestry, infrastructure

Nanaimo RCMP are asking for the public’s assistance in locating Michael Leighton, who is wanted on 11 warrants on Vancouver Island and is a suspect in a recent break, enter and theft in Nanaimo. (Photos submitted)
Nanaimo RCMP looking for break-and-enter suspect with 11 warrants

Police say Michael Leighton a suspect in theft of pistol and $40,000 worth of coins

Plastic checkout bags could be banned in Nanaimo by next summer if a city bylaw receives provincial approval. (News Bulletin file photo)
Nanaimo moves closer to banning plastic and other single-use checkout bags

Nanaimo city council votes to forward checkout bag regulation bylaw to province for approval

Rotary Centennial Garden at Maffeo Sutton Park. (Sean Fenzl photo)
New Rotary garden officially open at Nanaimo’s Maffeo Sutton Park

Rotary Centennial Garden design inspired by the shoreline

Jenna Forster moderated the Virtual All Candidates Forum between Duck Paterson (top left); Chris Istace (top right); and Doug Routley (Youtube/Ladysmith Chamber of Commerce)
Nanaimo-North Cowichan candidates state their case in virtual debate

Duck Paterson, Chris Istace, and Doug Routley are on the ballot for October 24

FILE – People wait in line at a COVID-19 testing facility in Burnaby, B.C., on Thursday, August 13, 2020. THE CANADIAN PRESS/Darryl Dyck
167 new COVID-19 cases, 1 death recorded as B.C. enters 2nd wave

Three new healthcare outbreaks also announced

This 2020 electron microscope image made available by the National Institute of Allergy and Infectious Diseases shows a Novel Coronavirus SARS-CoV-2 particle isolated from a patient, in a laboratory in Fort Detrick, Md. THE CANADIAN PRESS/AP-NIAID/NIH via AP
At least 49 cases of COVID-19 linked to wedding in Calgary: Alberta Health

McMillan says the city of Calgary has recently seen several outbreaks linked to social gatherings

UBC geoscientists discovered the wreckage of a decades-old crash during an expedition on a mountain near Harrison Lake. (Submitted photo)
Wreckage of decades-old plane crash discovered on mountain near Harrison Lake

A team of Sts’ailes Community School students helped discover the twisted metal embedded in a glacier

Candidates in the Nanaimo riding include Kathleen Jones, B.C. Liberal Party, top left; Sheila Malcolmson, NDP; Lia Versaevel, Green Party. (Photos submitted/News Bulletin photo/Elections B.C. image)
B.C. VOTES 2020: Nanaimo candidates

Provincial election candidates discuss their priorities in their own words

Candidates in the Nanaimo-North Cowichan riding include Chris Istace, B.C. Green Party, top left; Duck Paterson, B.C. Liberals; and Doug Routley, NDP. (Photos submitted/Elections B.C. image)
B.C. VOTES 2020: Nanaimo-North Cowichan candidates

Provincial election candidates discuss their priorities in their own words

Candidates in the Parksville-Qualicum riding include Rob Lyon, B.C. Green Party, top left; Don Purdey, Conservatives; John St. John, independent; Michelle Stilwell, B.C. Liberals; and Adam Walker, B.C. NDP. (Photos submitted/Elections B.C. image)
B.C. VOTES 2020: Parksville-Qualicum candidates

Provincial election candidates discuss their priorities in their own words

The official search to locate Jordan Naterer was suspended Saturday Oct. 17. Photo courtesy of VPD.
‘I am not leaving without my son,’ says mother of missing Manning Park hiker

Family and friends continue to search for Jordan Naterer, after official efforts suspended

A bear similar to this black bear is believed responsible for killing a llama in Saanich on Oct. 19. (Black Press Media file photo)
Bear kills llama on Vancouver Island, prompting concerns over livestock

Officers could not track the bear they feel may not fear humans

Bernard Trest and his son Max, 10, are concerned about B.C.’s plan for students in the classroom. He was one of two fathers who filed a court application in August to prevent schools from reopening if stricter COVID-19 protections weren’t in place. That application was dismissed last week. (Contributed photo)
B.C. dad pledges to appeal quashed call for mandatory masks, distancing in schools

Bernard Trest and Gary Shuster challenged health, education ministries’ return-to-school plan

Most Read