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

Osoyoos Desert Centre prepares for reopening

The 67-acre nature interpretive facility opens June 6

Curbside reads available as Okanagan libraries reopen

Okanagan Regional Library reopened June 2 in phased approach

Shoppers line up hours early for reopening of Penticton’s Care Closet Thrift Store

The not-for-profit thrift store supports several local organizations and charities

Summerland man rescued following ATV accident

Helicopters used to transport injured man to Kelowna for treatment

South Okanagan playgrounds now open

Once caution tape is removed, playgrounds are officially open for public use

About 30% of B.C. students return to schools as in-class teaching restarts amid pandemic

Education minister noted that in-class instruction remains optional

Suspicious activity on North Okanagan bike trails

A rock deliberately placed on a hazardous corner results in bolstered security, cameras

Be cautious expanding COVID-19 bubble, Dr. Bonnie Henry tells B.C.

Senior homes stay off-limits as schools, businesses reopen

Trial of accused in Salmon Arm church shooting expected to be brief

Crown won’t dispute not criminally responsible by way of a mental disorder defence

Defence claims Surrey man was mentally unwell at time of West Kelowna murder

Tejwant Danjou’s jealousy ‘tormented him’, according to his defence lawyer

WildSafeBC: What to do when you find a fawn

Fawning season occurs from May to early July

Small business grants available through Okanagan initiative

Susie and Bryan Gay launched ‘This Bag Helps’ to help fellow small business owners during the pandemic

Vernon Para-snowboarder crushed by competition ban

Canadian Centre for Ethics in Sport said Matt Hamilton tested positive for a banned substance

Most Read