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

Fraser Canyon Hospital has urgent need for stretchers

Stretchers needed in Hope’s emergency room cost $12,000 each

Lighting up Hope for a cause

Purple light displays shine a light on domestic violence

‘Family and Friends in Memory of Linda’ raise $7,700

Linda McNicol, a long-time employee at the CIBC branch in Hope, passed away in June

Contentious issues debated at candidates meeting in Hope

Locals pack conference hall to learn more about local candidates

Drivers warn of slippery conditions on the Coquihalla

Snow is falling at the Summit of the Coquihalla

B.C. mayor apologizes for removal of Queen’s portrait from council chambers

‘I prefer to be inclusive of the many aspects of our history’

Alcohol a possible factor in crash that killed 17-year-old girl near Williams Lake

A pickup truck left the road and rolled over on Highway 20 on the weekend

Rare bird spotted in Victoria draws enthusiasts from across the continent

It’s the first time a yellow-browed warbler has been reported on the mainland of North America

B.C. woman must pay $1,000 after unleashed dog bites another

Owner should never have left Bibi unattended, tribunal member wrote

80% of TransLink bus routes are slower today than five years ago: report

TransLink says delays are costing $75 million a year

Climate activist Greta Thunberg’s mural defaced in Edmonton

The eyes on the portrait were blacked out

VIDEO: Depth and scoring lacking for Vancouver Giants this season: Coach

G-Men defeated on home ice Sunday by Victoria – next up Everett on Friday

Report suggests new BC Ferries terminal near YVR

Metro Vancouver currently has two ferry terminals at northern and southern reaches

Most Read