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

Power outage planned for Victoria General Hospital

Island Health says essential services and patient care won’t be impacted during Oct. 19 outage

Free firework safety courses coming to the West Shore right before Halloween

No permit? You could be fined anywhere between $100 and $10,000

Bonfires allowed in Saanich for $10 but only on Halloween night

Residents can purchase permits at any Saanich fire station

Persons Day to be marked with literary readings in Sidney

Peninsula authors to read from their new books relating to women and courageous journeys, Oct. 18

Vendors open doors to new futures at Black Press Extreme Education & Career Fair

More tham two dozen employers, educators signed on for Victoria event

VIDEO: Greater Victoria, here’s the news you missed this weekend

Dog killed in alleged hit and run, Goodlife Marathon takes over city and more

‘Save the kids!’ Dorian survivor tells the harrowing story of his Canadian wife’s death

Family held a funeral and placed Alishia Liolli’s remains in a niche at a cemetery in Windsor, Ont.

Okanagan woman, 91, votes at advance polls despite broken hip, shoulder and wrist

Angela Maynard has voted in almost every election during her lifetime

Heiltsuk Nation open first Big House in 120 years in northern B.C.

Opening means the community now has an appropriate space for spiritual and ceremonial events

Singh says NDP would form coalition with the Liberals to stop Tories

Singh was in a Liberal-held riding Sunday afternoon in Surrey where he was pressed about his post-election intentions

‘My heart goes out to the mother’: B.C. dad reacts to stabbing death of Ontario boy

Carson Crimeni, who was also 14, was bullied relentlessly, his dad says

The one with the ‘Friends’ photoshoot: Kelowna group recreates TV show intro

A friend’s departure prompted them to create something that really says, “I’ll be there for you”

Canadian Snowbirds plane crashes before air show in Atlanta

Pilot lands safely after ejecting from jet

Share crash data, private insurers tell David Eby, ICBC

B.C. monopoly makes drivers retrieve their own records

Most Read