The federal government of Canada has reported a budgetary deficit of $25.7 billion as of the end of January for the current fiscal year, according to the Finance Department’s monthly fiscal monitor. This deficit marks a significant increase from the $6.4-billion deficit recorded during the same period a year earlier.
The fiscal monitor provides a final overview of the federal finances before Finance Minister Chrystia Freeland presents the budget on April 16, offering insight into the government’s adherence to the fiscal guardrails pledged in the fall. These commitments include capping the deficit at approximately $40 billion for the current fiscal year.
Notably, government revenues saw a notable increase of $10.5 billion, or three per cent, primarily driven by higher personal income tax revenues, other tax revenues, and non-tax revenues. However, program expenses, excluding net actuarial losses, also surged by $21.2 billion, representing a 6.7 per cent increase across all major categories. Additionally, public debt charges rose by $10.3 billion, or 35.9 per cent, largely attributed to higher interest rates.
On the other hand, net actuarial losses experienced a decline of $1.9 billion, or 23.2 per cent, compared to the same period a year earlier. These figures shed light on the evolving state of federal finances and set the stage for the upcoming budget presentation.
