Prime Minister Justin Trudeau stands with Bill Morneau as he remains Minister of Finance during the swearing-in of the new cabinet at Rideau Hall in Ottawa on Wednesday, Nov. 20, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Liberals’ fiscal update shows billions more in deficits this year and next

Last time, they projected a $19.8-billion deficit. This time, it’s $26.6 billion

Canada’s federal budget deficit will be billions of dollars deeper than it was supposed to be this year and next, according to the Finance Department.

The figures released Monday morning show that the Liberals’ projected deficit of $19.8 billion for the 12-month period that ends in March is now slated to hit $26.6 billion.

And next year’s deficit is expected to be $28.1 billion, before accounting for promises the Liberals will unveil in their 2020 budget.

The Liberals’ election platform projected four years of deficits of more than $20 billion, including almost $27.4 billion in the upcoming fiscal year that begins in April 2020.

The Finance Department says the deeper deficit is largely driven by changes to how employee pensions and benefits are calculated, but also accounts for a tax break that takes effect on Jan. 1.

Still, the Liberals say their preferred measure of the state of federal finances — which calculates the deficit relative to the size of the economy — will keep improving, if not as quickly as it was supposed to.

Spending is also expected to go up faster on the Canada Child Benefit than the Liberals projected earlier this year, a reflection of pegging the value of payments to inflation and “an increase in the projected number of children eligible.”

The government also says that increased spending announced in the March 2019 budget will be “entirely offset” over the coming years by what the Liberals higher-than-anticipated personal and corporate income-tax revenue.

At the same time, revenues will decline for excise taxes and duties this year — largely from the Liberals’ lifting retaliatory tariffs on American steel and aluminum earlier than they planned — and over the coming years from “lower expected growth in taxable consumption.”

READ MORE: Re-elected Liberals would still run big deficits, despite new taxes

Federal officials are also promising the first phase of a spending and tax review that the Liberals say will result in $1.5 billion in savings starting next fiscal year, which the government has accounted for.

The update provided today from Finance Minister Bill Morneau comes on the heels of a week where the opposition Conservatives accused the government of creating the conditions for a “made-in-Canada recession.”

The government, however, projects that the economy itself will continue to grow over the coming years at roughly the rate calculated in the March budget.

The Finance Department projects growth will be 1.7 per cent this year and 1.6 per cent next year, after weakness late last year and early this year, particularly in the mining and oil-and-gas sectors. The projections would make Canada the second-fastest-growing economy among G7 countries, behind only the United States.

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

Mayor speaks on governance audit findings, recommendations

Cranbrook Mayor Lee Pratt says he welcomed the findings and recommendations identified… Continue reading

Kimberley/Cranbrook entertainment listings

Big festival weekends coming up in Kimberley and Cranbrook

Region’s judo dojos take part in Cranbrook training session

On Saturday, February 15, the Cranbrook Judo Dojo hosted the Kootenay Regional… Continue reading

Memorial Arena set to host high school graduation ceremonies

Western Financial Place expected to be unavailable due to ongoing construction during summer months

PHOTOS: Taking in the action at Winter Blitzville

The second annual Winter Blitzville was bigger and better this year as… Continue reading

VIDEO: 7 things you need to know about the 2020 B.C. budget

Surplus of $227 million with big spending on infrastructure and capital projects

Trees Cannabis director fined $1.5M for selling marijuana

Fine follows provincial crackdown on popular dispensary

World Cup skier from Okanagan dies suddenly at 19

Kuroda, who made his World Cup debut earlier this year, passed away suddenly Monday night.

Coastal GasLink pipeline investor committed to closing deal despite protests

Developer TC Energy Corp. — formerly TransCanada Corp. — is to remain the operator of the $6.6-billion pipeline

Police narrow down timeline in death of woman in West Kootenay

West Kootenay Traffic Services and BC Coroners Service working on the case

New highway proposed between Alberta and B.C.

The route would connect Red Deer to Kamloops

What’s in a name? The story of Revelstoke’s Mt. Begbie

It’s likely the iconic peak had several Indigenous peoples’ names before settlers arrived

Budget 2020: B.C. Liberals blast ‘Netflix tax,’ lack of economic plan

ICBC rates still go up, except in election year, Shirley Bond says

Teen snowmobiler from Kelowna found after air force’s overnight search

The teen had been missing since just after 6 p.m. on Monday

Most Read