Finance Department predicts federal budget will be balanced by 2040

The annual update on the long-term outlook for federal finances says that if things go better than expected, the budget will be balanced or almost so by 2024.

A balanced federal budget won’t land until at least 2040 — five years earlier than the government predicted last year — if there aren’t any major economic shocks or new government spending the federal Finance Department says in a new report.

Long-term budgetary projections released Friday morning estimate that by the end of fiscal year 2040-2041, federal books will be in surplus by $1.7 billion, based on current assumptions for how the economy will grow, and expectations that promised Liberal programs to help boost business investment will yield a financial windfall for the country — and then for federal coffers.

The annual update on the long-term outlook for federal finances says that if things go better than expected, the budget will be balanced or almost so by 2024.

But if things go poorly, and the economy doesn’t grow as fast as federal officials predict, then the deficit could get worse until 2034.

The Trudeau Liberals promised during the 2015 election to balance the books by the end of their mandate — 2019 — after running small deficits.

The government’s February budget predicted a deficit of $18.1 billion for the current 2018-19 fiscal year, which ends in March.

The report says federal finances appear sustainable over the long term, with the Liberals’ favoured fiscal number, the federal debt as a percentage of gross domestic product, expected to decline over time. That’s a way of measuring how heavy the debt burden is compared with the size of the national economy rather than just tallying the total the federal government owes.

The government’s debt, which as of October stood at $669.5 billion, is expected to peak at almost $960 billion in the same year the budget reaches balance, the report says.

Read more: Federal budget bill quietly proposes tool to ease penalties for corporate crime

Read more: Airbnb’s federal budget proposal tells Liberals, ‘we want to be regulated’

The Finance Department warns the projections are based on a number of assumptions about population and economic growth, making the projects “subject to a fair degree of uncertainty.” Nor do they take into account any new government spending or taxes over the coming years.

Ottawa ran a small surplus of $92 million through the first seven months of its fiscal year, compared with a deficit of nearly $6.6 billion in the same period last year, as revenue has increased faster than spending.

According to the monthly fiscal monitor report from the Department of Finance, revenue totalled nearly $186.1 billion between April and October, up about 8.3 per cent from $171.8 billion in the same period last year.

The increase came due to rises in tax revenue, employment-insurance premiums and other revenues.

Program spending has topped $171.8 billion, up about 3.7 per cent from $165.8 billion over the same stretch last year, while public debt charges so far this fiscal year totalled more than $14.1 billion, up 12.1 per cent from almost $12.6 billion.

For the month of October, which is as far as the latest report goes, the federal government posted a deficit of $1.1 billion, compared with a deficit of about $400 million in the same month last year.

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

Shaelynn Decock and her dog Taco, who has been missing since Aug. 26. Photo Submitted
Sylvan Lake woman looking for closure for her stolen dog

Shaelynn Decock says it has been two months since she last saw her dog Taco

Alberta chief medical officer of health Dr. Deena Hinshaw updates media on the Covid-19 situation in Edmonton on Friday March 20, 2020. nbsp;Alberta is reporting it's highest daily number of COVID-19 cases, with 364 new infections. THE CANADIAN PRESS/Jason Franson
Alberta confirmed 323 COVID-19 cases Tuesday

Central zone active cases at 145

Jay “Chef” Scotian poses for a photo in his new location in Sylvan Lake. Eat Coast Market and Grill will be holding a “Donations for Donairs” fundraiser for Haley Wile on Oct. 24. Photo by Megan Roth/Sylvan Lake News
Sylvan Lake business fundraising for local woman paralyzed in car accident

Haley Wile was in a serious car accident which left her paralyzed from the waist down

Brady Durkin. Photo Submitted
Young Sylvan Lake golfer places in the Top 10 in the country

Brady Durkin finished the National Championship tournament in 8th place recently

Health Minister Tyler Shandro and Dr. Deena Hinshaw, the chief medical officer of health, receive flu shot. Photo via Government of Alberta
COVID-19: One more death in central zone

Ponoka County on province’s watchlist

Conservative member of Parliament Pierre Poilievre speaks during a press conference on Parliament Hill in Ottawa on October 19, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Liberals say Tory effort to set up COVID-19 committee will be a confidence matter

The Tories were originally proposing an ‘anticorruption’ committee

Alberta's provincial flag flies on a flag pole in Ottawa, Monday, July 6, 2020. Advisers are reportedly recommending Alberta's kindergarten to Grade 4 arts and social studies curriculum remove all references to residential schools because it's "too sad" for young children. THE CANADIAN PRESS/Adrian Wyld
Advisers suggest Alberta students not learn about residential schools before Grade 4

Documents suggest children younger than Grade 4 are too emotionally vulnerable to learn about residential schools

robbery
UPDATE: Shooting suspect arrested by Wetaskiwin/Camrose RCMP

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

File photo
RCMP’s response to online discussions about anti-racism demonstrations

Ponoka RCMP Staff Sgt.’s comments misattributed online

Prime Minister Justin Trudeau is seen during a news conference Tuesday October 20, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Trudeau and his family decide against trick-or-treating this year due to COVID

Adhering to local health authorities, Trudeau urges Canadians to do their part in following those guidelines

Natural Resources Minister Seamus O’Regan responds to a question during Question Period in the House of Commons Tuesday February 4, 2020 in Ottawa. The Alberta government is welcoming news that Ottawa has approved an expansion of the Nova Gas Transmission Ltd. gathering system in Alberta — while condemning federal delays that it says cost this summer’s construction season. THE CANADIAN PRESS/Adrian Wyld
Alberta welcomes federal approval of gas pipeline expansion while criticizing delay

The project is expected to create up to 2,920 direct jobs during construction, the federal release said

A Tim Hortons employee hands out coffee from a drive-through window to a customer in Mississauga, Ont., on March 17, 2020. Tim Hortons is ending the practice of double cupping hot drinks, a move the fast food restaurant says will eliminate hundreds of millions of cups from landfills each year. THE CANADIAN PRESS/Nathan Denette
The end of double cupping: Tim Hortons ditches two cups in favour of one with sleeve

Most recycling facilities in Canada don’t recycle single use paper coffee cups because of a plastic lining

Canada’s Chief Public Health Officer doctor Theresa Tam responds to a question during a news conference Tuesday October 20, 2020 in Ottawa. Canada’s chief public health doctor says in the age of social media, fake news about the COVID-19 pandemic has been spreading faster than the virus itself. THE CANADIAN PRESS/Adrian Wyld
VIDEO: Fake news creates serious issues for battling pandemic, chief public health doc says

Both Tam and Prime Minister Justin Trudeau urged Canadians to be responsible about the information they share

Most Read