Fiscal Monitor for April – May 2017: A Small Surplus That Is Not Expected to Last


For the first two months of fiscal year 2017-18, the federal government posted a surplus of $68 million, compared to a surplus of $114 million from the same period in 2016-17. The slight deterioration in the surplus was largely attributable to a 28.3% year-over-year increase in the Canada Child Benefit, reflecting the 2016 Budget measures, which came into effect in July 2016.

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Federal “Market Debt” First Exceeded $1 Trillion Six Years Ago Under the Harper Government

 

The print and TV media recently picked up on a statement in the 2018 Budget that the federal government’s “market” debt would exceed $1 trillion.  They reported this as the tipping point for federal finances, as if the government had hit the proverbial “fiscal wall”.

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Fiscal Monitor for December 2017

 

 

Among the documents released on budget day was the Fiscal Monitor for December 2017. The federal government posted a budgetary surplus of $565 million in December 2017, compared to deficit of $1.3 billion in December 2016.

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THE 2018 BUDGET GETS HIGH MARKS FOR FISCAL CREDIBILITY

 

Most economists who follow federal budgets probably didn’t think much of Mr. Morneau’s recent budget. In their view, there is too much new spending; spending on government operations is growing too fast; and, there is no commitment to deficit elimination.  They would probably give the budget a failing grade in judging its overall fiscal credibility. In a poll conducted the Forum Research Inc. 36% of the respondents said the budget was bad for the economy.

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Deficit for 2017-18 Could Be Lower than That in 2016-17 or Not

The federal government posted a budgetary deficit of $2.8 billion in November 2017, compared to deficit of $3.3 billion in November 2016.

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IS THE FINANCE DEPARTMENT UNDERSTATING DIRECT PROGRAM EXPENSES?


In a recent report the University of Ottawa’s Institute of Fiscal Studies and Development (IFSD )argued that the October 2017 Fall Economic Statement (FES) understated the growth in direct program expenses and that as a result expenditure reductions would be required in the 2018 budget.  Professor Gordon of Laval University, in an article in the National Post, expressed a similar view.

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