For the first eleven months of fiscal year 2013-14, the federal government posted a deficit of $5.4 billion, an improvement of $5.3 billion from the deficit of $10.7 billion reported in the same period in 2012-13. The surplus in February 2014 was about $2 billion higher than that recorded in February 2013.  The financial results for December 2013 to February 2014 represent virtually all of the improvement in the deficit year-to-date.

Unless there are some really unusual developments over the balance of the fiscal year (March and the end-of-year accounting period), the final outcome for 2013-14 should be considerably lower than that forecast in Budget 2014, leading to the possibility of a balanced budget or surplus in 2014-15.  However, a word of caution: last year, the monthly Fiscal Monitor results were not a good indicator of the final outcome for the year as a whole.  Although promised, no explanation as to why was ever provided by the Minister of Finance.  Canadians will have to wait until the fall of 2014 for the final audited results to see how representative the monthly results actually were. 

Total budgetary revenues were up by $10.3 billion for the first eleven months of 2013-14 on a year-over-year basis, exceeding the change of $7.4 billion forecast in Budget 2014 for the year as a whole, by $3.5 billion. Increases in all major components of revenues were larger to date than those expected in Budget 2014. If these gains hold, total revenues could exceed the overall revenue forecast in Budget 2014 by $3 to $4 billion. 

For the first eleven months of 2013-14, program expenses were up $5.7 billion, compared to the same period in 2012-13. In Budget 2014, an increase of $4.8 billion was expected for the year as a whole. However, year-over-year comparisons are currently distorted by the timing of bookings for various liabilities and budget measures. 

In 2012-13, bookings for liabilities amounted to over $3 billion, but were largely recorded at the end of the fiscal year. This year, bookings of a similar amount have already been recorded. Budget 2014 proposed additional restraint measures totally $1.7 billion, of which $1.1 billion is for the proposed cost sharing of the Public Sector Health Care Plan.  After adjusting for the timing of the bookings for “one-time extraordinary” liabilities, the year-over-year increase in total program expenses to date is lower than that expected for the year as a whole, by at least $2 billion.