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.

Just Posted

Stettler Health Services’ annual golf tournament a big success despite soggy weather

Annual event ran June 22nd at the Stettler Golf and County Club

Stettler gears up for annual Communities in Bloom challenge

As the 2011 National Champs, the Town now competes in the international category

Trek to Mt. Everest’s base camp an awe inspiring experience for Sylvan Lake resident

Perle Campbell said looking back on the experience is like a dream.

Stettler has fun-filled day planned for Canada Day

Fireworks, entertainment at West Settler Park

Changes coming to this year’s Big Valley Jamboree

Camrose’s popular country music festival ‘enhances guest experience’

VIDEO: Tributes flow on 10th anniversary of Michael Jackson’s death

Jackson received a fatal dose of the anesthetic propofol on June 25, 2009. He died at age 50

Accused mother cries at Alberta trial over boy who died of meningitis

Parents charged with failing to provide necessaries of life for their son who died in 2012

Ponoka County receives update from energy lobby group

CAPP hopes to work with municipalities on property tax issues

Air Canada reviewing how crew left sleeping passenger on parked plane

In a Facebook post, the woman said she woke up ‘all alone’ on a ‘cold dark’ aircraft

Canadians crash out of Women’s World Cup in 0-1 loss to Sweden

Canada missed a chance to tie the game on a penalty shot

Late night fight in Wetaskiwin results in aggravated assault, assault with a weapon charges

Wetaskiwin RCMP investigate armed robbery and aggravated assault

Maskwacis featured in documentary series that unearths Indigenous cuisine

Red Chef Revival’s host visits community, elders and Nipisihkopahk School

PHOTOS: Event marks one year since soccer team rescued from Thai cave

Nine players and coach took part in marathon and bike event to help improve conditions at cave

Fighter Jets light up Bucs’ to take AFL first place

38-3 loss puts Central Alberta into second place in the AFL

Most Read