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Summary
- Canada's finance ministry said on Friday, March 26, that the country’s budget deficit expanded to C$ 268.18 billion in the 10 months of its fiscal year between April 2020 and January 2021.
- In January alone, Canada recorded a budgetary deficit of about C$ 20.01 billion on a monthly basis.
- The "unprecedented shift” in Canada’s financial results was primarily motored by the COVID-inflicted economic crisis and massive aid spending during the period, the ministry said.
Canada's finance ministry said on Friday, March 26, that the country’s budget deficit expanded to C$ 268.18 billion in the 10 months of its fiscal year between April 2020 and January 2021.
In January alone, Canada recorded a budgetary deficit of about C$ 20.01 billion on a monthly basis, which was significantly up from that of C$ 415 million surplus in January 2020.
The "unprecedented shift” in Canada’s financial results was primarily motored by the COVID-inflicted economic crisis and massive aid spending during the period, the ministry said in the recent statement.
Back in November 2020, the Finance Department had reportedly projected a fiscal deficit of nearly C$ 400 billion for the fiscal year amid the pandemic.
It also pointed that the latest C$ 213.35-billion figure comes after a 10-month period deficit of C$ 10.56 billion in 2019-2020.
Canada’s Latest Financials – Key Insights
The finance ministry added in its release on Friday that Canada’s year-to-date (YTD) revenue recorded a drop of about 14.7 per cent, which was a broad-based dip that included decreased tax revenues.
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Fueled by the financial aids provided to different provinces, businesses, etc, the country’s YTD program expenses was up by 83.9 per cent.
Public debt charges, the ministry said, dropped to C$ 17.2 billion in the latest 10-month period, down from that of C$ 20.2 billion in the previous year, mainly due to the decreased inflation and interest rates.
Canada’s monthly revenues reportedly slipped by about 7.4 per cent, triggered by the decline in revenues such as Crown corporation profits, investments returns, etc. Program expenses, on the other hand, were up by 65.5 per cent due to the pandemic response measures.
By the end of January 2021, Canada’s net federal debt was reported to by just under the mark of C$ 1.09 trillion.
The results released on Friday are set to be the last budget-related update from the federal government before it tables a fresh budget next month, on April 19, after a two-year gap since March 2019.
The upcoming budget is expected to give a detailed account of the Trudeau government’s spending patterns through the coronavirus pandemic.
In the coming years, the Liberals plan to spend in the range of C$ 70 billion to C$ 100 billion in fiscal stimulus in efforts to help the economy recover from the coronavirus crisis.
