By Paul Vieira
OTTAWA-Canada posted a budget deficit in the most recent fiscal year that was sharply smaller compared with the previous fiscal year, and narrower than what it projected in this year’s financial plan.
Canada’s Finance Department reported Tuesday that the budget deficit in the fiscal 2022-23 year was 35.3 billion Canadian dollars, or the equivalent of $25.7 billion. This is below the projected C$43 billion deficit the Liberal government anticipated in its 2023 budget plan, issued this past March, and well below the C$90.2 billion shortfall in the fiscal 2021-22 year. The previous year’s deficit was elevated due to pandemic-related spending, which has since been scaled back.
The narrowing of the 2022-23 budget deficit was due to an 8.4% jump in revenue from the prior year, reflecting robust employment gains and strong corporate earnings, in particular in the resource sector. Expenses related to government programs and day-to-day operations fell 4.1%. Of note, public-debt charges rose nearly 43%, due to a rapid rise in interest rates.
Canada’s Finance Minister Chrystia Freeland is expected to deliver an update to the country’s parliament in the coming weeks about public finances for the current fiscal 2023-24 year. Her 2023 budget plan forecast a C$40 billion shortfall for the current fiscal year – although parliament’s budget watchdog, in a report this month, said it projects the deficit to clock in at about C$46.5 billion.
Write to Paul Vieira at [email protected]
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