Rising program expenses push deficit to estimated $21.8B

OTTAWA (CP) — A $21.7-billion surge in federal program expenses was almost entirely responsible for the government’s expected 2016-17 deficit, according to a preliminary analysis of Ottawa’s books.

The Finance Department numbers released Friday suggest the government’s on track to run a $21.8-billion shortfall in the last fiscal year. The new figure puts the Liberal government close to its 2016-17 deficit projection of $23 billion, without counting a $3-billion risk adjustment that was added to the accounting framework.

The fiscal monitor Friday showed an 8.2 per cent expansion last year in federal program expenses, which included a $10.6-billion or 9.1 per cent increase in direct program spending. Those expenses also feature an $8.3-billion or 10 per cent gain in government transfers to individuals, which include increases in federal benefit payments for children, seniors and employment insurance.

Revenues increased by $600 million or 0.2 per cent compared with a year earlier, the Finance Department said. The analysis found personal income tax revenues rose $300 million or 0.2 per cent, while corporate tax revenues were up $2.3 billion or 5.4 per cent.

The 2016-17 figure released Friday was not the final result because end-of-year adjustments still need to be completed.