Feds start fis­cal year with $68-mil­lion sur­plus

Fi­nance depart­ment warns red ink is on the way

The Guardian (Charlottetown) - - CANADA - BY LEE BERTHIAUME

The fed­eral gov­ern­ment started the fis­cal year with the tini­est of bud­getary sur­pluses, though the black ink is ex­pected to turn very red in the com­ing months.

The Fi­nance Depart­ment’s monthly fis­cal mon­i­tor re­ports that the gov­ern­ment posted a $68-mil­lion sur­plus for April and May, just less than last year’s to­tal over the same pe­riod.

The fed­eral gov­ern­ment’s fis­cal year runs from April 1 to March 31.

The sur­plus is not ex­pected to last, how­ever, as the Lib­er­als have promised to run deep deficits over the com­ing years to fi­nance ma­jor in­fra­struc­ture work and more lu­cra­tive child ben­e­fits.

The feds ended up run­ning a $21.85-bil­lion deficit last year, and have pro­jected a $28.5-bil­lion deficit this year.

Pro­gram ex­penses in­creased by more than $2.6 bil­lion in April and May com­pared to the same pe­riod last year, due to more money spent on se­niors’ ben­e­fits and the new Canada Child Ben­e­fit.

While that out­stripped the nearly $2.3-bil­lion growth in rev­enues, in­clud­ing a ma­jor boost in GST rev­enues, the fis­cal sit­u­a­tion was helped by a $312-mil­lion re­duc­tion in public debt charges.

The Lib­er­als won the 2015 elec­tion on a plat­form that promised an­nual deficits of no more than $10 bil­lion over the next cou­ple of years, and to elim­i­nate the deficit by 2019-20.

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