Federal economic update

Some take-aways from Tuesday’s federal economic update:

The federal government remains confident that it will eliminate the deficit in time for the next election by 201516, at which point it anticipates a $3.7-billion surplus. The deficit in 2012-13 was $18.9 billion.

Lower prices for Canadian natural gas, forestry products, metals and agricultural products since March have led economists to anticipate slower economic growth over the next two years.

The government estimates that this summer’s flooding in Alberta and the construction strike in Quebec combined to reduce economic growth between July and September by 0.5 per cent, to 1.7 per cent.

The Alberta floods are also expected to cost the federal government $2.8 billion in disaster assistance, while the Lac-Mégantic, Que., train disaster will cost about $60 million.

About $8.9 billion went unspent by federal departments and agen- cies, which represented about nine per cent of the money they were allowed to spend. This was about double what the government expected. The government anticipates a $7-billion lapse this year.

The crunch continues for federal departments and agencies. The government will be instigating a two-year freeze starting next year.

Canadian households are expected to shoulder a larger portion of federal income taxes. While they accounted for roughly 75.8 per cent of federal income taxes last year, that number is expected to reach 76.6 next year and won’t return to current levels until around 2017.

In contrast, while corporations contributed 21.1 per cent of total federal income taxes last year, their share will fall to 20 per cent next year and won’t go back up to the current level until 2018.

An aging population means more money paid out for elderly benefits.