Government revenue rose to $355.6 billion, but higher public debt costs pushed expenses even higher
The federal government reported a budgetary deficit of $21.7bn for the April-to-December period of the 2024–25 fiscal year, according to the Finance Department's monthly fiscal monitor.
BNN Bloomberg reports that this figure represents a decrease from the $23.6bn deficit recorded during the same period in the previous year.
Government revenues for the nine-month period totaled $355.6bn, up from nearly $318.1bn a year earlier, reflecting increases across all major revenue categories.
Program expenses, excluding net actuarial losses, amounted to $333.2bn, rising from nearly $301bn in the prior year, with notable increases in direct program expenses and major transfers to individuals.
Public debt charges reached $41.1bn, up from $35.1bn, primarily due to higher interest rates. Net actuarial losses were $3bn, down from $5.7bn a year ago.
In December alone, Canada posted a budgetary surplus of $1bn, contrasting with a $4.47bn deficit in December of the previous year, as reported by Reuters.
For the 2023–24 fiscal year, the government recorded a deficit of $61.9bn, exceeding the projected $40bn deficit outlined in the April 2024 federal budget.
This increase was mainly due to lower-than-expected tax revenues and higher program expenses, including provisions for Indigenous claims and allowances for doubtful accounts.
The government's fiscal strategy aims to maintain Canada's net debt-to-GDP ratio as the lowest among G7 countries, with a projected ratio of 14.4 percent for 2024, significantly below the G7 average of 103.8 percent.
However, recent political developments have added uncertainty to Canada's fiscal outlook.
In December 2024, Finance Minister Chrystia Freeland resigned over disagreements with Prime Minister Justin Trudeau regarding fiscal policies and the response to potential US tariffs.
According to Financial Times, Freeland emphasized the need for fiscal prudence in light of these external economic threats. Her resignation has intensified discussions about Canada's fiscal management and economic resilience.
