Deputy Prime Minister and Minister of Finance Chrystia Freeland responds during question period in the House of Commons Tuesday December 1, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds during question period in the House of Commons Tuesday December 1, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

Pandemic spending sent federal deficit to $268 billion in January, feds say

Federal wage subsidy, benefits for hard-hit workers, and elevated transfers to provinces contributed to rise

The federal government says it ran a budgetary deficit of $268.2 billion through 10 months of its fiscal year as the treasury pumped out more pandemic aid.

The deficit from April to January compares to a deficit of $10.6 billion over the same period one year earlier.

The government says in its monthly fiscal monitor that the deep deficit reflects the unprecedented deterioration in the economy and the government’s spending response to the COVID-19 pandemic.

Program spending, excluding net actuarial losses, ran up to nearly $474 billion between April and January, a $216.3-billion increase from the $257.7 billion one year earlier.

The federal wage subsidy, benefits for hard-hit workers, and elevated transfers to provinces all contributed to the rise.

At the same time, revenues were $235.8 billion, a $40.5-billion drop from the same period one year earlier, as tax revenues and EI premiums decreased, and Crown corporations reported lower profits.

Public debt charges fell to $17.2 billion compared with $20.2 billion a year earlier, largely reflecting lower inflation and interest rates.

At the end of January, net federal debt was just under $1.09 trillion.

The fiscal monitor released Friday will be the last budgetary update before the government tables a budget on April 19, its first since March 2019.

The budget is expected to provide an accounting of government spending through the pandemic, which the Finance Department in November estimated will send the deficit for the fiscal year to almost $400 billion.

The Liberals have also promised a plan to spend between $70 billion and $100 billion over the coming years in fiscal stimulus to help the economy recover.

The Liberals will need the support in the House of Commons of at least one other major party to pass their upcoming spending plan.

In a letter this week, Conservative Leader Erin O’Toole told Prime Minister Justin Trudeau that he expected the budget to include no new tax increases and to ease regulations to prod business investment in machinery, technology and equipment.

The concern is that absent that spending, Canadian companies won’t be able to compete as global economies rebound, slowing growth in wages and job creation the government wants to see.

The letter went on to suggest the government avoid what O’Toole called “large, costly, and universal social programs” that could hurt economic growth, warning Trudeau that his party would resist “partisan pet projects and new unsustainable permanent spending.”

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

federal budgetfederal government

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The intersection of Despard Avenue and Moilliet Street, where a child was struck and injured in November 2020. (Mandy Moraes photo)
High-traffic Parksville intersection to get temporary 4-way stop

City staff to monitor effectiveness of traffic-calming measure at Despard and Moilliet

A Parksville Fire Department’s firefighter hoses down the facade of a Parksville Heritage Centre building after it caught fire on Friday afternoon (April 16). (Michael Briones photo)
Fire crews, roofers work to douse building fire in Parksville

Damage was minimal and workers escaped injury

Cast and crew of the Hallmark Channel series ‘Chesapeake Shores’ as they film at Parksville beach on April 15, 2021. (Mandy Moraes photo)
Fifth season of ‘Chesapeake Shores’ looks to showcase Parksville Qualicum Beach region

Executive producer: ‘We’re really excited for the fans to experience the fifth season’

Vancouver resident Beryl Pye was witness to a “concerning,” spontaneous dance party that spread throughout social groups at Kitsilano Beach on April 16. (Screen grab/Beryl Pye)
VIDEO: Dance party erupts at Vancouver’s Kitsilano Beach to the dismay of onlookers

‘It was a complete disregard for current COVID-19 public health orders,’ says Vancouver resident Beryl Pye

The B.C. Centre for Disease Control has listed Harbour Air and Air Canada flights to and from Nanaimo, from April 3, 4 and 12, on its list of flights with COVID-19. (News Bulletin file)
COVID-19 cases reported for Nanaimo flights, says disease control centre

Nanaimo flights for April 3, 4 and 12 listed on BCCDC’s list of flights with COVID-19

Russ Ball (left) and some of the team show off the specimen after they were able to remove it Friday. Photo supplied
Courtenay fossil hunter finds ancient turtle on local river

The specimen will now make its home at the Royal BC Museum

Pall Bearers carrying the coffin of the Duke of Edinburgh, followed by the Prince of Wales, left and Princess Anne, right, into St George’s Chapel for his funeral, at Windsor Castle, in Windsor, England, Saturday April 17, 2021. (Danny Lawson/Pool via AP)
Trudeau announces $200K donation to Duke of Edinburgh award as Prince Philip laid to rest

A tribute to the late prince’s ‘remarkable life and his selfless service,’ the Prime Minister said Saturday

B.C. homeowners are being urged to take steps to prepare for the possibility of a flood by moving equipment and other assets to higher ground. (J.R. Rardon)
‘Entire province faces risk’: B.C. citizens urged to prepare for above-average spring flooding

Larger-than-normal melting snowpack poses a threat to the province as warmer weather touches down

Vancouver-based Doubleview Gold Corp. is developing claims in an area north of Telegraph Creek that occupies an important place in Tahltan oral histories, said Chad Norman Day, president of the Tahltan Central Government. (THE CANADIAN PRESS/HO)
B.C. Indigenous nation opposes mineral exploration in culturally sensitive area

There’s “no way” the Tahltan would ever support a mine there, says Chad Norman Day, president of its central government

Stz’uminus Elder George Harris, Ladysmith Mayor Aaron Stone, and Stz’uminus Chief Roxanne Harris opened the ceremony. (Cole Schisler photo)
Symbolic red dresses rehung along B.C. highway after vandals tore them down

Leaders from Stz’uminus First Nation and the Town of Ladysmith hung new dresses on Sat. April 17

A Western toadlet crosses the centre line of Elk View Road in Chilliwack on Aug. 26, 2010. A tunnel underneath the road has since been installed to help them migrate cross the road. Saturday, April 24 is Save the Frogs Day. (Jenna Hauck/ Progress File)
Unofficial holidays: Here’s what people are celebrating for the week of April 18 to 24

Save the Frogs Day, Love Your Thighs Day and Scream Day are all coming up this week

Local carpenter Tyler Bohn embarked on a quest to create the East Sooke Treehouse, after seeing people build similar structures on a Discovery Channel show. (East Sooke Treehouse Facebook photo)
PHOTOS: B.C. carpenter builds fort inspired by TV’s ‘Treehouse Masters’

The whimsical structure features a wooden walking path, a loft, kitchen – and is now listed on Airbnb

Most Read