Statistics Canada has released its 2016 Consolidated Government Finance Statistics and the combined deficit of all
three levels combined – federal, provincial-territorial and local – was $18.1
billion in 2016 which was up from $12.9 in 2015. According to Statistics Canada, the increase
in the combined deficit was attributable to expenses rising faster than
revenue. Government spending in Canada
in 2016 was up by 2.6% while revenues were up by 1.0 percent. The accompany chart from Statistics Canada summarizes
the picture nicely.
The federal government saw an especially
pronounced deterioration. The net
operating balance deficit for the federal government was $10.0 billion in 2016,
compared with a $2.1 billion surplus the previous year. Total federal expenses
grew 4.2%, due to an increase in social benefits (old age and family
allowances) and grants to provinces and territories expenses, while revenue actually
was down 0.1%. A big component of that revenue drop incidentally was from income tax revenue – despite the increase in personal income rates on higher earners that kicked in. For a longer term take on federal finances,
you might want to check another post of mine here.
As for the provinces, net operating
balances in deficit were reported in 9 of 13 jurisdictions with Alberta (-$9.9
billion), Manitoba and Ontario (each -$1.7 billion) having the largest deficits
in 2016. While still in deficit,
Ontario's net operating balance improved the most, due to higher revenues from corporate
income taxes and taxes on goods and services – but then Ontario’s economy in
2016 did see an improvement. As for the
largest surpluses – meet the new poster children for fiscal responsibility in
Canada in 2016: British Columbia (+$4.9
billion) and Quebec (+$4.4 billion).
