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

Just Posted

St. Joseph's Mission site is located about six kilometres from Williams Lake First Nation. (Photo submitted)
Williams Lake First Nation planning ground analysis of land near former residential school

St. Joseph’s Mission Indian Residential School operated from 1886 to 1981

Free boxes of fresh produce are currently being provided in Quesnel by the Canadian Mental Health Association of Northern BC thanks to a donation from West Fraser Mills. (File photo)
Fresh produce available for those in need in Quesnel

Donation allows Canadian Mental Health Association to provide free fruits and veggies

Elizabeth Pete is a survivor of St. Joseph’s Mission in Williams Lake. (Patrick Davies photo - 100 Mile Free Press)
WATCH: Kamloops bound convoy greeted by Canim Lake Band along Highway 97

Well over two dozen members of the Tsq’escenemc people (Canim Lake Band) showed up

Five rehabilitated grizzly bears were released this month into the Bella Coola area. The Northern Lights Wildlife Society will also be delivering 36 black bears to areas across the province where they were previously found. “They’re ready to go and they’re already trying to get out,” says Angelika Langen. “We feel good when we can make that possible and they don’t have to stay behind fences for the rest of their lives.” (Northern Lights Wildlife Society Facebook photo)
At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Police cars are seen parked outside Vancouver Police Department headquarters on Saturday, January 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver police officer charged with assault during an arrest in 2019

The service has released no other details about the allegations

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Denmark soccer player Christian Eriksen collapses during game against Finland

Eriksen was given chest compressions after collapsing on the field during a European Championship

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Nathan Watts, a member of the Tseshaht First Nation near Port Alberni, shares his story of substance use, a perspective he said isn’t seen enough. (Photo courtesy of Nathan Watts)
Public shaming, hate perpetuates further substance use: UVic researcher

Longtime addict Nathan Watts offers a user’s perspective on substance use

57-year-old Kathleen Richardson was discovered deceased in her home Wednesday, June 9, 2021. Her death is considered a homicide and connected to the slain brothers found on a Naramata forest road. (Submitted)
Condolences pour in for Kathy Richardson, Naramata’s 3rd homicide victim in recent weeks

Richardson was well liked in the community, a volunteer firefighter with a home-based salon

Most Read