Federal deficit stood at $17.8 billion in fiscal 2016-17 – lower than forecast

The federal Finance Department said in a news release that the Government of Canada ran a smaller than forecast deficit for the fiscal year 2016-17.

According to the Finance Department, Ottawa ended its 2016-17 fiscal year on March 31st of with a deficit of $17.8 billion. That was nearly $6 billion less than the $23-billion deficit that finance officials forecast in the spring budget.

In its release, the Finance Department said that federal revenues were down $2 billion, or 0.7%, compared with the previous year due to a drop in personal income tax revenue, employment insurance premium revenue and other revenues – but these declines were offset, in part, by an increase in revenue from the Goods and Services Tax (GST).

Program spending rose by $16.2 billion or 6 % due to increases in major transfers to individuals, major transfers to other levels of government and other transfer payments. Public debt charges were down $1.3 billion or 5.2% due to lower interest rates.

The total federal debt stood at $631.9 billion at March 31, 2017, up from $616 billion a year earlier. Finance Minister Bill Morneau drew criticism last week when he told the media that Ottawa plans to continue spending, notably on infrastructure projects, rather than focus on paying down the federal debt as Canada`s economy gains momentum and grows at a faster pace.