An interesting note this morning from BMO Capital Markets economist Robert Kavcic: As Prime Minister Harper hinted last week, Ottawa reported a $5.2 billion budget deficit for FY13/14, a sharp improvement over the prior year ($18.4 billion) and much smaller than expected in the 2014 budget ($16.6 billion). As expected, there were some one-time factors at play that helped shrink last year’s deficit, including asset sales (GM shares and some real estate), assessments of non-resident income taxes and penalties for other prior-year reassessments, and a lower-than-expected Alberta flood bill. All told, these items amount to something in the neighbourhood of $5 billion, and if left out of the calculation, would leave the year-over deficit improvement roughly in-line with the pace seen in the prior two fiscal years. Beyond the one-time items, there was some real underlying improvement in revenues and spending as well, even better than expected at the time of the 2014 budget. If any of that is allowed to carry through to the current fiscal year, and if the $3 billion cushion is not needed, Ottawa will be looking at balanced books (or better) before this fiscal year is up.
Posted on: Tue, 07 Oct 2014 12:17:30 +0000
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