OTTAWA—The federal government ended the fiscal year with a $14-billion deficit despite higher revenues, framing the fiscal challenge for political parties as they cost out their pledges and dangle the promise of balanced books.With federal political leaders on the campaign trail, Tuesday’s release of the annual financial report detailing the state of the government’s finances underscores again the Liberals’ broken 2015 election vow to balance the books by the current fiscal year.The Finance Canada report shows that the deficit was slightly less than the $14.9 billion forecast in the March 2019 budget.Personal and corporate income tax revenues rose by $12.9 billion, attributed to low unemployment, and strong company earnings in sectors such as finance, manufacturing and wholesale trade, the report showed. Higher expenses partially offset the extra revenues, notably in transfers to persons, such as seniors and children’s benefits (up by $2.3 billion), and transfers to other levels of governments for programs such as health and social services were up $5.4 billion. Direct program expenses — the cost of running 130 departments, agencies, Crown corporations and other agencies — rose by $6.9 billion, or 4.8 per cent.While Canada’s economy has performed well — unemployment is at a 40-year low — the report does caution about conditions ahead, noting that the economic expansion cooled in 2018, marked by lower oil prices and slower housing activity in the second half of the year.“There remain important uncertainties and risks in the global and domestic economies,” the report said.Kevin Page, president and CEO of the Institute of Fiscal Studies and Democracy, said the deficit, spending and revenue numbers are in line with assumptions made by the Parliamentary Budget Officer for his costings of the campaign promises by the political parties.“This is good news. A big divergence from PBO assumptions ...
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