Federal spending hit highest mark in 6 years at start of 2016, report says

But some of the spending came from leftover commitments made by the previous Conservative government, the parliamentary budget officer’s report said.

TheStar.com
Sept. 29, 2016
By Andy Blatchford

Federal spending under the Liberal government kicked off the fiscal year by hitting its highest mark in at least six years, says a new analysis by the budget watchdog.

But some of the spending came from leftover commitments made by the previous Conservative government, the parliamentary budget officer’s report said Thursday.

Jean-Denis Frechette found that expenditures under the Trudeau government were 5.7 per cent higher - nearly $3.4 billion - in the first quarter of 2016-17, compared with the same period from the previous year.

Ottawa’s first-quarter spending reached $62.9 billion, while over the same three-month period last year the government paid out about $59.5 billion, the analysis found.

A chunk of the increased spending, including an extra $1.22 billion for child-benefit cheques, came from the Liberal government’s Tory predecessor.

However, an additional $1.22 billion was the result of a 19 per cent Liberal increase in infrastructure-related spending.

Frechette’s report said the hefty increase, which was categorized under grants and contributions to outside entities, was disbursed at an “unprecedented” rate compared to recent years.

The Liberals have committed $11.9 billion towards infrastructure spending over two years as a way to help lift the sluggish economy.

It’s unclear, however, exactly how much federal infrastructure spending over the first three months of the fiscal year came from pledges made by the Liberals and how much of it was leftover from older Conservative commitments.

Government spending on infrastructure is difficult to track because of its disbursement over extended time frames, as well as the constant re-packaging and re-announcement of various funds and projects.

The 2016 infrastructure numbers won’t be available for months, but a recent scan of government tables showed that just six of 862 approved projects so far this year were actually underway.

Still, with the aim of stimulating the economy, the Liberals have said they want to dole out infrastructure money more quickly than in the past.

“There’s a little more push to get the money out of the door,” said assistant parliamentary budget officer Mostafa Askari. “So, there’s a different approach to it in terms of how the government is managing these funds.”

Frechette’s report also said federal operating spending increased 3.6 per cent in the first quarter of 2016-17 compared to a year before, despite a decrease in employee costs.

His report found direct capital spending fell 10.5 per cent, largely due to lower procurement spending by National Defence as a result of project delays.