Federal government ran $120.4-billion deficit during first three months of 2020-21 fiscal year

Theglobeandmail.com
August 31, 2020

The federal government ran a deficit of $120.4-billion during the first three months of its 2020-21 fiscal year as the treasury pumped out aid to cushion the impact of the COVID-19 pandemic.

The result compared with a deficit of $85-million for the same period in the 2019-2020 fiscal year.

In its monthly fiscal monitor, the Finance Department says program expenses for the three-month period of April to June hit almost $167.9-billion, an increase of about $90.3-billion from the same period a year earlier.

Much of that bump in spending was a result of emergency aid programs the Liberals rolled out as businesses shuttered and workers were laid off, furloughed or had their hours slashed.

Major transfers to persons -- which consists this fiscal year of seniors benefits, employment insurance payments, the Canada Emergency Response Benefit and children’s benefits -- increased by 193.5 per cent year-over-year, hitting almost $70.6-billion.

Also adding to spending costs was the government’s wage subsidy program, which the fiscal monitor says cost almost $22.8-billion for the first quarter of the fiscal year.

Revenues for the period totalled $52.4-billion, were down $32-billion or 37.9 per cent compared with the same period last year, primarily as a result of the government deferring tax filing deadlines and collection.

Public debt charges decreased by about $2-billion, or 29.8 per cent, to $4.9-billion from $6.9-billion, largely reflecting lower consumer price index adjustments on real return bonds.

Last month, the Liberals projected a historic deficit of $343.2-billion for this fiscal year. The Finance Department says the figures through June remain consistent with that estimate.