Federal budget deficit hits $39.4-billion - Macleans.ca

Federal budget deficit hits $39.4-billion

Will Harper have to raise taxes after all?


Finance Minister Jim Flaherty will have some explaining to do as he announces the budget on March 4. Canada’s deficit numbers from April through December 2009 have hit $39.4 billion, compared with a surplus of $0.4 billion in the same nine month period in the last fiscal year. The Department of Finance’s monthly Fiscal Monitor report attributes the deficit to lower tax revenues, an aging population and higher program expenses. 16 billion can be attributed to Canada’s Economic Action Plan. So far, the deficit numbers are in line with Flaherty’s prediction of a $56 billion deficit for the year, although his initial 2009-2010 budget called for a deficit of $33.7 billion. Parliamentary Budget Officer Kevin Page suggested last week that taxes will need to be raised to balance the budget, despite Prime Minister Stephen Harper pledge not to do so.

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