OTTAWA—Parliament’s spending watchdog says last year’s federal deficit was $800 million more than the Liberals said it was in their most recent budget.
In a new report, the parliamentary budget office says the deficit for the 2018-2019 fiscal year, which ended in March, will end up at $15.7 billion because of lower-than-expected revenues.
This year and the following three, the PBO predicts deficits will be on average $700 million higher than the Liberals outlined in the budget tabled last month.
The difference is due to the PBO’s projections of lower revenues from the federal sales tax, declines in non-resident income taxes and higher operating expenses.
Finance Minister Bill Morneau’s latest fiscal blueprint didn’t commit to returning the budget to balance this year, as the Liberals pledged in the 2015 campaign, and the PBO says there is a “near-zero likelihood” of it happening.
The PBO says the ratio of federal debt to the size of the entire economy will continue to improve, though, with an 80-per-cent chance that ratio will be below government projections in the 2020-2021 fiscal year.