OTTAWA – The federal government posted a surprise $1.9-billion surplus in 2014-15 – bringing the country’s books back into balance a year earlier than expected.
The Finance Department released year-end figures Monday for a period that was supposed to instead generate a $2.0-billion shortfall.
The number ends a streak of six deficits under the Conservatives and is certain to reverberate on the campaign trail.
The fiscal report also tees up Thursday’s leaders’ debate, which will focus on the economy.
Political leaders have jockeyed to portray themselves as the best managers of the public piggy bank as the economy has struggled amid the steep slide in commodity prices.
WATCH ABOVE: Stephen Harper says the current budget surplus arose from revenues and not under spending.
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The result pleased Conservative Leader Stephen Harper, whose government had forecasted a $2.0-billion deficit for 2014-15 in its April budget.
Harper issued a statement crediting “careful economic stewardship” for guiding the budget to balance a year ahead of schedule.
WATCH ABOVE: Liberal leader Justin Trudeau says Stephen Harper made billions of dollars in cuts last year so he could balance the books in time for the election.
The Finance Department said the $3.9-billion swing from the expected shortfall to surplus was largely due to higher revenue – from personal and corporate income taxes – that rang in $3.0 billion higher than projected as well as positive year-end adjustments.
The report also found expenditures were lower. Program spending was $800 million lower than forecast, while public debt charges were $100 million lower than expected.
Looking forward, the Tories have predicted a $1.4-billion surplus for the current 2015-16 fiscal year – a projection opponents insist the government is unlikely to hit.
Political rivals charge that Ottawa is instead on track to run a shortfall in the current fiscal year because the economy contracted over the first two quarters of 2015 and pushed the country into a technical recession.
Harper, who has noted that experts have predicted the economy to bounce back over the second half of the year, has insisted the government will produce a surplus in 2015-16.
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He has repeatedly pointed to early numbers released by the Finance Department as evidence the country is on track.
Last month, the Finance Department reported a $5-billion surplus for the April-June quarter.
Harper’s opponents have dismissed it as preliminary data, a tally that received a $1-billion boost from a one-time asset sale of taxpayers’ General Motors shares.
Government officials routinely warn that a few months of information do not necessarily paint the picture for the whole year.
In July, the parliamentary budget officer released an analysis based on downgraded Bank of Canada projections that showed Ottawa was headed for a $1-billion shortfall in 2015-16. The calculation whipped up doubt about the Conservatives’ long-standing promise to balance the election-year books.
The debate over balancing the budget has, at times, dominated political discourse during the election campaign.
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“According to a wide range of experts, we are in deficit right now – Mr. Harper has put us in deficit this year,” Liberal Leader Justin Trudeau said Monday when asked about the 2014-15 numbers.
Trudeau accused Harper of implementing billions of dollars in underspending and cuts to veterans, seniors and aboriginal programs in order for him to balance the books before the election.
“It was a political goal that actually has helped us slide into the recession,” he said.
Trudeau has set his party apart from the Conservatives and the NDP by committing to run shortfalls before balancing the budget in 2019. He says his plan, which includes investing in infrastructure, will spur economic growth.
The New Democrats have pledged to balance the books next year despite their big-ticket promises that include a plan to create one million $15-a-day child-care spaces. Once fully implemented, the program would cost taxpayers an estimated $5 billion annually.
To help pay for its commitments, NDP Leader Tom Mulcair has vowed to erase the Tories’ controversial $2-billion-a-year income-splitting measure for families with kids. Mulcair is also pledging to raise corporate tax rates by an as-yet-unspecified amount and close a tax loophole on CEO stock options.
The NDP, which has come under pressure to release its numbers, has said it will unveil its costed platform before a debate Thursday.
The Finance Department the 2014-15 surplus follows the $5.2-billion deficit posted by Ottawa in 2013-14.
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