The federal government started the fiscal year with the tiniest of budgetary surpluses, though the black ink is expected to turn very red in the coming months.
The Finance Department’s monthly fiscal monitor reports that the government posted a $68-million surplus for April and May, just less than last year’s total over the same period.
The federal government’s fiscal year runs from April 1 to March 31.
The surplus is not expected to last, however, as the Liberals have promised to run deep deficits over the coming years to finance major infrastructure work and more lucrative child benefits.
The feds ended up running a $21.85-billion deficit last year, and have projected a $28.5-billion deficit this year.
Program expenses increased by more than $2.6 billion in April and May compared to the same period last year, due to more money spent on seniors’ benefits and the new Canada Child Benefit.
While that outstripped the nearly $2.3-billion growth in revenues, including a major boost in GST revenues, the fiscal situation was helped by a $312-million reduction in public debt charges.
The Liberals won the 2015 election on a platform that promised annual deficits of no more than $10 billion over the next couple of years, and to eliminate the deficit by 2019-20.
They are now projecting double-digit deficits until at least 2021-22, and have not provided a timeline for when the deficit will be eliminated.