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Economic Viewpoint

The Devil’s in the Details: What the Fiscal Monitor Tells Us about the State of Federal Finances

June 11, 2024
Randall Bartlett
Senior Director of Canadian Economics

Once again, the federal Fiscal Monitor for March implied the Government of Canada ran a much bigger deficit last year than was published in the budget, at $50.9B versus $40B respectively. Federal debt is estimated to have been similarly higher, seemingly corroborating this estimate. As such, it’s no surprise that some fiscal analysts may be tempted to accept this as fiscal fact.

However, the March Fiscal Monitor often misses the mark for a few reasons. First, personal income tax (PIT) revenues almost always come in higher than estimated in the Fiscal Monitor. Second, other transfer payments are also often higher, providing an offset to greater PIT. While these adjustments aren’t always a wash, we think they largely will be in the 2023–24 fiscal year. Finally, the Fiscal Monitor doesn’t correct for the final audited numbers in the prior fiscal year.

Taken together, we think this points to a deficit between $40B and $45B last year—slightly larger than estimated in Budget 2024 but smaller than suggested in the March 2024 Fiscal Monitor.

But regardless of the size of the deficit, all measures of federal debt came in modestly higher than expected in both Budget 2024 and the prior fiscal year—in absolute terms and relative to GDP. This is a cautionary sign for a government hoping to demonstrate fiscal prudence. 

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.