2008 federal deficit hit $5.8B, audit reveals

Ottawa posted a federal deficit of nearly $6 billion last year, an audit confirms.

Ottawa posted a federal deficit of nearly $6 billion last year, an audit has confirmed.

Finance Minister Jim Flaherty released an audited report on Friday that shows Canada's budget deficit came in at $5.8 billion in fiscal 2008. ((Jim Ross/Canadian Press))

According to the Government of Canada's audited annual report released by the Finance Department on Friday, the deficit came in at $5.8 billion for fiscal year 2008. By contrast, Ottawa posted a $9.6-billion budgetary surplus the previous year. 

The figures are considered audited in that the government has received an "unqualified audit opinion" on them from the auditor general of Canada, the Finance Department said. An unqualified audit opinion is one without any restricting or limiting circumstance.

In much the same way publicly traded corporations release annual reports, the government report provides an overview of financial results for the fiscal year ended March 31, 2009.

Total revenues fell to $233.1 billion in 2008, down from $242.4 the previous year, the report shows. But government spending on programs increased to $207.9 billion, compared with $199.5 billion the previous year.

The discrepancy between income and expenses is made up by the $31 billion Ottawa spent on public debt charges. The figure was $33.3 billion in 2007.

Corporate income tax revenues fell $11.2 billion, reflecting both weaker profits and the impact of tax reductions, the report said. GST revenues declined $4.2 billion, reflecting the one-percentage-point reduction in the GST rate effective Jan. 1, 2008.

The final audited figure for 2008 is $1.8 billion higher than the $3.9 billion deficit forecast in June.

"This is largely because expenses were $1.5 billion higher than estimated, reflecting a larger-than-anticipated decline in the creditworthiness of the Government’s tax receivables," the department said in a release.

$56B deficit forecast in current fiscal year

The federal government's debt-to-gross domestic product ratio was 29 per cent for the year. The ratio is used to describe a country's total debt load compared with its total economic output, in much the same way as individuals assess their own personal debt loads within the context of their income or net worth.

The figure was down 0.9 percentage points from a year earlier and down 39.4 percentage points from its peak of 68.4 per cent in 1995. The debt-to-GDP ratio in 2008–09 was at its lowest level since 1979, the department said.

Ottawa is forecasting a $56-billion deficit in the current fiscal year, higher than the $50.2 billon anticipated in June and the $33.7 billion initially forecast in the budget in January.