October 19, 2018 – Ottawa, Ontario – Department of Finance Canada
The Government of Canada is committed to sound fiscal management as it continues to make investments to support long-term economic growth, help create more good, well-paying jobs, and provide more opportunities for the middle class and people working hard to join it.
The Department of Finance Canada today released the Annual Financial Report of the Government of Canada for 2017–18, which provides an overview of the Government’s spending and revenue performance for the previous fiscal year and discusses the factors affecting these results.
The Government posted a budgetary deficit of $19.0 billion for the fiscal year ended March 31, 2018, down from a projected budgetary deficit of $19.9 billion in Budget 2018, while the federal debt-to-GDP (gross domestic product) ratio stood at 31.3% at March 31, 2018, down 0.7 percentage points from the previous year.
The report also shows that the Canadian economy was remarkably strong in 2017, growing at a pace well above that of all other Group of Seven (G7) countries, and at its strongest pace since 2011.
Canadians added 427,300 jobs in 2017, leading the unemployment rate to fall to 5.8% in December 2017—matching its lowest recorded level in over 40 years.
Canada’s solid economic performance was driven by growth in consumer spending, sound regional housing markets as well as supportive monetary and fiscal policy, while stronger global economic conditions contributed to a rebound in business investment in Canada.
Going forward, the Government will continue to focus on creating economic conditions where more Canadians and more Canadian businesses succeed, and to grow the economy for the benefit of everyone.
The Government posted a budgetary deficit of $19.0 billion for the fiscal year ended March 31, 2018.
Revenues increased by $20.1 billion, or 6.9%, from 2016–17. Program expenses increased by $19.5 billion, or 6.7%, reflecting increases in all major categories of expenses. Public debt charges were up $0.7 billion, or 3.1%.
As reported by the International Monetary Fund (IMF), Canada’s total government net debt-to-GDP ratio, which includes the net debt of the federal, provincial/territorial and local governments, as well as the net assets held in the Canada Pension Plan and Quebec Pension Plan, stood at 27.8% in 2017. This is the lowest level among G7 countries, which the IMF expects will record an average net debt of 87.5% of GDP for the same year.
Real GDP grew 3.0% after posting subdued growth rates in 2015 (1.0%) and 2016 (1.4%).
Canada’s nominal GDP grew 5.4% in 2017, up from 2.0% in 2016. Both real and nominal GDP growth in 2017 were in line with the Budget 2018 forecast.
For 2017–18, there has been an accounting change in how the Government values its unfunded pension obligations, following recommendations from the Auditor General of Canada. This represents a fundamental change in the Government’s accounting approach and has been applied on a retroactive basis, resulting in a restatement of prior years’ financial results. As a result:
The projected budgetary balance for 2017–18 reported in Budget 2018 of $19.4 billion has been restated to $19.9 billion; and
Fiscal results have been restated starting in 2008–09. With the revision, the debt has been revised up over this period such that the opening balance of the federal debt for 2017–18 has been restated to 32.0% of GDP from 31.0% as originally published in Budget 2018.