Five things to know about the federal budget
The debt-to-GDP ratio will increase from 31.2 per cent in 2019/20 to 51.2 per cent in 2021/22
By ATB Economics 20 April 2021 1 min read
The federal government presented its first budget since 2019 yesterday. When it comes to the bottom line, five things stand out in the over 700-page document:
- Deficit: The federal deficit for the 2020/21 fiscal year is projected to come in at $354.2 billion followed by deficits of $154.7 billion this fiscal and $59.7 billion in 2022/23. The deficit before the pandemic in 2019/20 was $39.4 billion.
- Debt: The federal debt* reached $1.08 trillion in 2020/21 and will hit $1.23 trillion by the end of the current fiscal year.
- Debt as a share of GDP: The debt-to-GDP ratio will increase from 31.2 per cent in 2019/20 to 51.2 per cent in 2021/22.
- Revenue: Federal revenue fell by 11 per cent during the pandemic, but is projected to rise 6 per cent above its pre-pandemic level in 2021/22.
- Expenditure: Total federal expenditure (excluding net actuarial losses) was $362.9 billion before the pandemic in 2019/20. It rose to an estimated $634.9 billion during the fiscal year that just ended (2020/21) for an increase of 75 per cent. Spending is projected to be $497.6 billion this fiscal year (2021/22) which is 37 per cent above the pre-pandemic level.
*Net of financial and non-financial assets.
Answer to the previous trivia question: According to Statistics Canada, there were 8,894 tourism businesses in Alberta as of February 2020 before the pandemic.
Today’s trivia question: Which source of federal government revenue is larger: personal income taxes or the GST?