Federal government posts $5.5B deficit for April to December 2022

Government debt to GDP ratio will impact Canada's ratings going forward: Fitch Ratings McCormack James McCormack, managing director and global head of sovereigns for Fitch Ratings, joins BNN Bloomberg to discuss his expectations for Canada's debt and how it could influence its Fitch rating as the BoC continues to hike rates. McCormack expects the BoC's terminal rate could be 4 per cent. He also sees the need for fiscal consolidation as he doesn't think Canada will grow out of its debt situation.

OTTAWA — The federal government posted a $5.5-billion deficit during the first nine months of its 2022-23 fiscal year.

In its monthly fiscal monitor, the Finance Department says the result compared with a deficit of $70.1 billion during the same period a year earlier.

Government revenue totalled $310.0 billion for the nine-month period, up from $278.3 billion in the same period a year earlier, due to stronger economic growth and the fading effect of the COVID-19 pandemic.

Meanwhile, program expenses excluding net actuarial losses amounted to $282.4 billion for the period, down from $322.0 billion a year earlier, due to the expiration of COVID-19 measures.

Public debt charges totalled $25.8 billion for the period, up from $18.7 billion, as a result of higher interest rates and inflation.

Net actuarial losses were $7.4 billion, down from $7.7 billion.

This report by The Canadian Press was first published Feb. 24, 2023.