Canadian General Government Posts $73.7 Billion Deficit In 2023

The Canadian general government (CGG), which includes federal, provincial, territorial and local governments, recorded a deficit of $73.7 billion in 2023, marking a significant shift from the $3.3 billion surplus in 2022. This reversal was primarily driven by a substantial increase in expenses, which outpaced revenue growth.

The Canadian federal government’s deficit expanded to $52.3 billion in 2023, up $43.1 billion from the previous year. Meanwhile, consolidated provincial, territorial, and local governments (PTLGs) posted a $21.5 billion deficit, contrasting with their $12.5 billion surplus in 2022.

As a percentage of GDP, the CGG deficit stood at 2.5% in 2023, compared to a 0.1% surplus in 2022. The federal government’s deficit-to-GDP ratio increased to 1.8% from 0.3%, while PTLGs recorded a deficit of 0.7% of GDP.

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The surge in federal government expenses, up 14.7% to $66.9 billion, was partly attributed to one-time exceptional transfers. These included settlements for First Nations Child and Family Services ($23.3 billion) and the Robinson Huron Treaty ($5.0 billion).

Interest expenses for the Canadian general government rose sharply for the second consecutive year, increasing by $17.2 billion (+22.5%) to reach $93.8 billion in 2023. This rise was due to higher debt refinancing costs and increased gross debt levels.

Despite these challenges, Canada’s fiscal burden remained relatively stable at 34.9% of GDP in 2023. The CGG, Canada Pension Plan, and Quebec Pension Plan collectively gathered $1,023.0 billion in taxes and social contributions.

Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.