Budget should place the spotlight on affordable childcare: Scotiabank economist
The federal Liberal government’s fiscal balance is showing a “remarkable pace of improvement,” suggesting that Finance Minister Bill Morneau may have some wiggle room for this year’s budget, according to Bank of Montreal Chief Economist Doug Porter.
“Suffice it to say that Ottawa has plenty of room to manoeuvre to cut the deficit, spend on programs, or (gasp!) cut taxes,” Porter wrote in a note to clients Wednesday. “The budget will thus be a true litmus test of where their priorities lie.”
Porter is referring to the Liberal government’s latest fiscal monitor released last week, which showed that Ottawa racked up a $324-million surplus for the first nine months of the fiscal year, compared to an $8.9-billion deficit in the same period a year ago.
“While there is a lot of seasonality to monthly budget figures, the 12-month rolling tally has also strengthened by over $9 billion (0.4 per cent of GDP) — a remarkable pace of improvement,” Porter added. “For example, the fall update just three months ago called for this year’s deficit to be almost unchanged from last year ($18.1 billion versus $19 billion).”
Porter also noted that the “big surprise” has been in revenue, which is “currently thundering along.”
Overall revenue rose $19.3 billion, or 8.7 per cent, compared with the same period last year, according to the Finance Department, boosted by higher tax revenue and incoming employment insurance premiums.
Morneau is scheduled to release the federal budget on March 19.