Government debt has been at record highs in Canada’s first half of 2017, with the country still in the grips of a massive economic recession.
The government posted a $6.4-billion surplus for the quarter ended March 31, a level not seen since the second quarter of 2014.
It’s the third consecutive quarter of surplus, according to the Canadian Centre for Policy Alternatives.
The surplus is the largest in six years.
The previous record was $4.2-billion in the second half of 2014 and $3.9-billion for the year ended March 30, 2016.
“This was the third-largest surplus in six-and-a-half years, which is a record,” said Rob Carrick, executive director of the CPPA.
“We expect this surplus to be much bigger next year, and it will be even larger in the years to come.”CBO data showed the Canadian economy grew by just 0.7 per cent in the first six months of the year.
That’s the slowest rate of expansion since the Great Recession.
Economists say Canada’s economy has been in free fall for the past few years, with stagnant or negative growth rates since the first quarter of 2020.
Economist Brian DePratto said Canada’s government is not able to address the deficit in the short-term, and the government needs to find new revenue to meet its spending obligations.
“They’re in an impasse,” DePratta said.
It just doesn’t work.””
The government can’t cut spending, they can’t raise taxes.
It just doesn’t work.”
DePratto says the government is “running a very big budget deficit,” which means it has to spend more to keep the economy humming.
DePratta says the deficit has ballooned from $10.6-billion to $14.6 billion.
The surplus is a massive $9.6-$11.6billion, making the budget deficit the largest since the late 1990s.
The government is also facing a $1.5-billion tax increase for people making more than $150,000, which will go into effect on March 29.
The budget deficit is expected to reach $30-billion next year.
The Liberals are looking to raise $50-billion from the sale of provincial assets, including the Saskatchewan-Alberta border.