The thirteenth month

According to data released today by the Department of Finance, Canada's Federal budget deficit was C$ 314 billion for fiscal year 2020/21, which ended at the start of April. That's by far the largest deficit ever recorded, but it's significantly lower than the C$ 354 billion figure announced by Finance Minister Chrystia Freeland when she tabled her budget at the end of April, and even further below the C$ 380 billion that the Federal Government was projecting late in 2020. 

That sounds like (relatively) good news, but there's one complication.  A regular feature of Canadian Federal finances is the so-called "thirteenth month".  Under the guise of ensuring that expenditures and revenues are recorded in the correct period, the Department of Finance customarily keeps the books open for several months after each fiscal year actually ends. Today's data are already accompanied by a warning that the final deficit figure will be boosted by C$ 7 billion in new spending introduced in the budget. It is highly likely that there will be other adjustments to be made.  

The picture is further muddied by the fact that the Government is clearly gearing up to hold an election as soon as it decently can, which is to say, as soon as it can reasonably argue that the COVID pandemic is in full retreat. The government is unlikely to avoid the temptation to use the "thirteenth month" to portray the fiscal situation in the most advantageous electoral light. The final figure that appears toward the end of this calendar year may bear little resemblance to what was announced today.