credit and debt
NOT QUITE IN GOOD STEAD, BUT LESS IN THE RED
As the need for pandemic-related stimulus and support wanes, federal government finances make a meaningful march away from the mendoza line.
As quickly as they were implemented they became things of the past (we hope!): CERB. CEWS. CEBA. The financial supports for businesses and households that were swiftly put into place early in the pandemic were hugely impactful, providing a sort of bridge financing through what was always going to be a transitory economic disruption. But these things cost money, and at a time when government tax revenues were also down, the result was monthly federal deficits here in Canada like we had never before seen, beginning in earnest in April 2020, when the monthly budgetary balance fell
to -$42.8 billion. Indeed, through the remainder of 2020, the average monthly federal deficit was -$26.3 billion, compared to average of -$1.3 billion over the prior three years. The good news (in addition to said accumulated debt costing less to service today than at any point in history) is that federal deficits, since then, have been shrinking, averaging -$11.3 billion, including a $3.6 billion surplus in December 2021—another sign that we are getting close to putting the pandemic economy in our rearview mirror.
(NO?) DEFICIT OF SPENDING
$10
$3.6 B
0
-$10
-$5.2 B
-$20
monthly average Mar 2020 -Dec 2020 -$26.3 BILLION
-$30
monthly average Jan 2021 -Dec 2021 -$11.3 BILLION
-$40
-$50
DATA: MONTHLY BUDGETARY BALANCE (BILLIONS $), CANADA
SOURCE: STATISTICS CANADA. TABLE 10-10-0133-01
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