Finance Minister Bill Morneau is poised to table his third budget as finance minister, a tenure marked by deep deficits with no balance in sight. While the federal government is widely expected to focus Budget 2018 on a slate of social issues, including gender equality and the rights of Indigenous peoples, there will be some key numbers to keep an eye on.

$18.6 billion

In Morneau’s fall economic statement, the federal government forecast it would run a $18.6-billion deficit in fiscal 2018-19, a substantial reduction from the $27.4 billion estimated in Budget 2017. In the statement, Ottawa revised its deficit views lower through the end of the projection horizon, forecasting the federal government will run progressively smaller deficits through 2022-23.


While the Trudeau Liberals ran on a platform calling for deficits no deeper than $10 billion a year, they’ve since said the focus will be on keeping the debt-to-GDP ratio in check. In the last economic update, Ottawa said it expected the key metric to fall to 30.2 per cent in the coming fiscal year – about 140 basis points lower than anticipated in the last budget.


Part of that rosier view for the steeper decline in the debt-to-GDP ratio is the stronger-than-expected domestic economic growth over the course of 2017. In the Federal government’s fall fiscal statement, it predicted the Canadian economy expanded 3.1 per cent last year, more than 50 per cent higher than Budget 2017’s view of two-per-cent growth.


Crude oil has been defying the Finance Department’s expectations, with West Texas Intermediate holding above US$60 per barrel. Ottawa’s 2017 Budget forecast crude wouldn’t breach that level until 2021, and would be stuck in the mid-$50 range in the interim. The meaningful recovery in oil prices has helped Canada achieve the aforementioned economic strength through the course of the last year.