Government finance statistics, first quarter 2024
Released: 2024-06-25
Canadian general government deficit widens due to increase in spending
In the first quarter, the Canadian general government recorded a deficit of $11.7 billion, a $6.5 billion increase compared with the same quarter one year earlier. The deficit expansion was due to a $22.0 billion increase in expenses, outpacing the $15.4 billion growth in revenue mainly attributable to personal and corporate income taxes.
The increase in expenses in the first quarter was mainly the result of higher compensation of employees (+$8.0 billion; +9.5%) observed at all levels of government. Social benefits rose by $4.7 billion (+6.3%), driven by increased Old Age Security benefits explained by higher payouts and more beneficiaries. Meanwhile, interest charges increased by $3.7 billion (+17.2%), primarily attributable to the federal government.
In the first quarter, the federal government's deficit increased by $9.9 billion from the same quarter the previous year and stood at $19.5 billion. The provincial and territorial governments deficit declined by $4.9 billion to $12.3 billion, compared with a deficit of $17.2 billion one year earlier.
Meanwhile, social security funds (Canada Pension Plan and Québec Pension Plan) recorded a $15.3 billion surplus in the first quarter, an increase from one year earlier, driven by higher social contributions (+$3.0 billion).
Overall, the Canadian general government posted a deficit equivalent to 1.7% of nominal gross domestic product (GDP) in the first quarter, marking the highest deficit-to-GDP ratio since the second quarter of 2021 (3.7%). The federal government's deficit-to-GDP ratio reached 2.8% in the first quarter of 2024, and the provincial and territorial governments' deficit represented 1.8% of GDP.
Chart 1
Canadian general government deficit as a percentage of nominal gross domestic product
Federal government spending grows significantly faster than revenue
In the first quarter, the federal government's expenses increased by $15.2 billion (+12.0%) year over year, while revenue increased by $5.3 billion (+4.5%). The main contributors to the notable growth of the federal government's expenses were other expenses and interest charges.
The federal government's other expenses increased by $4.4 billion (+68.3%) year over year in the first quarter, a significant growth mainly due to the partial debt forgiveness related to the Canada Emergency Business Accounts loans.
Interest expenses incurred by the federal government (+31.0%) grew considerably from one year earlier and stood at $11.7 billion in the first quarter. This increase was primarily due to higher outstanding debt securities and, to a lesser extent, higher interest rates. The ratio of interest expenses to revenue strongly increased to 9.6% in the first quarter, compared with 7.6% one year earlier. As a result, the federal government devoted 9.6 cents of every dollar of revenue to the payment of interest, while provincial and territorial governments devoted 7.1 cents.
Chart 2
Canadian general government interest expenses
Canadian general government's net debt increases
The Canadian general government's net debt increased by $48.4 billion (+9.2%) year over year and stood at $572.6 billion at the end of the first quarter.
The increasing value of the government's financial assets (+$136.7 billion; +4.8%) in the first quarter was not enough to offset the growth in the value of liabilities (+$185.1 billion; +5.5%). Year over year, outstanding debt securities, notably bills and bonds, increased by $166.4 billion, of which $96.6 billion came from the federal government and $57.7 billion, from the provincial and territorial governments.
Year over year, the net financial worth of social security funds increased by $54.5 billion (+7.9%) in the first quarter. Excluding social security funds, the Canadian general government's net debt increased by $102.9 billion (+8.5%) year over year in the first quarter.
Compared with the first quarter of the previous year, the federal government's net debt increased by $58.5 billion (+7.1%) in the first quarter, while that of provincial and territorial governments rose by $36.6 billion (+10.7%).
In the first quarter, the Canadian general government's net debt as a percentage of nominal GDP stood at 19.6%, up from 18.5% the previous year. Excluding social security funds, for which financial assets are earmarked for the payment of future benefits, the net debt-to-GDP ratio grew to 45.2%, up from 42.8% in the first quarter of 2023.
Chart 3
Net debt as a percentage of nominal gross domestic product by government subsector
Did you know we have a mobile app?
Download our mobile app and get timely access to data at your fingertips! The StatsCAN app is available for free on the App Store and on Google Play.
Note to readers
Quarterly financial data for the Canadian general government and its subsectors from the first quarter of 1990 to the first quarter of 2024 are now available. These subsectors include the federal government, provincial and territorial governments, local governments and the Canada Pension Plan and the Québec Pension Plan.
Government Finance Statistics (GFS) present fiscal statistics using the standard developed by the International Monetary Fund. This standard allows consistent aggregation and analysis between participating countries.
In GFS standards, the net operating balance is the difference between revenues and expenses for a given period and is a summary measure of the sustainability of government operations. When revenues are lower than expenses, a deficit is recorded, while the reverse induces a surplus.
The net financial worth is the difference between financial assets and liabilities at market prices for a given period and is a key indicator to assess the sustainability of fiscal policy. This measure is equivalent to the reverse value of net debt, a measure commonly used in the government's financial statements.
Currently, GFS quarterly data are derived by mapping Canada's System of National Accounts data to GFS standards and conventions.
This release of GFS includes revised data from the first quarter to the fourth quarter of 2023.
Next release
Data on the Canadian government finances statistics for the second quarter of 2024 will be released on September 24.
Products
Additional information can be found in the Latest Developments in the Canadian Economic Accounts (13-605-X). The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available. This publication has been updated with Chapter 9. Government Finance Statistics.
Contact information
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).
- Date modified: