TAX REFORM IS NEVER EASY

 

Finance Minister Bill Morneau did not have a very good summer. So far the fall has also not been good to the Finance Minister and, unfortunately, it is unlikely that the months leading up to the 2018 budget will get any better for him. He has only himself, or perhaps his department, to blame for his unhappiness.

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Fiscal Monitor for April – July 2017 Budget Outlook improving compare to Last Budget


The federal government posted a budgetary deficit of $193 million in July 2017, compared to deficit of $1.8 billion in July 2016. This improvement was largely attributable to strong growth in tax revenue, up 9.5% over the same period last year.
For the first four months of fiscal year 2017-18, the federal government recorded a deficit of $109 million, compared to a deficit of $2.8 billion for the same period in 2016-17. 

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Deficit for 2016-17 Much Lower than Forecast: Future Deficits Could Also Be Lower Final audited financial results for 2016-17 were released on September 19th by the Department of Finance in the Annual Financial Report. The deficit for 2016-17 was reporte


Final audited financial results for 2016-17 were released on September 19th by the Department of Finance in the Annual Financial Report.  The deficit for 2016-17 was reported at $17.8 billion (about 0.8% of GDP)  $11.6 billion lower than that forecast in the March 2016 Budget and $5.3 billion lower than the revised estimate contained in the March 2017 Budget. Over half of the better-than-expected outcome relative to the March 2016 Budget was attributable to the inclusion of a $6 billion Contingency Reserve, which was not required.

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Fiscal Monitor for April – May 2017: A Small Surplus That Is Not Expected to Last


For the first two months of fiscal year 2017-18, the federal government posted a surplus of $68 million, compared to a surplus of $114 million from the same period in 2016-17. The slight deterioration in the surplus was largely attributable to a 28.3% year-over-year increase in the Canada Child Benefit, reflecting the 2016 Budget measures, which came into effect in July 2016.

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Fiscal Monitor for April – May 2017: A Small Surplus That Is Not Expected to Last


For the first two months of fiscal year 2017-18, the federal government posted a surplus of $68 million, compared to a surplus of $114 million from the same period in 2016-17. The slight deterioration in the surplus was largely attributable to a 28.3% year-over-year increase in the Canada Child Benefit, reflecting the 2016 Budget measures, which came into effect in July 2016.

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Final Outcome for 2016-17 will Depend on Impact of Tax Planning on Personal Income Tax results

In the March 2017 Budget, the Minister of Finance lowered his deficit forecast for 2016-17 from $25.1 billion to $23.0 billion. This improvement of $2.1 billion was primarily due to better-than-expected economic conditions and an increase in the lapse ($3.2 billion). These improvements were partially offset by provisions for anticipated Cabinet decisions ($0.9 billion) and the impact of new policy initiatives proposed in the March 2017 Budget ($0.3 billion).

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