Canadian Government's Finances in 2023

Preliminary 2023 figures from Statistics Canada indicate Canada’s consolidated general government (CGG) recorded a deficit of $73.7B in 2023, reversing a $3.3B surplus in 2022. Revenue increased by 2.5% to $1.1T, with taxes on income, profits, and capital gains contributing $525.7 billion, while taxes on goods and services added $240.2 billion. Social contributions rose to $44.8 billion, reflecting modest growth across multiple revenue streams. However, this was outpaced by a 9.7% rise in expenses, which reached $1.18T.

Key spending areas included employee compensation at $337.7B and social benefits at $197.2B, driven by higher costs for programs like Old Age Security and the Canada Childcare Benefit. Interest expenses surged 22.5% to $93.8B due to rising debt refinancing costs, with federal interest payments accounting for $17.2B of the increase. Additionally, large one-time federal transfers, such as court settlements and debt forgiveness, further widened the fiscal gap.

As a percentage of GDP, the CGG deficit stood at 2.5%, up from a 0.1% surplus in 2022. Provincial and territorial governments also saw a return to deficits, with Ontario, Quebec, and British Columbia posting notable deficits while Alberta posted the largest surplus. This underscores the ongoing fiscal pressures amid rising costs and economic headwinds.