Ottawa's Summer Spending Spree Offset by Stronger GDP and Oil Revenues

Ottawa's summer spending spree has been offset by stronger GDP and oil revenues, according to a recent report. The federal government had promised to balance its operating budget in three years' time, but Finance Minister François-Philippe Champagne announced that it will now hit this milestone next year instead of 2028.

According to Randall Bartlett, deputy chief economist at Desjardins, the government's revenue is up 10% year-over-year for the April to June period. This is significantly higher than the expected 3.5% increase for the whole year. Solid consumer spending and robust corporate profits contributed to this boost in revenues.

Another major factor has been global oil prices, which have held steady at higher levels than anticipated. The government's windfall from these higher prices has helped offset its increased spending announcements over the spring and summer.

Bartlett estimates that Ottawa has announced more than $100 billion in spending over the next 10 years since the spring update. This includes an estimate of public money needed to finance a proposed oil pipeline from Alberta to the B.C. coast.