Canada’s deficit lower than expected but Omicron, B.C. floods eat into windfall – National | Globalnews.ca

The Liberals have found themselves with a financial windfall amid an economic rebound, though the extra room is largely spoken for thanks to COVID-19 measures and relief for flooded British Columbia.

Finance Minister Chrystia Freeland‘s update released today shows that the deficit for this year is on track to hit $144.5 billion, below the government’s previous forecast of a $154.7 billion deficit.

READ MORE: Challenges fuelling Canada’s hot housing market will take ‘years’ to fix: Freeland

The better-than-expected result is largely from new tax revenues that gave the government $38.5 billion in extra spending room.

But the update shows how quickly that extra room has been eaten up by $28.4 billion in new and preplanned spending since April’s federal budget.

READ MORE: ‘Significant uncertainty’ making speed of Canada’s economic recovery tough to predict: government

Among the measures are $5 billion to help British Columbia rebuild after devastating flooding and $4.5 billion to respond to the Omicron variant of COVID-19, including measures at the border and benefits for workers subject to a lockdown.

The update also doesn’t include tens of billions in Liberal campaign pledges.

READ MORE: Freeland to hold fiscal update virtually after staffers test positive for COVID

Freeland did not appear in person to provide her accounting of federal finances today because of concerns over COVID-19.

Freeland said on Twitter that two of her staffers tested positive after taking rapid antigen tests and that while she has had two negative molecular tests, she will present her update virtually out of “an abundance of caution.”

More to come.