For the first time since 1930, Canada’s budget was in balance. The Dominion was taking in more than it was spending. Despite the summer’s crippling strikes, Government revenue from income and excess profits taxes for the first seven months of the 1946-47 fiscal year (April 1 to March 31) was a thumping $157,000,000 ahead of estimates. In the same period, Government expenses were about $200,000,000 lower than anticipated. Surplus to date: $180,000,000.*
It seemed to be no midyear freak, either. It was almost certain that the budget would still be in balance at fiscal year’s end; it was quite probable that Canada would have a surplus.
The chief reason was that cautious Finance Minister James Lorimer Ilsley had been overcautious when he predicted a $300,000,000 deficit last June. The Government had tried hard to keep expenses down. For another thing, shortages had prevented the Government from buying all it wanted. Also, some subsidies (like that on milk, which had been costing the Government about $42,000,000 a year) were ended. Even the Canadian Army was not spending as fast as it thought it would: its total expenditures for the year would probably be about $10,000,000 less than the $283,000,000 predicted.
For the Canadian people, the implications were heartening. The Government, which had timidly come up with medium-sized tax cuts last year (10-15% on the average income) might now be expected to do better. That was a fine ace for the Liberal Government to have up its somewhat threadbare political sleeve.
*These figures do not include the one billion dollars which the Government estimated it would need during the fiscal year for such things as loans to foreign countries. Such items have never, in Canada, been classified as budgetary. Of the billion, only $523,000,000 has been spent so far. Under this method of bookkeeping the U.S. budget too would definitely be in balance.
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