Heading into an election year, the federal New Democratic Party fell deeper into a financial hole in 2018, hitting a low the party hasn't seen in at least 17 years.

Elections Canada posted the party's annual financial return online on Thursday, showing the NDP finished last year with assets worth $4.7 million and liabilities totalling $9.2 million, leaving the party with negative net assets of $4.5 million.

That put the party deeper in the red than it was in 2017, when the NDP's balance sheet showed negative net assets of $3.1 million — which was the party's worst recorded financial standing for any fiscal year since before 2001, the earliest year for which party records are posted on Elections Canada website.

The party also spent more money than it had coming in, running a $1.4 million operating deficit in 2018. That's largely on par with 2017. The NDP also had less cash in the bank — almost $155,000 in 2018 compared to more than $378,000 in 2017.

The party has said the 2018 balance sheet doesn't include the value of the Jack Layton building it owns in downtown Ottawa. The building and the land it sits on were appraised last year at close to $8 million, according to the filings.

"With the dramatic increase in the value of the building, we were able to securitize our loan," said spokesperson Melanie Richer in a statement to CBC News.

Karl Bélanger, the former principal secretary to past NDP leader Tom Mulcair, said the building is an asset because the party can borrow against it to fund the campaign. Still, he said the party's finances could have an impact on its campaign.

"It's going to be difficult for the NDP to run a full campaign this time around," he said. "I think they know that and are taking steps to address it, but clearly more needs to be done and time is running out."

The NDP has been struggling as well to nominate a full slate of candidates. Richer said that the party had nominated 184 candidates as of Wednesday night and was on track to have 271 nominated by the end of next week.

Impact on campaign

The NDP has said it plans to run a more targeted campaign with a leaner staff complement, more time travelling by bus and fewer days on a plane.

Party leader Jagmeet Singh told journalists at an announcement about student debt in Toronto Thursdaymorning that his party is running a full campaign and is still chartering a plane.

"We're going to have buses, we're going to have planes, we're going to be able to get across this country," he said.

The financial returns also show the NDP's donations and contributions are up slightly year over year, from roughly $5,144,000 in 2017 to around $5,226,000 in 2018.

Compared to other three main parties that filed their returns earlier this summer, the NDP was in rough financial shape.

Conservatives had net assets of $5.1 million in 2018, an operating surplus of $3.6 million and $9.9 million in cash last year. The Liberals followed with $1.7 million in net assets and an operating surplus of just over $4,000. The Greens ended the year with $1.2 million in net assets and $1.1 million in the bank.

Office expenses cut in half

The party cut its office expenses roughly in half compared to 2017, when a leadership race imposed additional costs, but recently increased staff salaries and benefits by almost $165,000 year over year. Fundraising expenses also went up by close to $330,000 and travel and hospitality by more than $228,000.

The party carried over debt from the 2015 election, said Belanger. That happens for most parties after an election, but this time around the party had trouble paying it off, he added.

As a way to save money, the NDP started phasing out its contract with a call centre in 2018 that handled fundraising, according to NDP National Director Melissa Bruno. A team now does fundraising calls in-house, saving the party about half of the cost of the initial contract, she said .

The NDP also overhauled its fundraising system last year, inaugurating events called "Jagmeet and Greets" at supporters' homes. The party cut back on its mail fundraising program and now only targets people by mail who donated that way in the past, said Bruno.

Bruno said the party has turned its financial situation around this year. Fundraising is up compared to the past few years and is comparable to Jack Layton's team between 2008-2011, Bruno said. The first and second quarter numbers total $2.63 million, an increase over the last three years, said Richer.

"We have been consistently beating our projections since the beginning of the year, some months by almost 60 per cent," Richer said in a statement.

Belanger said the NDP should try to use this election to get out of the red.

"The key for them is to use the campaign to raise as much money as possible, in order to not end up at the end of the campaign with a debt that is out of control," he said.