The Parliamentary Budget Officer (PBO) has warned that Canada’s deficit will likely be higher once the Liberals start implementing their campaign commitments. The PBO says the deficit is on track to reach $23 billion by 2021. In comparison, Canada’s federal deficit was $14 billion for the 2018-2019 period.
The prediction was made in the November 2019 “Economic and Fiscal Outlook” report which downgraded the country’s economic outlook.
“We have downgraded our outlook for growth in the Canadian economy and we are projecting larger budgetary deficits compared to our June 2019 baseline,” said PBO Yves Giroux in a news release.
“This outlook does not include commitments made by any party during the 2019 general election campaign. It is expected that budgetary deficits will be higher than our status quo projection once these commitments start being implemented,” writes the PBO press release.
Average deficits are expected to be $1.6 billion larger each year moving forward until they peak in 2020-2021.
The report points to a slowed-down Canadian economy with declining real GDP growth since a high of 1.9% in 2018.
The PBO has also indicated that it is “unlikely” that the budget will be balanced by 2024 considering the current economic outlook.
Last month, unemployment stagnated at a national average of 5.5% and the country lost 1,800 net jobs, with a total of 16,100 full-time positions being lost in October.
In April, it was revealed that nearly half of all Canadians (48%) report that they are $200 or less from financial insolvency on a month by month basis.