OTTAWA –
The federal Liberal party’s latest budget announced new spending primarily on the clean economy and healthcare, but even with that relatively tight focus, the federal government is expected to continued deficit in the next 5 years.
Many economists are expressing disappointment over the federal budget and its financial projections, noting that the government could be in trouble if the economy slows more than expected.
Finance Minister Chrystia Freeland promised that Tuesday’s budget would be financially constrained as a slowing economy could weigh on government coffers.
But fiscal projections in the budget show the deficit has been revised upwards since the fall, suggesting the deficit shows no sign of ending, although a November fall budget update is expected. balance budget for the year 2027-28.
Tuesday’s budget forecasts a $14 billion deficit in 2027-28 and a larger annual deficit than previously expected.
Former congressional budget official Kevin Page said it was not surprising that the deficit was higher than forecast in the fall, given that the economic outlook has deteriorated since then.
This report by The Canadian Press was first published on March 29, 2023.
