How big will it be? Finance minister to give Canadians sense of federal deficit

By , on February 21, 2016


(ShutterStock image)
(ShutterStock image)

OTTAWA – The federal finance minister is poised to provide Canadians a better sense of the size of the budgetary deficit for the coming year.

A government official says Bill Morneau will deliver a presentation Monday to update the country on the government’s fiscal and economic situation.

The source, speaking on condition of anonymity because the details were not yet public, says Morneau will avoid providing a hard number on the shortfall because the upcoming budget has yet to be completed.

Morneau recently heard downgraded forecasts from private-sector economists whose projections are averaged to create a fiscal baseline for Ottawa’s budget, expected late next month.

Morneau’s announcement will come as the new Liberal government tries to find ways to fulfil big-ticket spending election promises amid tough economic conditions that are slashing billions from its bottom line.

Prime Minister Justin Trudeau recently acknowledged that his government would no longer live up to its pledge to keep the 2016-17 deficit under $10 billion.

Trudeau also raised doubts whether the Liberals would fulfill its vow balance the books within four years – a central pledge in their election platform.

The government has instead been emphasizing its other promise to continue lowering Canada’s debt-to-GDP ratio during its mandate. Experts have said Ottawa could run annual deficits as high as $25 billion and still shrink that ratio.

Conservative finance critic Lisa Raitt has accused the Liberals of breaking election promises.

Raitt asked Morneau on Thursday in the House of Commons if a $30-billion shortfall would remain within his fiscal plan.

“We aim to get to a balanced budget over time, recognizing that our economy makes that more challenging,” Morneau said in response to Raitt.

“That remains a very important goal for this government.”

Morneau has also reiterated the Liberals’ intention to prioritize spending measures to boost the economy and create jobs. To generate growth, the government is banking on increased infrastructure investments, tax-bracket changes to provide relief on the middle-income bracket and changes to child benefits.