OTTAWA — A new analysis by the federal budget watchdog says the government is on track to run deeper-than-expected deficits in each of the next few years.
The parliamentary budget officer also says there’s only a 10 per cent chance the federal books will return to balance in 2021-22 and a 30 per cent chance of seeing black ink in 2023-24.
The report predicts Ottawa is on pace to show $19.4 billion deficit this year, which is $1.3 billion higher than the Liberal government’s projection in its budget last February.
Beyond this year, the watchdog says Ottawa will post annual shortfalls between $500 million and $2.8 billion bigger than the government’s predictions.
The report points to recent changes in how the government calculates its pension liabilities as key factors behind the higher deficits.
The fate of the budgetary balance is expected to be a major campaign issue ahead of next year’s election.
The Trudeau government has frequently come under fire from political rivals for abandoning its 2015 vow to run only modest shortfalls and to eliminate the deficit by 2019.
Last week, the government’s latest annual financial report showed Ottawa posted a $19-billion deficit last year, which was slightly smaller than the shortfall it had predicted in the budget.
The federal bottom line has received a revenue boost over the last year thanks to the stronger economy — but the Liberal government has channelled large amounts of the extra cash into new spending that it argues will lift Canada’s long-term growth.
The Canadian Press