Prime Minister Justin Trudeau stands with Bill Morneau as he remains Minister of Finance during the swearing-in of the new cabinet at Rideau Hall in Ottawa on Wednesday, Nov. 20, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Prime Minister Justin Trudeau stands with Bill Morneau as he remains Minister of Finance during the swearing-in of the new cabinet at Rideau Hall in Ottawa on Wednesday, Nov. 20, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Liberals’ fiscal update shows billions more in deficits this year and next

Last time, they projected a $19.8-billion deficit. This time, it’s $26.6 billion

Canada’s federal budget deficit will be billions of dollars deeper than it was supposed to be this year and next, according to the Finance Department.

The figures released Monday morning show that the Liberals’ projected deficit of $19.8 billion for the 12-month period that ends in March is now slated to hit $26.6 billion.

And next year’s deficit is expected to be $28.1 billion, before accounting for promises the Liberals will unveil in their 2020 budget.

The Liberals’ election platform projected four years of deficits of more than $20 billion, including almost $27.4 billion in the upcoming fiscal year that begins in April 2020.

The Finance Department says the deeper deficit is largely driven by changes to how employee pensions and benefits are calculated, but also accounts for a tax break that takes effect on Jan. 1.

Still, the Liberals say their preferred measure of the state of federal finances — which calculates the deficit relative to the size of the economy — will keep improving, if not as quickly as it was supposed to.

Spending is also expected to go up faster on the Canada Child Benefit than the Liberals projected earlier this year, a reflection of pegging the value of payments to inflation and “an increase in the projected number of children eligible.”

The government also says that increased spending announced in the March 2019 budget will be “entirely offset” over the coming years by what the Liberals higher-than-anticipated personal and corporate income-tax revenue.

At the same time, revenues will decline for excise taxes and duties this year — largely from the Liberals’ lifting retaliatory tariffs on American steel and aluminum earlier than they planned — and over the coming years from “lower expected growth in taxable consumption.”

READ MORE: Re-elected Liberals would still run big deficits, despite new taxes

Federal officials are also promising the first phase of a spending and tax review that the Liberals say will result in $1.5 billion in savings starting next fiscal year, which the government has accounted for.

The update provided today from Finance Minister Bill Morneau comes on the heels of a week where the opposition Conservatives accused the government of creating the conditions for a “made-in-Canada recession.”

The government, however, projects that the economy itself will continue to grow over the coming years at roughly the rate calculated in the March budget.

The Finance Department projects growth will be 1.7 per cent this year and 1.6 per cent next year, after weakness late last year and early this year, particularly in the mining and oil-and-gas sectors. The projections would make Canada the second-fastest-growing economy among G7 countries, behind only the United States.

The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

The Libby Dam on the Kootenai River in Montana. The dam created the Koocanusa Reservoir, which straddles the B.C./Montana border. (photo courtesy Wikipedia)
Outflow at Libby Dam to be increased

Volume increase to aid migration and spawning conditions for endangered white sturgeon in the Kootenai River

Cranbrook City Hall. File photo.
Cranbrook municipal property tax levy set to increase by 2.35 per cent

Municipal property taxes are going up following adoption of the 2021 rates… Continue reading

A trailer was stolen from Cranbrook’s industrial area overnight, May 11.
Trailer stolen in Cranbrook

A 2003 Keystone “Hornet” travel trailer was allegedly stolen overnight Tuesday from… Continue reading

Pictured is Britany Bignham, a Cranbrook hairstylist who is one of 16 top stylists in the running for the Ultimate Stylist competition - an online international hair and beauty competition. She is pictured behind her chair at the Hair Mob. (Corey Bullock/Cranbrook Townsman file)
Cranbrook hairstylist vies for top prize in international competition

Britany Bingham is one of 16 finalists in the Ultimate Stylist competition

Kimberley RCMP detachment seeking information after female teenager grabbed by masked man.
Teenaged female grabbed by masked man on Kimberley trail

RCMP seeking witnesses or information

Marc Kielburger, screen left, and Craig Kielburger, screen right, appear as witnesses via video conference during a House of Commons finance committee in the Wellington Building in Ottawa on Tuesday, July 28, 2020. The committee is looking into Government Spending, WE Charity and the Canada Student Service Grant. THE CANADIAN PRESS/Sean Kilpatrick
BREAKING: Trudeau didn’t violate conflict rules over WE Charity, watchdog says

Federal ethics commissioner Mario Dion found that former finance minister Bill Morneau did violate the rules

Tinder, an online dating application that allows users to anonymously swipe to like or dislike other’s profiles. (Black Press Media files)
B.C. man granted paternity test to see if Tinder match-up led to a ‘beautiful baby’

The plaintiff is seeking contact with the married woman’s infant who he believes is his child

Nurse Tami Arnold prepares to administer a COVID-19 vaccine. (Kareem Elgazzar/AP)
B.C. adults 30+ now eligible to get vaccinated against COVID-19

Health officials made the announcement Wednesday afternoon

Richard Green writes poetry under the nom de plume Rick the Poet Warrior. Homeless, Green sometimes spends his summers in Revelstoke but winters in Victoria, travelling to Ontario to visit his sister whenever he can. (Jocelyn Doll - Revelstoke Review)
Revelstoke nomad pens poetry, offers insight into homelessness

Rick the Poet Warrior’s books can be found online as well as at the Revelstoke library

Ancient Forest Alliance campaigner Andrea Inness walks beside an enormous western red cedar stump in a BCTS-issued cutblock in the Nahmint Valley. (PHOTO COURTESY TJ WATT)
Watchdog: logging practices put Vancouver Island old growth, biodiversity at risk

Forest Practices Board has issues with BC Timber Sales practices in Nahmint Valley near Port Alberni

Erik Christian Oun, who worked for the Coquitlam school district, has had his teaching licence suspended for half a year. (Pixabay)
B.C. teacher suspended after calling students ‘cutie’ and ‘sweetheart’ in online messages

Erik Oun’s licence has been suspended for half a year, a decision made by the B.C. Commissioner for Teacher Regulation

An Israeli attack helicopter launches flares as he flies over the Israeli Gaza border, southern Israel, Thursday, May 13, 2021. (AP Photo/Ariel Schalit)
Singh calls for halt on Canadian arms sales to Israel as violence escalates in region

Government data shows Canada sent $13.7 million in military goods and technology to Israel in 2019

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Most Read