(OTTAWA) The federal Liberals’ latest budget announced new spending primarily for the green economy and health care, but despite this relatively tight guidance, Ottawa is expected to continue running deficits over the next five years.
Many economists are expressing disappointment with the federal budget and its fiscal projections, noting that the government could be in trouble if the economy were to slow more than expected.
Finance Minister Chrystia Freeland had promised that Tuesday’s budget would be subject to budgetary restrictions in view of the slowing economy, which could weigh on government coffers.
But budget projections show the deficit has been revised upward since the fall, and no return to balanced budgets is in the cards, as the fall budget update unveiled in November provided one for the 2027-2028 budget.
Tuesday’s budget targeted a $14 billion deficit in 2027-28, and higher than previously projected deficits for every year between then.
Former Parliamentary Budget Officer Kevin Page says it’s no surprise the deficit was higher than forecast in the fall, given that the economic outlook has since deteriorated.