Economists believe federal deficit will surpass 2% of GDP
The federal budget deficit will be more than 2 per cent of Canada’s gross domestic product this year, far higher than what was promised, according to a panel of Bloomberg economists.
The federal budget deficit will be more than 2 per cent of Canada’s gross domestic product this year, far higher than what was promised, according to a panel of Bloomberg economists.
While the Liberals pledged in December to keep the deficit around $42 billion, it is now expected to reach $70 billion.
Prime Minister Mark Carney said his government intends to operate a“substantial” deficit in response to the ongoing trade war with the United States.
“There’s going to be implications for the deficit, but it’ll build a much stronger Canada moving forward,” Carney told reporters on Sunday.
According to Bloomberg, 11 of 12 economists are forecasting the federal net debt as a percentage of GDP to increase over the next two years.“This is going to be a generational investment in our future,” said Finance Minister Francois-Philippe Champagne on Tuesday. “We’re going to build the strongest economy in the G7.”
Carney has said that he intends to split the budget into two avenues – operating expenses and capital investments.
“It’s very important that we’re absolutely transparent and clear what’s on the investment ledger and what isn’t,” Carney told reporters.
However, economists are divided on whether or not that will be the case.
Of the 12 analysts who participated in Bloomberg’s survey, four believe the plan will have negative impacts, while five said there’d be no impact, and three believe it to be positive.
There is some speculation that the Carney government will attempt to minimize the deficit by labelling certain operating spending as “investments.”
Conservative MP Michael Cooper previously accused Carney of “cooking the books” with his budget split.
Both the prime minister and Government House leader Steve MacKinnon have tasked ministers and departments with finding savings and ensuring government programs deliver results.
“Canadians expect their tax dollars to have maximum impact,” he said, adding that the Liberals’ goal is to “spend less and invest more” rather than impose deep cuts.
Carney confirmed during the Sunday press conference that the deficit in the upcoming budget would “be bigger than it was last year.”
Carney and his gang of trained seals are and will continue to be a complete disaster for what used to be a wonderful and respected country.
Now an ex-country about to go bankrupt as they bankrupt generations to come.
Thank a Liberal and those who voted for these jerks.
Deficit will exceed $100 billion.