The Parliamentary Budget Officer (PBO) estimates that the deficit for the next federal budget will increase “sharply” to $68.5 billion.
In its economic outlook published Sept. 25, the PBO projects the government’s budget, set to be introduced on Nov. 4, will show the deficit is up from $51.7 billion in the 2024-25 fiscal year to $68.5 billion in 2025-26. This means the deficit-to-GDP ratio would increase from 1.7 percent of GDP to 2.2 percent.
This decline in Canada’s finances reflects “weaker economic growth and additional measures impacting both revenues and expenses,” according to the PBO. It said that assuming no new measures are introduced and the existing temporary measures disappear as scheduled, the budget deficit will “decline slightly” but remain close to $60 billion through the medium term….