Canada’s current fiscal trajectory will lead the federal deficit to grow to $117 billion by 2035, according to a new report.
While the federal government’s latest budget projects a deficit of just $57 billion by 2029, the report by public policy think tank MEI said that increasing elderly benefits, transfers to provinces, and military spending would put the figure much higher.
“Together, these pressures will cause overall federal spending to grow faster than revenues in the years ahead unless policy adjustments are made,” the report said.
Economists Trevor Tombe and Gabriel Giguère wrote that the Canadian government’s commitment to spend the equivalent of 3.5 percent of GDP on core defence expenditures by 2035 would mean an increase of $100 billion by that year….