Finance Minister Chrystia Freeland has not committed to meeting the $40.1 billion budget deficit target she set for the government last year.
Freeland said on Tuesday that he expects the fall economic report to be released on Dec. 16 to show a decline in the debt-to-GDP ratio.
“Next week’s fall economic announcement will show that the government maintains its fiscal anchors, specifically reducing the share of federal debt in the economy over the medium term,” Freeland said at a press conference. That’s true.”
Freeland declined to say when asked if the budget deficit target would also be met.
“I chose my words carefully because it’s important to be clear to Canadians. It’s important to be clear to the capital markets,” he said.
CBC’s Janice McGregor explains what to expect in next week’s fall economic report, the latest from Finance Minister Chrystia Freeland, who declined to comment Tuesday on the size of the projected deficit. Verify.
Last fall, the finance minister announced a series of fiscal guardrails in response to pressure from the Bank of Canada and economists to avoid fueling inflation with excessive spending.
Freeland now appears to be trying to eliminate at least one guardrail, which was to keep last fiscal year’s deficit under $40.1 billion. The apparent shift away from deficit control comes as the Liberal Party looks for ways to win back support from Canadians at an affordable price.
Congressional budget officials projected a deficit of $46.8 billion for the 2023-24 fiscal year.
Robert Asselin, executive vice president of the Business Council of Canada, accused the government of “losing fiscal control” in a statement.
“We can’t pick a fiscal anchor midway through and renege on commitments we made just a year ago,” said Asselin, who served as budget director for former Finance Minister Bill Morneau.
Freeland defended the Liberals’ handling of the federal finances, arguing that a lower debt-to-GDP ratio “by definition” means the government’s fiscal position is sustainable.
The finance minister gave few details about the content of the autumn economic report, saying it would focus on housing, affordability and economic growth.
Asked on Tuesday whether the budget deficit would remain below $40.1 billion, the deputy prime minister and finance minister did not provide a specific number, but instead said the fundamentals of the federal government’s finances are a decline in the debt-to-GDP ratio. emphasized.
Prime Minister Justin Trudeau announced last month that the federal government would temporarily remove GST from the list of items to reduce expenses for families during the holidays.
The Liberals also proposed a $250 payment this spring to Canadians who work in 2023 and earn less than $150,000. No opposition party has announced support for the bill, so it is unclear whether the Liberals will be able to implement its proposal.
Housing Minister Sean Fraser announced on Tuesday in his autumn economic statement that he would propose doubling the loan limit from $40,000 to $80,000 for homeowners who want to add a second suite to their home.
The program, which begins January 15, offers 15-year financing terms at 2% interest.
