Freeland updates today whether her deficit target is ‘toast,’ even after mothballing tax rebate
Finance Minister Chrystia Freeland has committed to a deficit no larger than $40.1 billion
OTTAWA — Finance Minister Chrystia Freeland is preparing to unveil the Liberal government’s latest fiscal update today, with all eyes on whether the government will stick to its commitment of having a deficit no larger than $40.1 billion. Already, the finance minister is backing off her government’s promise to send “tax rebate” cheques to workers in the spring as a way to limit the red ink.
Freeland had promised the $40.1-billion limit when she presented last year’s fall economic statement, billing it as one of the “fiscal anchors” the Liberal government would adhere to as it managed the books. She reiterated that promise when she presented her budget in April.
While she said last week that the government is on track to meet its objective of reducing the federal debt-to-GDP ratio, the minister has remained tight-lipped about whether it will keep its promise of keeping the deficit at or below that $40.1 billion promise. The parliamentary budget officer estimated in October the deficit would be around $46 billion.
Just last week, BMO chief economist Douglas Porter predicted that “Ottawa’s deficit targets are toast.” He forecast that the deficit for the current year could be $10 billion larger than projected, adding that was before the government announced billions more in affordability giveaways.
With Canadians scheduled to go to the polls no later than October 2025, the plan presented on Monday will be one of the last from the Liberals before the election.
