Close X
Thursday, January 23, 2025
ADVT 
National

Feds Headed For $150 Billion In Deficits Over Next 5 Years: TD Bank Forecast

Darpan News Desk The Canadian Press, 01 Mar, 2016 12:37 PM
    OTTAWA — An analysis by one of Canada's biggest banks says the federal government is on track to run $150 billion in budgetary deficits over the next five years.
     
    The TD Bank report also estimates Ottawa's current fiscal path means it will take more than a decade to bring the budget back into balance — unless the government raises taxes or cuts spending.
     
    The bank says it produced the numbers after re-calculating Ottawa's predicted shortfalls to account for the Liberal government's electoral spending vows and TD's below-consensus outlook for economic growth.
     
    The Liberals are projecting a shortfall of at least $18.4 billion next year — a deficit that's widely expected to climb closer to $30 billion in the March 22 budget.
     
    Ottawa's recent fiscal projection didn't factor in billions in Liberal spending commitments — a sizable chunk of which is likely to fund infrastructure projects that will help boost the struggling economy.
     
    The Liberals had vowed to cap upcoming deficits at $10 billion and to balance the books in four years — a pledge they have been backing away from while citing the sliding economy.
     
    In releasing a fiscal update last week, Finance Minister Bill Morneau insisted the government's starting point was "much further back" than the Liberals thought. 
     
    Morneau's calculations, primarily based on the estimates of private-sector forecasters, included an additional $6 billion per year for economic prudence that the government argued was necessary to account for risk.
     
    The government's update showed the fiscal outlook for the next two years, while the TD report broadened the projection period to five years.
     
     
    "Our estimates show deficits remain somewhat persistent, largely the result of our conservative view on long-term growth rates," reads the report, co-authored by TD economists Derek Burleton and Brian DePratto.
     
    "A key takeaway from our analysis is that absent additional revenues or adjustments to spending relative to the status quo, the federal deficit is poised to remain stubbornly elevated over the medium term."
     
    The authors say the study also factors in the positive growth benefits from stimulus spending.
     
    The report also warned that the current trajectory has also put another key Liberal election vow — to lower Canada's debt-to-GDP ratio from about 31 per cent to 27 per cent in four years — at risk. The ratio, also known as the debt burden, represents a government's capacity to repay debt.
     
    TD projects the debt-to-GDP ratio to grow to 36.1 per cent by 2020-21.
     
    "This underscores the need for a credible long-term anchor on spending and revenue that helps keep the budget on a sustainable track in a low-growth world."

    MORE National ARTICLES

    Cecilia Laurent, Quebec Woman Believed To Have Just Turned 120 Likes Cartoons

    Cecilia Laurent, Quebec Woman Believed To Have Just Turned 120 Likes Cartoons
    Her 28-year-old great-grandson, Ronald Chery, says only three of Laurent's 12 children are still alive, with the eldest in her 80s.

    Cecilia Laurent, Quebec Woman Believed To Have Just Turned 120 Likes Cartoons

    Quebec Taxi Industry Seeks Injunction Against Uber

    Quebec Taxi Industry Seeks Injunction Against Uber
    Uber's drivers are breaking the law and the company's services are illegal, lawyer Marc-Antoine Cloutier told a news conference outside the Montreal courthouse

    Quebec Taxi Industry Seeks Injunction Against Uber

    Oil Industry Group Says Trans Mountain Panel Subjected To 'Abuse' From Opponents

    Oil Industry Group Says Trans Mountain Panel Subjected To 'Abuse' From Opponents
    A vice-president at the Canadian Association of Petroleum Producers says some criticism of the Trans Mountain pipeline review process has been shameful and even abusive.

    Oil Industry Group Says Trans Mountain Panel Subjected To 'Abuse' From Opponents

    Canada Military Ill-prepared To Resume Mantle As World's Peacekeeper

    Canada Military Ill-prepared To Resume Mantle As World's Peacekeeper
    OTTAWA — The Trudeau government has promised to get Canada back into the peacekeeping business, but a new report from two independent think tanks says the military is ill-prepared for the task.

    Canada Military Ill-prepared To Resume Mantle As World's Peacekeeper

    Facts About British Columbia's Great Bear Rainforest

    Facts About British Columbia's Great Bear Rainforest
     First Nations, environmentalists, logging firms and the British Columbia government signed an agreement Monday to protect a large part of the province's central coast. 

    Facts About British Columbia's Great Bear Rainforest

    Leamington, Ont., Vegetable Producer Expanding And Plans To Add 203 Jobs

    LEAMINGTON, Ont. — A vegetable producer in Leamington, Ont., is expanding and creating 203 new jobs.

    Leamington, Ont., Vegetable Producer Expanding And Plans To Add 203 Jobs