Liberal’s Update Says Ottawa Expecting $3-Billion Deficit

This article was last updated on April 16, 2022

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The failing economy has diminished all hopes and projections of a balanced budget in this fiscal year as the federal books show $3-billion deficit for 2015-16 even before the new Liberal government began to lay out its ambitious spending plans. During the first speech of the newly appointed Finance Minister on Friday, Bill Morneau alleged that reduced income-tax revenue and increased expenditures on employment-insurance claims, along with other issues, have lowered the balance that was forecasted in the spring budget by about $6-billion.

Newly elected Liberal Prime Minister, Justin Trudeau, had mentioned during the campaign that he foresees a “modest” deficit of up to $10-billion in each of the next three years: $9.8-billion and $9.5-billion in its first two years and $5.7-billion in 2018-19. Therefore, Mr. Morneau avoided questions inquiring whether the government thinks that the deficits would now exceed $10-billion. He mentioned that “we are in the early days. We’ve given a starting point for Canadians. We intend on keeping our commitments to Canadians, the promises we’ve made,” adding that “we believe that, together with our promises for investments, we will be able to come up with a budget that will show Canadians that we will achieve our goals.”

Upon inquiry about any plans to delay some spending plans to stimulate the economy, Mr. Morneau replied that “we built our platform with the understanding that we were facing a low-growth economy,” and “so our decisions to make significant investments in infrastructure were designed to both improve Canadians’ lives and also to provide some fiscal stimulus.”