Canada's C.D. Howe Institute expects federal deficits to average $78 Billion over the next four years, more than double what the parliamentary budget officer forecast before the spring election.
Federal deficit could average $78B over 4 years, think tank warns | CityNews Toronto | Craig Lord, The Canadian Press, and Cormac MacSweeney:
July 3, 2025 - "The C.D. Howe Institute predicts Ottawa’s recently announced spending plans — which include a much bigger defence budget — will drive its deficits markedly higher in the coming years. In a new analysis released today, the think tank says it expects Canada’s deficit to top $92 billion this fiscal year, given Prime Minister Mark Carney’s plan to meet NATO’s defence spending target of two per cent of GDP.
"C.D. Howe says it expects deficit growth to slow after that but predicts deficits will still average around $78 billion annually over four years, more than double the level forecast by the parliamentary budget officer before the spring federal election. The Liberal government did not publish a spring budget this year and has said it will instead push the planned fiscal update to the fall.
"In addition to ramping up defence spending, Prime Minister Carney’s Liberals recently pushed forward legislation to accelerate major project development and delivered a one-percentage-point cut to the lowest income tax rate.
"The C.D. Howe Institute accuses Ottawa of making costly commitments without showing the numbers to Canadians."
Read more: https://toronto.citynews.ca/2025/07/03/canada-federal-deficit-budget-spending-cuts/
BIG BUCKS LOST: Federal deficit numbers keep soaring with no end in relief | Toronto Sun | July 4, 2025:
July 4, 2025 - ""If this fiscal year’s deficit turns out to be as hefty as projected, it would be the second-largest deficit in Canadian history, topped only by the $327.7 billion shortfall from the pandemic year of 2020-21....
"Based on the most current and largely optimistic variables, the report says, federal deficits will remain above $71 billion during each of the following three years and in the fiscal year 2028-29 will be greater than three times what the government itself forecast in its most recent federal budget. But more likely, the report says, it will likely be a bit worse than that because the report’s authors say that they’re skeptical that all of the government’s plans to increase revenue through promised higher fines, penalties and savings will actually occur....
"But the most recent federal budget was now well over a year ago. The government took the highly unusual step this year of waiting until the fall to release its annual budget, more than half-way through the fiscal year.... The C.D. Howe report criticizes the government’s decision to wait until the fiscal year is more than half over before releasing its budget 'Delaying a budget until the fiscal year is more than half over is never good, but Canada’s current high-spending trajectory makes this delay especially bad.'
"Ottawa is making costly commitments, the report explains, without showing key numbers to the public such as how much more tax it expects to gather, the extent of its new spending and what the increased debt will mean for interest payments.... C.D. Howe suggests that the Liberal government eliminate or forgo some of its costly platform promises, make deeper cuts in its operating spending, substitute some revenue from less harmful taxation such as the GST, and cut federal transfers to provinces and territories."
