Liberals' deficit trajectory unsustainable, warns Parliamentary Budget Officer

Interim Parliamentary Budget Officer Jason Jacques warns that the federal Liberal governments' current fiscal path is unsustainable,

Budget watchdog sounds alarm about Ottawa's 'unsustainable' fiscal path | Yahoo News | Craig Lord, Canadian Press:

Interim PBO Jason Jacques (from X).

September 25, 2025 -'Stupefying,' 'shocking' and 'unsustainable' — those were just some of the words Ottawa’s fiscal watchdog used Thursday to describe his scathing forecast for federal finances ahead of a long-anticipated fall budget. 

"Interim Parliamentary Budget Officer Jason Jacques published an updated economic and fiscal outlook on Thursday where he projected the federal deficit would balloon to $68.5 billion this year, up from an estimated $51.7 billion last year. 

"He also expects the federal debt-to-GDP ratio — previously a major fiscal anchor for Ottawa — will no longer decline in the coming years. Jacques told a parliamentary committee Thursday afternoon it is the first time in 30 years he has seen a projection where that key metric rises over time. Based on public statements from federal officials, spending plans announced over recent months and a weakening economy in the U.S. trade war, he said the path for federal finances appears broadly 'unsustainable.'

"'I think everybody should be concerned,' Jacques told MPs on the government operations and estimates committee. ]We’re hoping, and certainly expecting, the government as part of Budget 2025 to clearly indicate what the government plans to do to address … this problem, because it’s certainly not sustainable.'

"The PBO is a non-partisan officer of parliament. The office's updated fiscal and economic outlook offers parliamentarians a baseline estimate of the state of federal finances heading into the Liberals' fall budget on Nov. 4....

"The previous Liberal government under former prime minister Justin Trudeau set an anchor of capping the annual deficit at one per cent of GDP and maintaining a declining debt-to-GDP ratio. The PBO report forecasts that Ottawa will blow past those anchors in the upcoming budget.... The PBO expects deficits to decline slightly but to remain close to $60 billion annually over the forecast horizon. The Liberals projected a deficit of $42.2 billion for this fiscal year in its most recent update last December.

"The watchdog’s update does not include plans to incrementally ramp up defence spending to meet the updated NATO benchmark of five per cent of GDP by 2035.... Kristina Grinshpoon, the PBO’s director of fiscal analysis, told the committee that she believes there’s about $20 billion of proposed spending included in the Liberals’ spring election platform that’s not included in the office’s updated outlook....

"Jacques was named parliamentary budget officer on a six-month interim basis earlier this month, before the House of Commons began its fall sitting. A permanent appointment must be approved by the House, and the Conservative party has pushed to keep Jacques in the role."

Read more: https://ca.finance.yahoo.com/news/parliamentary-budget-officer-set-release-164430685.html