The Trudeau government missed its deficit target, and not by a small margin: the shortfall in federal public finances reached $62 billion, or $22 billion more than expected.
• Also read: Dominic LeBlanc replaces Chrystia Freeland as Minister of Finance
• Also read: Departure of the Minister of Finance: Has Trudeau lost the confidence of his cabinet?
• Also read: Jagmeet Singh calls for Justin Trudeau’s resignation
Ottawa explains that it smashed its planned deficit of $40 billion for “exceptional” reasons.
Additional claims to be paid to Indigenous communities form the largest chunk, at $16.5 billion.
Ottawa is also now calculating that it will be unable to collect billions in fraud for pandemic aid like the CERB, causing a gaping hole of $4.7 billion.
That’s more than $20 billion added to a deficit that has no end in sight.
The Trudeau government nevertheless maintains that it has demonstrated “prudent and responsible management of public finances,” we read in the document of more than 300 pages.
The tabling of the fall economic update was obscured by the sudden departure of Finance Minister Chrystia Freeland, replaced at short notice by Dominic LeBlanc.
Ms. Freeland cited “disagreements” with the prime minister to justify her departure over spending.
The former finance minister believes that the federal government should keep ammunition in reserve to face the threat of tariffs from the Trump administration instead of spending.
“We must preserve our fiscal capacity today, so that we can have the reserves we might need during a tariff war. We must avoid costly political tricks that we cannot afford and that make Canadians doubt that we recognize how serious this moment is,” she said.
The Trudeau government announced with great fanfare a GST holiday which will cost the public treasury $1.6 billion, and a check for $250.
The future of the famous check, for lack of a dance partner in the House of Commons, is still uncertain.
The economic update also provides $1.3 billion to improve border security, a request from American President-elect Donald Trump.
Deficits as far as the eye can see
2023-2024 – 61,9 G$
2024-2025 – 48,3 G$
2025-2026 – 42,2 G$
2026-2027 – 31 G$
2027-2028 – 30,4 G$
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