Canada Deficit to Hit $100 Billion, More Than Double Forecast

A leading bank economist expects Canada’s federal deficit to reach C$100 billion this fiscal year, more than double what the government forecast in December.

Stefane Marion, chief economist at the National Bank of Canada, said the deficit would represent about 3% of the country’s gross domestic product. The projection significantly exceeds the C$42 billion deficit the government forecast in December.

Marion made the comments at the Bloomberg Canadian Finance Conference in New York, calling the upcoming November budget “the most consequential budget in a generation.”

The increased spending comes as Prime Minister Mark Carney’s government pursues major infrastructure projects and initiatives aimed at attracting business investment to Canada. Marion emphasized that the deficit’s size is less concerning than how effectively the funds stimulate economic growth.

“What do you do with that deficit?” Marion said. “There’s got to be a big investment component that encourages investors about a future outlook.”

At 3% of GDP, the deficit would be roughly half the size of the United States deficit as a proportion of the economy, Marion noted.

Critics have targeted the government over rising debt levels, as federal debt interest costs will reach $53.7 billion in 2024-25 — exceeding all federal GST revenue.

The government will release the federal budget on November 4.



Information for this story was found via Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Silver’s Finally Breaking the System | Keith Neumeyer – First Majestic

The Best News for Gold Was the Drop! – Peter Grandich

McEwen Copper: The Los Azules Feasibility Study

Recommended

Silver47 Completes Property-Wide Geochemical, Rock Sampling Program At Adams Plateau, Identifies Numerous Targets

Altamira Gold Identifies Presence Of Second Mineralized Porphyry Body At Cajueiro

Related News

National Bank’s Q4 2024 Profit Jumps 27%, Yet Credit Losses Surge 41% 

National Bank of Canada (TSX: NA) reported its Q4 2024 financials, ending the quarter with...

Wednesday, December 4, 2024, 04:50:00 PM

America’s Budget Deficit Soars to Record $1.7 Trillion

Although the Covid-19 pandemic is beginning to show signs of tapering off across the US...

Wednesday, April 14, 2021, 10:23:00 AM

Federal Government’s Deficit Balloons to Record $120.4 Billion As Income Support Programs Surpass Budget

It appears that Canadians are in for a challenging road ahead, as the country’s budget...

Thursday, September 10, 2020, 04:32:12 PM

National Bank Q4 Earnings: A Breakdown

The fourth quarter has been a mixed bag for Canada’s big banks. While RBC hit...

Saturday, December 7, 2024, 05:21:00 PM

Canadian Federal Government to Release Economic Update this Summer; Deficit Likely Exceeds $260 Billion

The coronavirus pandemic has caused the Canadian federal government to impose stay-at-home orders, strict social...

Wednesday, June 10, 2020, 06:21:00 PM