OTTAWA — The federal government could be running budget deficits until 2070 if current spending plans are not altered, according to estimates by the Parliamentary Budget Officer that have spurred warning calls over Canada’s fiscal position.
The Liberal government under Prime Minister Justin Trudeau has heaped on numerous new permanent spending programs in recent years, including a planned national childcare program, expanded Employment Insurance, increased elderly benefits, and bigger transfers to provinces for infrastructure, among other things. That, along with drastically weakened fiscal positions in the provinces and territories due to the COVID-19 pandemic, has substantially extended the timeline for when Ottawa might return to balance, according to the PBO’s Fiscal Sustainability Report (FSR). Reaching surplus could now take until 2070, up from 2023 just months before the pandemic struck.
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