New Finance Minister Bill Morneau delivered a fiscal update this morning, announcing that the federal government is billions of dollars deeper in the hole than expected.
However despite this news, Morneau maintained that the Liberals would still be able to balance the books before the next election.
According to Morneau, slower economic growth, rising expenses and lower revenues due to low commodity prices means that the 2.4-billion dollar surplus for 2015-16 that the Conservatives projected back in April is now expected to be a three-billion dollar deficit.
Bu the Finance Department’s latest figures do not account for the big-ticket spending promises in the Liberal platform, nor do they factor in the potential benefits the government expects from its plan to roll out stimulus such as infrastructure spending.
The Liberals have vowed to run annual deficits of just under 10-billion dollars over the next two years with a shortfall of about 5.7-billion in the third year, with Morneau’s current projections forecasting a surplus of 6.6-billion dollars by fiscal 2020-21.