Deputy Prime Minister Chrystia Freeland mentioned Friday she’s going to current the federal government’s fall economic statement on Nov. 3 — the primary likelihood for (*3*) to get a nearer have a look at Ottawa’s books for the reason that spring finances.
The statement comes throughout a time of rising rates of interest and appreciable economic uncertainty.
Finance Canada mentioned the statement — which incorporates a have a look at the anticipated deficit and nationwide debt for the approaching 12 months as effectively as particulars about new deliberate federal packages — will “present data on the state of the Canadian financial system inside a difficult world atmosphere and description the federal government’s plan to proceed constructing an financial system that works for everybody.”
Freeland has toured the nation warning (*3*) that the approaching months may get ugly as the Bank of Canada’s fee hikes work their means by means of the financial system, pushing up the price of borrowing for people and companies.
But there are early indicators that Ottawa’s fiscal well being could possibly be a lot better than beforehand thought, thanks to larger oil costs and a development in private and company taxes on this period of excessive inflation.
According to figures launched Thursday by means of the Public Accounts of Canada, the federal government’s fiscal ledger, the finances deficit for the 2021-22 fiscal 12 months got here in at $90.2 billion — considerably lower than the $113.8-billion deficit Freeland projected in her April finances.
Risk of ‘extra extreme world slowdown’
In an economic and financial outlook printed earlier this month, the Parliamentary Budget Officer (PBO) forecast a finances deficit of $25.8 billion — or 0.9 per cent of GDP — for the 2022-23 fiscal 12 months if the federal government pursues “established order coverage,” which implies no main new spending on packages. That is considerably smaller than the April finances’s forecast of $52.8 billion.
But Yves Giroux, the PBO, mentioned the central financial institution’s fee hikes to tame inflation danger dumping Canada into a recession.
“With the synchronized tightening of financial coverage by main central banks world wide to scale back excessive inflation, there’s a danger of a extra extreme world slowdown, which might negatively have an effect on the Canadian financial system and federal funds,” Giroux mentioned.
“We anticipate development within the Canadian financial system to gradual significantly within the second half of 2022 as shopper spending downshifts and residential funding continues to decline. We venture actual GDP development to stay weak by means of 2023 earlier than rebounding considerably in 2024,” he mentioned.