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  • February 18, 2025
Freeland is silent on meeting the promise of a .1 billion federal deficit

Freeland is silent on meeting the promise of a $40.1 billion federal deficit

Finance Minister is preparing to release an autumn statement on December 16

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Minister of Finance Chrystia Vrijland is promising that her government has met its fiscal anchor of a falling debt ratio for the 2023-2024 financial year, but will not confirm whether this will achieve its target. deficit promiseas it prepares to submit it tax update on December 16.

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‘Next week economic statement“You will see the government maintain its fiscal anchor, particularly reducing federal debt as a share of the economy over the medium term,” Freeland said at a news conference in Ottawa on Tuesday. “I expect that the debt ratio forecast in the spring budget for the 2023-2024 financial year will be achieved.”

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In the spring budget, the federal government projected that federal debt would reach 42.1 percent of GDP in 2023-2024, before falling to 41.9 percent the following year.

In last year’s budget update, Freeland made three commitments for Canada’s finances. Budget anchors included keeping the fiscal year 2023-2024 deficit at or below $40.1 billion, reducing the debt-to-GDP ratio in 2024-25 and keeping deficits below one percent of 2026-2027 and beyond maintain GDP.

The finance minister was pressed on whether the federal government has kept its promise to keep the deficit below $40.1 billion for the 2023-2024 financial year, but did not provide details on where the deficit is. In October, Canada’s fiscal watchdog – the Parliamentary Budget Officer (PBO) – released a report that Canada had likely exceeded its deficit commitment by more than $6 billion.

“If your debt as a share of the economy is declining, your fiscal position is by definition sustainable and that is very important,” she said. “When it comes to the deficit, Canada has the lowest debt ratio and the lowest deficit in the G7, and that is also important.”

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Freeland would not say whether the economic statement would include new spending measures. This fall, however, the federal government announced a number of new initiatives, including one GST/HST holiday estimated by the PBO at $2.7 billion if provinces request compensation for the HST.

The federal government has also made commitments to increase resources at the Canada-U.S. border.

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“You can’t just pick and choose fiscal anchors and then renege on a promise you made just a year ago,” Robert Asselin, senior vice-president of policy at the Business Council of Canada, said in a statement. “The fact is that this government is losing control of the public finances, and Canadians are noticing it.”

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