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Canada cuts 2021/22 budget deficit forecast, cites strong economy -Breaking

by Mike Robinson

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OTTAWA (Reuters, Dec 14, 2014) – Canada’s Liberal government reduced its budget deficit forecast for fiscal year 2021/22. It cited higher taxes and lower emergency aid spending while allocating new money to combat the Omicron variant.

According to a fiscal update by the Finance Ministry, the deficit is expected to be C$144.5 Billion ($112.4 Billions), which is 6.6% lower than the C$154.7B forecasted in April.

“Canada has mostly recovered from the economic harm inflicted on COVID-19, and is poised to experience robust growth over the coming months,” Chrystia Freeland, Finance Minister, said in prepared remarks. She added that the fight against COVID-19 remains “our most significant national project.”

Ottawa has however reduced its 2021 real GDP forecast to 4.6%, down from 5.8% in April’s budget. This was due to disruptions in the global supply chain.

Fiscal update documents forecast that Canada’s debt to GDP ratio will be 48.0% for 2021/22, as opposed to 51.2% predicted in April. This would fall down to 44.0% for 2026/27.

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