Finance minister won’t confirm if the government will meet its $40.1-billion target
Finance Minister Chrystia Freeland appears to be stepping back from a key deficit target set last year, as the federal government navigates mounting pressures around affordability and economic growth.
With her fall economic statement set for release on December 16, Freeland has emphasized maintaining a declining debt-to-GDP ratio but stopped short of reaffirming the $40.1-billion deficit cap.
“In next week’s fall economic statement, you will see that the government is maintaining its fiscal anchor. Specifically, reducing the federal debt as a share of the economy over the medium term,” Freeland said on Tuesday as reported by The Canadian Press.
When asked directly whether the government would meet the previous deficit target, Freeland declined to commit, saying, “I chose my words with care because it is important to be clear with Canadians. It is important to be clear with capital markets.”
The deficit target was part of a fiscal framework introduced last year in response to concerns from the Bank of Canada and economists about inflation risks linked to government spending. However, recent projections from the parliamentary budget officer estimate the deficit for the 2023-24 fiscal year will reach $46.8 billion, exceeding the original goal.
Robert Asselin, senior vice-president at the Business Council of Canada, criticized the apparent shift. “You can’t pick and choose fiscal anchors as you go, and renege on a commitment you made only a year ago,” Asselin said in a statement, adding that the government was “losing control of public finances.”
Freeland also defended the government’s fiscal strategy, arguing that focusing on the debt-to-GDP ratio ensures sustainability.
The upcoming economic statement is expected to focus on housing, affordability, and economic growth, though details remain limited. Prime Minister Justin Trudeau recently announced plans to temporarily remove the GST from certain items to ease costs for families during the holiday season.
In addition, Housing Minister Sean Fraser unveiled a proposal to double the loan limit for homeowners adding secondary suites, raising it to $80,000. The program, launching January 15, will offer 15-year loans at a two per cent interest rate.
Meanwhile, a proposed $250 one-time payment for Canadians earning under $150,000 in 2023 remains uncertain, as no opposition party has endorsed the measure.
