Finance Minister Chrystia Freeland will table her much-anticipated fall economic update next week — a document that will give Canadians a look at the federal books at a time of great economic uncertainty.
The statement, to be tabled in Parliament on Dec. 16, will reveal whether Freeland is keeping her promise to hold the federal deficit for 2023-24 to $40.1 billion or less. The parliamentary budget officer already has said she’s unlikely to hit that mark.
Freeland also vowed to lower the debt-to-GDP ratio and keep it on a downward trajectory for the years to come — a commitment that could be tested by new big-ticket items like more money for the military and funds to better protect the border to satisfy U.S. president-elect Donald Trump’s concerns about migrants and drugs.
Those budget line items come as Canada is expanding the social welfare state with new programs like dental care and pharmacare, and a national school food program to feed tens of thousands of kids.
Freeland also has to book the substantial one-time costs associated with the GST/HST holiday and $250 cheques for working people — a program that is stuck in limbo as the NDP demands that it be extended to more people.
Freeland’s update, which is expected to offer fiscal projections for the year ahead, also will have to account for the recession that would follow if Trump goes ahead with a 25 per cent tariff on all Canadian goods.
Those tariffs have the potential to cripple the economy. TD Bank warns that a levy of just 10 per cent could “deliver severe negative economic impacts,” with U.S.-dependent sectors like autos, oil, chemicals and forestry products most affected.
Freeland’s document will reveal the size of the national debt and how much it will cost to service that debt. The debt ballooned in the COVID years as Ottawa propped up an economy on the ropes.
In the spring budget, Freeland projected the debt would rise to $1.25 trillion this year and cost $54.1 billion a year to finance. If that figure holds, the federal government will spend more on servicing its debt than on health care this year.
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