OTTAWA – The country’s fading economic prospects could put the federal government on track to run $90 billion in deficits over the Liberals’ four-year mandate, a new report from National Bank estimates.
In the report, the Montreal-based bank predicts the public books will sink deeper into the red due to the combination of a weakened economy and Liberal promises of billions in fiscal stimulus.
MORE: One way to get ex-oil workers on the job again — old well cleanups
Report author Warren Lovely says if the bank’s downgraded growth profile comes to pass then Ottawa could lose $50 billion in revenue over the next four years.
The Liberals have pledged to run deficits in the coming years in order to spend $17.4 billion over its first mandate on infrastructure projects – which they predict will create jobs and generate economic growth.
Since coming to power, however, the Liberals have shied away from their election vow to keep annual deficits under $10 billion as the economy continues to falter amid falling commodity prices.
The Liberals have also promised to balance the budget in the fourth year of their mandate – a goal Lovely says will be difficult to accomplish without tax hikes or spending cuts.
MORE: Latest coverage — plunging oil
Comments