Canada budget blow-out: 62bn CAD deficit vs. 40bn expected previously

Canada fiscal update

• Canada fiscal update sees 2023/24 deficit of C$61.9 billion vs C$40 billion expected in April, breaching fiscal anchor of maintaining 2023/24 deficit at or below $40.1 billion.
• Canada update: Projected 2023/24 deficit includes Indigenous contingent liabilities of C$16.4 billion and adjustments for COVID-19-related support.
• Canada update sees 2024/25 deficit of C$48.3 billion, 1.6% of GDP, vs C$39.8 billion in April.
• Canada update sees 2024/25 federal debt-to-GDP ratio of 41.9% vs 41.9% in April, 2025/26 ratio of 41.7% vs 41.5%.
• Canada update sees federal debt-to-GDP ratio steadily declining to 38.6% in 2029/30.
• Canada update sees real GDP growth of 1.3% in 2024 vs 0.7% in April, 1.7% in 2025 vs 1.9%, 2.1% in 2026 vs 2.2%, 2.1% in 2027 vs 2.1%, 2.0% in 2028 vs 2.0%.
• Canada update sees 2025/26 deficit of C$42.2 billion vs C$38.9 billion in April; sees 2026/27 deficit of C$31.0 billion vs C$30.8 billion, narrowing to C$23.0 billion in 2029/30.
• Canada update: Public debt charges in 2024/25 set to be C$53.7 billion vs C$54.1 billion in April; in 2025/26 will be C$54.2 billion vs C$54.9 billion.

The finance minister resigned earlier:

• Canada finance minister Chrystia Freeland resigns from cabinet. Mark Carney next?

There is much speculation about how long PM Trudeau can last.

This article was written by Eamonn Sheridan at www.forexlive.com.