Finance Minister Chrystia Freeland has made promises that Canada will meet its debt-to-GDP target of 42.1% for the 2023-2024 fiscal year, as outlined in the April federal budget. However, she has not committed to maintaining the projected budget deficit of C$40.1 billion. Economists anticipate that the actual deficit may exceed this figure. An updated fall economic statement with revised deficit figures is scheduled to be presented on December 16.
The fall economic statement, typically presented earlier in the year, was delayed due to parliamentary gridlock. This update aims to outline spending plans and fiscal policies while updating deficit estimates. Freeland emphasized the importance of fairness for future generations and plans to support the middle class. The economic statement comes amid rising uncertainty about Prime Minister Justin Trudeau’s minority government, following the New Democratic Party’s withdrawal of support and impending tariffs from U.S. President-elect Donald Trump.
In previous fiscal updates, the Liberal government has faced criticism for years of deficit spending. The upcoming economic statement is expected to outline new guardrails to demonstrate fiscal restraint, including setting a goal to keep deficits below 1% of GDP beginning in 2026-27.
As the fall economic statement approaches, Canadians await detailed plans on how the government intends to manage fiscal challenges while addressing economic uncertainties and supporting the middle class.
