Deputy Prime Minister and Minister of Finance Chrystia Freeland arrives at a news conference with Minister of Employment, Workforce Development and Disability Inclusion Carla Qualtrough in Ottawa on Nov. 24.BLAIR GABLE/Reuters
Finance Minister Chrystia Freeland has confirmed that the government will be releasing a fiscal update this fall.
Speaking with reporters Wednesday, Ms. Freeland said her April budget was based on a “prudent” forecast that included a declining debt-to-GDP ratio, which she suggested remains an important yardstick. She also noted that major rating agencies have maintained Canada’s triple-A credit rating.
“We know how important it is to be transparent with Canadians about the public finances and to update regularly. We will release some form of fiscal update this fall and we’ll have more specifics to share with you in the coming days,” she said.
Early signs of Liberal leadership ambitions as Chrystia Freeland biography in works
“The fiscal track we presented in the budget in April was prudent and careful. And that’s why the ratings agencies have reaffirmed our triple-A rating. [The budget] shows a steadily declining debt-to-GDP ratio, and that is important and that’s something our government is looking at closely.”
A fiscal update is traditionally a restating of federal revenue and spending estimates that takes into account the latest available data and provides new forecasts for Ottawa’s bottom line. Fiscal updates occasionally are expanded into so-called mini-budgets if they include new spending or tax announcements.
The April budget projected the deficit would be $154.7-billion for the current 2021-22 fiscal year, down from a projected $354.2-billion the previous year, during the first waves of the pandemic.
The Liberal Party platform released ahead of the September federal election projected a $156.9-billion deficit this year and a deficit of $62.6-billion the following year. The platform said the debt-to-GDP ratio would decrease slightly, from 51.2 per cent to 49.2 per cent, over five years.
Scotiabank economist Rebekah Young said in a recent note on what to expect in a fiscal update that the April budget likely remains a reliable guide in terms of the state of federal finances.
“The fiscal path should look largely familiar,” she wrote. “The debt profile should show slight improvements relative to the government’s last update.”
Ms. Young said stronger-than-projected revenue from economic growth has more than outpaced the new spending announced since April.
For subscribers: Get exclusive political news and analysis by signing up for the Politics Briefing.