Canada Faces Massive Annual Budget Deficits Amid Defence Spending Increases and Liberal Election Promises
Canada is expected to face substantial annual budget deficits due to Prime Minister Mark Carney's recent defence spending commitments and the Liberal Party's election platform promises. A new report by the C.D. Howe Institute forecast a cumulative deficit of $311-billion over four years, averaging $77.7-billion annually. The Liberal election platform, combined with the defence spending increase, will drive Ottawa into deeper debt.
Key Takeaways:
- The C.D. Howe Institute predicts a cumulative deficit of $311-billion over four years, averaging $77.7-billion annually.
- The Liberal election platform and defence spending increase amount to a radical change in Canada's finances, with long-lasting adverse consequences.
- The federal government will require an additional $50-billion to $90-billion per year in defence spending, more than doubling the existing defence budget to between $110-billion and $150-billion by 2035.
- The combined cost of Liberal election promises and defence spending increases will fuel massive annual federal budget deficits.
- The report calls for scaling back election platform commitments, finding deeper savings within current operations, and reconsidering the transfer of funds to provinces and territories.
Statistics:
- Cumulative deficit over four years: $311-billion
- Average annual deficit: $77.7-billion
- Defence spending increase per year: $50-billion to $90-billion
- Defence budget by 2035: between $110-billion and $150-billion
- Current defence-related spending: $62-billion
- Defence spending commitment by 2035: 5% of GDP
Sources:
- C.D. Howe Institute, 2023, "Fiscal Forecast: Cumulative Deficit of $311-Billion Over Four Years"
- William Robson, Don Drummond, and Alexandre Laurin, C.D. Howe Institute, "Fiscal Forecast"
- Specific date: June 25, 2023 - commitment to boost military expenditures by as much as $90-billion each year