Finance Minister Chrystia Freeland announced Monday that she will deliver a fall economic statement on December 16.
The fiscal update will provide a fresh look at Ottawa’s finances heading into 2025.
It will give Canadians an idea of how items announced since the 2024 federal budget, including planned immigration limits, the upcoming GST holiday and Ottawa’s promises to meet NATO’s spending commitment in the coming years , will affect federal balances.
The autumn fiscal update will arrive later than usual, just a day before members of Parliament conclude their business for the year.
Freeland has blamed the delay on an ongoing Conservative filibuster that is hampering regular business in the House of Commons.
The December 16 update will also offer insight into whether or not the federal government has stuck to its fiscal anchors heading into an election year.
Canada’s fiscal watchdog has recently placed substantial scrutiny on some of Ottawa’s spending plans.
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The parliamentary budget official has projected that the federal Liberals likely failed to deliver on their promise to limit the deficit to $40 billion in the previous fiscal year.
On the Liberal promise to meet NATO spending commitments, the PBO said last month that those plans depended on “erroneous” economic forecasts. The PBO also projected in a report last summer that capital gains tax changes would generate $2 billion less in revenue over five years than the Liberals expected in the 2024 budget.
The upcoming fiscal update will also include revised economic forecasts for Canada’s economic growth amid cooling inflation and interest rate cuts by the Bank of Canada.
Randall Bartlett, senior director of Canadian economics at Desjardins, told Global News in October that while lower interest rates are typically a boon for governments that eventually see lower costs on their debt, alleviating inflation actually means lower revenues. for Ottawa in the short term.
He added that plans to curb immigration growth in the coming years will limit Ottawa’s tax base and could slow economic growth, further straining federal finances.
“This slowdown in the growth rate of real GDP will affect the federal government’s income more than it will save expenses. And ultimately, that will contribute to a larger deficit than the federal government planned for in the spring,” Bartlett said at the time.
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