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1h ago

PBO Projects $68.5 Billion Deficit, Says Debt Ratio Is Rising

The watchdog cites trade-driven revenue weakness as the main drag on Ottawa’s fiscal outlook.

People make their way towards West block on Parliament Hill in Ottawa, Monday, Sept. 15, 2025. THE CANADIAN PRESS/Adrian Wyld
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People are silhouetted as buildings cast their shadows in front of the Peace tower on Parliament Hill, in Ottawa, Wednesday, Nov. 27, 2024. THE CANADIAN PRESS/Adrian Wyld

Overview

  • The fiscal baseline ahead of the Nov. 4 budget puts this year’s deficit at $68.5 billion, up from $51.7 billion last year.
  • The PBO says the debt-to-GDP ratio is no longer declining and is set to climb toward about 43 percent, with annual shortfalls hovering near $60 billion.
  • Lower tax receipts tied to the Canada–U.S. trade dispute and softer growth now expected push deficits higher, with real GDP projected at 1.2 percent in 2025 and 1.3 percent in 2026.
  • Nominal GDP is forecast to average $12.9 billion less from 2025 to 2029 due to tariffs, and the outlook incorporates roughly $115.1 billion in net new measures since December as annual deficits run $26.6 billion higher than March estimates.
  • The projections do not model planned defence increases or announced public-service cuts, and interim PBO Jason Jacques faces a committee hearing and requires House approval for a permanent term with Conservative support.