Overview
- The PBO forecasts real GDP growth of 1.2% in 2025 and 1.3% in 2026 and projects the federal debt-to-GDP ratio will climb above 43% over the medium term.
- The outlook reflects roughly $115.1 billion in net new measures since December and a tariff-driven drag that lowers nominal GDP by an average $12.9 billion annually from 2025 to 2029.
- Debt-service pressure is mounting, with interest charges exceeding $55 billion this year and the debt service ratio rising toward 13.7% by 2030-31, with some projections pointing to about $82.4 billion in annual interest by decade’s end.
- Prime Minister Mark Carney and Finance Minister François‑Philippe Champagne dispute the alarm, saying the budget will show a declining debt ratio and a plan to balance the operating budget within three years.
- Provincial figures released this week show Ontario’s 2024-25 deficit at $1.1 billion alongside a new hiring freeze for agencies, while Manitoba posted a larger‑than‑planned $1.1‑billion shortfall and now forecasts an $890‑million deficit tied partly to wildfire costs.