Parliamentary Budget Officer: Canada’s government spending is now on an unsustainable path

By anna smith

An independent watchdog has stated that Canada’s government spending is on an unsustainable path.

On Tuesday, the Parliamentary Budget Officer (PBO) said that Prime Minister Justin Trudeau has depleted some of the federal government’s room for new spending and tax cuts that could be succeeded while keeping the current debt-to-GDP ratio.

Canada’s provinces and other sub-national governments are struggling. A drop in commodities and increasing health-care spending has degraded their already unsustainable outlook.

Last year, total government sustainability was net even. This year it is a negative 0.6 percent of gross domestic product (roughly $11 billion in unsustainable spending every year).

The PBO's fiscal sustainability report discovered that the federal government still has space for new spending or tax cuts adding up to 0.9 percent of GDP, after Trudeau delivered a budget that includes $118.6 billion in cumulative deficits over six years. This total is down from 1.4 percent of GDP in 2015 and amounts to room for $19.2 billion in new spending or tax cuts.


 

Follow @BizReviewCANADA

Read the June 2016 issue of Business Review USA & Canada magazine

Share
Share

Featured Articles

Top 20 essential leadership resources for Black executives

To celebrate Black History Month, here are 20 resources for Black leaders – from business books to leadership coaches to business school exec programs

Broadridge study reveals huge impact of AI on C-suite

Broadridge Financial Solutions spoke to 500 C-suite executives from across the globe, many of whom said AI was significantly changing the way they work

PwC's Kathryn Kaminsky – the role of boards on social issues

As Vice Chair Trust Solutions Co-Leader at PwC, Kathryn Kaminsky says boards play an important role in helping businesses take action on social issues

Why your business needs a Chief Transformation Officer

Leadership & Strategy

12 top AI and ML trends for the enterprise in 2023 – Dataiku

Technology & AI

From NYC to Hong Kong, the rise of the private members' club

Leadership & Strategy