Thursday, January 22, 2009

Big Deficits Projected for Canada

The federal government will run a $34-billion deficit in the coming fiscal year, and a $30-billion deficit in the following year, a senior government official said.

The size of the deficit is largely attributable to the Conservative government's decision to include billions in stimulus spending beginning in this year's budget. That includes immediate spending on infrastructure and help for Canadians hit hardest by the economic downturn.

With a minority government, I believe Harper had no choice. That said, it still feels like a punch in the stomach. My pessimistic side believes this will be another 20-30 year run with deficits.

Canada's debt-to-GDP ratio was 23.4 per cent in 2007, and that is forecast to rise to 28 per cent in 2010. Even with that increase, Canada will still maintain the position it has held as having the lowest debt-to-GDP ratio in the G8, the official said.

It really felt like it was within our grasp to get out of debt altogether. Oh well, maybe the next generation can do something about it.


  1. I think Harper may be in danger of re-creating something like the Reform Party. He has pandered to Quebec, and done nothing to impress conservative minded voters. What happened to a bill on private property rights? Sure you have to put your hand out to the other side, but what about your own team? This $30 billion deficit program may end up sending his own Conservative voters elsewhere. And guess where all the spending is going to, Quebec.

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