Five things to look for in the Trudeau government’s second budget
OTTAWA — The Trudeau government is introducing the second budget of its mandate today. Here are five things to look for:
1. Will the government provide a timeline to bring the country’s books to balance?
The Liberals won the 2015 election on a platform that vowed to invest billions in measures like infrastructure and child benefits as a way to re-energize Canadian growth. They planned to run deficits to finance the investments, but promised annual shortfalls would not surpass $10 billion during the first couple years of their mandate. The Liberals also vowed to return to balance by 2019-20. Since taking office, however, the government abandoned those promises, citing a weaker-than-expected economy. Last fall, Finance Minister Bill Morneau’s fiscal statement projected a string of double-digit deficits until at least 2021-22, starting with a $25.1-billion shortfall in 2016-17. Many economists have been urging the government to map out a timetable to eliminate the deficit. Morneau has instead focused on another so-called fiscal anchor, promising to lower the country’s debt-to-GDP ratio — a measure of the public debt burden — by the end of the Liberal mandate.
2. If Canada’s staying in deficit mode, how big will the shortfalls be?