Parliamentary Budget Officer Yves Giroux says federal deficits over the coming years will be smaller than projected in the April budget, a finding that gives political parties some flexibility as they cost out their campaign promises.
The report released on Monday is aimed at providing political parties with the PBO’s most up-to-date deficit projections so they can work with a common baseline as they reveal how they would manage federal finances should they form government after the Sept. 20 election.
Liberal Finance Minister Chrystia Freeland’s April budget had said this year’s deficit would be $154.7-billion and that number would gradually decline to $30.7-billion by 2025-26.
The PBO’s new baseline says this year’s deficit will be $138.2-billion and will decline to $24.6-billion by the 2025-26 fiscal year. Cumulatively over the five-year period, the PBO projects deficits that are $66-billion less than the five-year total outlined in the budget.
The publication of a baseline is one of two main responsibilities related to election campaigns that were added to the PBO’s mandate by Parliament before the federal vote in 2019. The second is a role for the non-partisan office to provide independent costing of specific campaign promises.
The PBO has warned that its ability to cost campaign pledges is hampered in a snap election. Under the legislation governing the PBO, parties can submit costing requests 120 days before the voting day in elections that are in line with the scheduled four-year cycle of fixed dates, which was the case in 2019. But in a snap election, the PBO is only legally allowed to receive costing requests on day one of a campaign.
The PBO has said that it likely will not be able to cost all promises submitted to the office from political parties.
Conservative Leader Erin O’Toole released his party’s election platform on Monday, but the document did not include detailed cost estimates for the proposed measures or projections for Ottawa’s bottom line. It did include a pledge to eliminate the deficit “within the next decade in a responsible way” by limiting spending to a few key areas and increasing economic growth.
Mr. O’Toole told reporters the pledges have been submitted to the PBO for review and that the party will release an updated platform later in the campaign with costing figures after receiving the PBO’s input.
Similarly, the NDP has also released a platform document that did not include a detailed costing table. The party said it plans to update it, and has submitted material to the PBO.
The PBO costed some of the NDP’s core proposals related to higher taxes on what the party calls the “ultrarich” during the previous Parliament in response to requests from New Democrat MPs.
Liberal Leader Justin Trudeau said on Monday that his party will release details on its proposals for taxation and other measures during the campaign.
“These are the kinds of things that Canadians will have clear choices on in the course of this election,” he said.
The federal budget projected that the size of the debt would rise to $1.4-trillion in 2025-26 from $721.4-billion in 2019-20, owing to the economic fallout of the COVID-19 pandemic and related federal spending.
Monday’s PBO report projects the federal debt will be $1.3-trillion in 2025-26, based on its latest forecasts for annual deficits.
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