PBO’s assessment is that the Government’s outlook for the economy and federal budget over the medium term is optimistic. Based on forecast comparisons and forecast revisions, PBO believes that there is downside risk to the Government’s medium-term outlook for the budgetary balance in the fiscal years 2019-20 and 2020-21.
The cost of a combat mission continues beyond the point at which the Canadian Armed Forces have withdrawn from the operational theatre. Arguably the most important post-combat cost is that of caring for Canada’s ill and injured Veterans. The intent of this analysis is to ensure that these post-combat costs come as no surprise to parliamentarians. This report does not incorporate any changes proposed by the new government.
The Canadian labour market has generally improved over the past year but there is still underutilization of labour in some regions, sectors and among some groups of workers.
PBO projects a sluggish recovery for the Canadian economy as it adjusts to lower commodity prices and rebalances—shifting away from consumer spending and housing toward exports and business investment. Based on Budget 2015 measures only, PBO projects annual deficits averaging $4.3 billion (0.2 per cent of GDP) over 2016-17 to 2020-21. Federal debt is projected to fall from 31 per cent of GDP in 2014-15 to 26.2 per cent by 2020-21.
|Budgetary balance ($ billions)||1.2||-3.0||-4.7||-5.0||-4.6||-4.2|
|Federal debt ratio (% of GDP)||30.8||29.9||28.8||27.9||27.1||26.2|