This report extends PBO’s medium-term analysis to assess the fiscal sustainability of Canada’s federal government, subnational governments and public pension plans.
This report responds to the 4 February 2016 Standing Committee on Finance motion. It incorporates data available up to and including 12 April 2016.
This report reviews the evolution of household indebtedness in Canada and assesses prospects for household financial vulnerability over the medium term.
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 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|
This report provides an assessment of the long-term sustainability of government finances for three government sub-sectors: the federal government; subnational governments consisting of provinces, territories, local, and aboriginal governments; and, the Canada and Quebec Pension Plans. [PDF]