Several prominent business leaders are criticizing the federal government in Ottawa for running up Canada’s deficit and failing to provide a path to balanced budgets.
The federal budget released on March 28 allocated billions of dollars in new spending measures to grow the economy.
However, the spending is adding to Canada’s federal debt load. Canada’s deficit for the fiscal year ending March 31 is now forecast to reach $43 billion, up 18% from a deficit of $36.4 billion forecast last autumn.
In an unusual move, the federal government did not forecast a return to a balanced budget in its latest economic blueprint. Ottawa said it now expects a deficit of $14 billion by fiscal year 2027-28, instead of a $4.5 billion surplus it had previously forecast.
John Manley, a former federal cabinet minister who spent nine years leading the Business Council of Canada, said running deficits could lead to future economic pain for Canadians.
Manley added that, at some point, Ottawa will need to make fiscal corrections.
“At certain points, you do run out of your taxpayers’ money,” he said in a media interview.
Other business leaders and opposition political parties have been quick to criticize the Liberal government of Prime Minister Justin Trudeau for its increased deficit spending, saying it amounts to financial mismanagement.
For their part, government officials say spending on areas such as healthcare and clean technology is needed to bolster an economy that is slowing down.
