By The Canadian Press

$31.8-billion to be added to federal deficits over next five years

Nov 1, 2016 | 1:28 PM

OTTAWA – Finance Minister Bill Morneau says deficits over the next five years will be a total of $31.8 billion bigger than projected in the last budget, mainly because of slow economic growth.

In his fall economic statement tabled today, Morneau also says he will create an infrastructure bank with $35 billion in seed capital, meant to leverage private-sector investment and spur growth.

The statement contained very little in new spending, as is normal for a fall update of the country’s books.

The updated figures show that the deficit this year will be $25 billion, slightly larger than the $23 billion projected in last spring’s budget, not including the reserve set aside for rainy days.

The deficit is expected to get fatter in 2017-18, expanding to almost $28-billion.

Week-in-review: Municipal election changes, a leadership debate and green bins

Apr 27, 2024

What's Happening in Lethbridge this weekend: April 26, 2024

Apr 26, 2024

Week-in-review: Federal Budget, water agreements and success for tourism industry

Apr 20, 2024

For now, the government has eliminated the $6-billion contingency fund that was set aside for every year in last year’s budget to deal with unexpected problems, a move that makes the government’s deficit figures seem slimmer.

Some highlights from Tuesday’s economic statement include the following:

The deficit for 2016-17 is expected to be $25.1 billion, but that does not include a rainy day fund. In last spring’s budget, the government projected a $29.4-billion deficit, but that number included a $6-billion reserve.

The deficit is gradually expected to shrink over the coming five years to $14.6-billion in 2021-2022, not including any provisions set aside for a rainy day. There is no projection to balance the budget.

Over five years, the government will add a total of $31.8-billion more to deficits than was expected in the last budget, mostly because of changes to expectations for the economy.

The debt burden the size of the federal debt as a percentage of gross domestic product will slowly slide to 30.4 per cent in 2021-22 from 31.8 per cent in 2016-17.

The government will set up a Canada Infrastructure Bank with seed capital of $35-billion. Of that, $15-billion will be taken from the $60-billion in existing funds set aside for infrastructure and another $20-billion will be financed and booked as equity or debt so as not to affect the government’s bottom line.

The government will adopt a global skills strategy that will speed up work permits and visas for foreign workers.

The government will create a new Invest in Canada Hub to attract foreign investment. It will also relax foreign investment restrictions somewhat revising national security rules and moving the threshold for reviewing foreign takeovers to $1-billion starting in 2017, two years ahead of schedule.

The parliamentary budget officer will become accountable only to Parliament, with all the privileges that entails, rather than the Library of Parliament.

The chief statistician will be granted more independence.