Finance minister stands by deficit outlook as watchdog forecasts larger shortfalls

Canada’s finance minister is defending the federal government’s deficit projections after the Parliamentary Budget Officer said Ottawa is likely to run larger deficits than expected over the next five years. In a new fiscal update released Thursday, Budget Officer Annette Ryan said annual deficits could average $4.6 billion more than the government forecast in its spring economic update. She estimated this year’s deficit at $71.8 billion, about $6.5 billion above Ottawa’s projection, citing weaker tax revenue and higher program spending. The report also said the government is unlikely to meet one of its fiscal anchors: keeping the deficittoGDP ratio on a steady downward path each year. Finance Minister FrançoisPhilippe Champagne said he stands by the government’s numbers and argued that the deficit is declining, while Conservative MPs criticized the outlook as evidence the government’s fiscal plan is not sustainable.