Fiscal update vows to keep deficits in check, offers few new measures

OTTAWA — The Liberal government’s fall economic statement acknowledges the cost-of-living crisis weighing on Canadians, but offers few new measures to tackle it while pledging to keep deficits in check.

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Finance Minister Chrystia Freeland is presenting her fiscal update in the House of Commons on Tuesday, stressing the pressure inflation and a slowing economy are putting on federal finances.

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As the Liberals face pointed criticism for their spending by the Opposition Conservatives, the update also outlines new fiscal anchors to show restraint, including setting a new goal to keep deficits below 1% of Canada’s GDP beginning in 2026-27.

The federal government projects the deficit for the current fiscal year to come in at $40 billion, largely unchanged from its spring budget forecast, with deficits shrinking, but not disappearing, over five years.

The update adds $20.8 billion in new spending since the spring budget over five years with some new measures designed to boost the housing supply, including rental units and affordable housing.

But much of the new spending is tied to policies and programs the federal government announced before Tuesday’s fall economic statement, including billions of dollars for electric-vehicle battery plants.