Deficit of $26.6 billion in 2019–20 will improve to $11.6 billion by 2024–25: Finance Minister

FINANCE Minister Bill Morneau on Monday released the 2019 Economic and Fiscal Update and said that the budgetary deficit projected to be $26.6 billion in 2019–20 will improve to $11.6 billion by 2024–25.

He noted:

  • Canada’s economy is sound and growing at a solid pace. Economic growth in Canada is on track to average 1.7 per cent in 2019 and 1.6 per cent in 2020—with Canada expected to be the second-fastest-growing economy among the Group of Seven (G7) countries.
  • Canadians are creating good, well-paying jobs. In the last four years, the hard work of Canadians has helped to create more than one million new jobs—most of them full-time—pushing unemployment rates to historic lows in 2019.
  • Canadians’ wages are growing. For the average Canadian worker, wage growth is outpacing inflation. If current trends continue, 2019 could mark the strongest year of wage growth in close to a decade.
  • Business profits are solid. Businesses in Canada are now recording higher-than-average after-tax profits—boosting their competitiveness and setting the stage for further investments and the creation of better, well-paying jobs.
  • Canada’s net debt-to-GDP (gross domestic product) ratio remains the lowest in the G7, keeping the country in an enviable position among its peers. The relatively low level of debt is a major competitive advantage, which the government is fully committed to maintaining in an increasingly volatile and unpredictable world.

The 2019 Economic and Fiscal Update also signals the government’s intention to launch a consultation with accounting experts and stakeholders in the coming months on the idea of adopting a new, more transparent way of accounting for gains and losses in the government’s financial reporting.

Morneau said: “Canada’s economy is doing well, with strong job creation and rising wages that are helping more people get ahead. At the same time, we know that some people are still worried about making ends meet, and about what the future holds for themselves and their families. There is a lot more work to be done to build an economy that truly works for everyone, and as we make those choices around how to invest in the years ahead, we are committed to doing so in a way that continues to put the needs of people and communities first.”

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