Budget surpasses target by $7B, deficit 16% higher higher than Freeland forecast

The Budget Office Finance said Tuesday the federal government surpassed its budget by $7 billion, with the current deficit 16% higher than Finance Minister Chrystia Freeland forecast, Blacklock’s Reporter reported.Last March 28 Freeland promised her deficit would “decline in every year of the forecast.” It didn’t.“Setting aside new measures that are likely to be announced in the government’s 2024 budget we judge the risks to our baseline economic and fiscal projection are roughly balanced,” said the Budget Office report, Economic And Fiscal Outlook. “In terms of downside risks, we continue to judge the most important risk is a larger than expected impact of the Bank of Canada’s restrictive monetary policy which would negatively affect the Canadian economy and federal finances.”The bank held its overnight rate at 5% on Wednesday.Freeland had predicted the current budget deficit would fall to $40.1 billion — instead, it increased to $46.7 billion — the Budget Office predicts it will rise again to $52.1 billion. The cost is greater than the $30.6 billion national defence budget, which was recently slashed by $79 million. Budget Office analysts predicted debt interest charges will eat more than 10 cents of every dollar in revenue this year, “well above its pre-pandemic record low of 7 cents in 2019.” On April 18, Budget Officer Yves Giroux was asked while testifying at the Senate National Finance Committee if the Trudeau Liberals’ spending was out of control. “The government projects $500 billion in annual spending over the next two or three years,” testified Giroux. “We are going over a psychological hurdle, a very large one.”“Has the government lost control of its expenditures?” asked Senator Clément Gignac.“This is a good point,” replied Giroux. “Has the government lost control of its spending? I don’t know if they have lost control, but I can certainly say expenditures are rising at a sustained rate.” “If you plot this on a graph and look at the trend, over the next three years we see the trend line going in one direction.”“Was there enough wiggle room for unforeseen events?” asked Senator Tony Loffreda. “With the level of spending the government is incurring, every time the government spends a bit more it gives itself less and less flexibility to face unforeseen events such as a potential financial crisis,” replied Giroux.In 2020, Freeland told the Commons there must be limits to continued deficit spending, but she did not give details about how, as finance minister, she planned to do so. “Yes there are limits,” said Freeland. “Limits exist.""There is no blank cheque” she added. When asked to explain what limits she would impose on government deficit spending, Freeland declined. “I need to be very careful with my words,” she said.Parliament has not balanced its budget since 2007. Freeland’s next budget is due April 16.