The Liberal government is now forecasting larger-than-expected deficits for the next two years even before adding billions in promised spending in its first budget, which will be tabled on March 22.
Finance Minister Bill Morneau presented the updated numbers at a pre-budget town hall in Ottawa on Monday, then took questions from the audience and reporters.
But that deficit will balloon to $18.4 billion in 2016-17 and $15.5 billion in 2017-18 — and that is before any new spending Morneau outlines in the March budget. Those numbers are drastically different from the $3.9-billion and $2.4-billion shortfalls forecast just three months ago.
“A less ambitious government might see these conditions as a reason to hide, to make cuts or to be overly cautious. But our government might see that the economic downturn makes our plan to grow the economy even more relevant than it was a few short months ago,” Morneau said.
“We’re not considering any tax changes at this time,” the finance minister said when asked whether the government would consider raising general consumption taxes.
The revised two-year economic and fiscal outlook takes into account sharp declines in crude oil prices since the fall update and continued uncertainty in the global economy.