OTTAWA — As Canada’s budget watchdog warns the federal debt could hit $1 trillion within the fiscal year, Prime Minister Justin Trudeau says there’s still no plan to share a budget or a fiscal update with Canadians anytime soon.
Trudeau attributed this decision to the hazards of trying to gather clear information about a fiscal future in these uncertain times.
“A budget is usually something that projects what’s going to happen in the Canadian economy for the next 12 months, and right now we’re having a lot of difficulty establishing with any certainty what’s going to happen in the next 12 weeks,” Trudeau said, speaking from the front steps of Rideau Cottage on Wednesday.
He pledged to do his best to be “open and transparent with Canadians, as much as possible,” noting that his government has been “transparent every step of the way” with the announcements it has made to date.
However, Parliamentary Budget Officer Yves Giroux said there is still a lot of information missing at the moment, causing a clouded fiscal picture.
Speaking to the House finance committee on Tuesday, Giroux explained that he’d like the government to provide a fiscal update in order to allow people like him to have a better grasp on the economic impact of current measures.
“The government probably has in mind a sense of how much it wants to spend on potential stimulus measures, but we don’t have that information,” Giroux said.
Trudeau would not commit to sharing that information soon during his press conference on Wednesday.
“We will continue to look for ways to keep people apprised on what we expect for the coming months but as we say, things are changing extremely quickly and we want to make sure we’re putting our efforts where they’re most useful, which is both sharing with Canadians everything we’re doing as we’re doing it and staying focused on what we need to do right now,” Trudeau said.
Trudeau’s comments come as the PBO has warned that his current economic forecasts are “very optimistic” and that the federal debt could climb to $1 trillion before the fiscal year is through.
Giroux made the comment during Tuesday’s finance committee meeting, when Conservative MP Pierre Poilievre asked whether it was “possible or realistic” that the federal debt could reach $1 trillion dollars during this fiscal year.
“Possible, yes. Realistic? Yes. Certainly not unthinkable,” replied Giroux.
Giroux had also predicted two weeks ago that the federal deficit for the year could reach over $252 billion as a result of the emergency economic programs the government has put in place to help Canadians cope with job and income losses amid the outbreak, if existing business shutdowns are slowly eased from the summer through December and oil prices remain low.
On Tuesday, he said this figure was “optimistic.”
“The figure of $252 billion is very likely to be the very optimistic scenario, as opposed to the number for the deficit for the current fiscal year,” Giroux explained.
He said the measures the government has been announcing are intended to be temporary, and that once programs such as the Canada Emergency Response Benefit and the wage subsidy expire and the economy recovers, Canada’s debt-to-GDP ratio should “stabilize.”
“However, if some of the measures are extended or are made permanent, the federal debt ratio could keep rising,” Giroux warned.
